Study finds big differences in salaries, employee movements

Bucking the trend of recent years, employees working in Australia’s small companies are increasingly choosing to stay with their employers, while large companies are still forecasting wage increases – with the biggest winners likely to be senior executives and the biggest losers salaried staff.
 
The Australian Institute of Management’s (AIM) National Salary Survey 2009 includes separate analysis for large ($10m plus) and small (less than $10m annual turnover) companies, and the results are striking.
 
Bucking the trend of recent years, employees working in Australia’s small companies are increasingly choosing to stay with their employers, with voluntary staff turnover rates plummeting to 9 per cent per annum, from 12.7 per cent in the previous year and this trend is set to continue, according to the nation’s leading survey of salaries and human resources trends.
 
In fact, the survey found that there will be less opportunity for staff to move between small companies in the foreseeable future, with only around one-third (34.2 per cent) of small companies expecting to increase permanent staff numbers over the next 12 months, down significantly from 67.3 per cent in the previous year,.
 
Now in its 45th year, the AIM National Salary was based on the responses of 759 companies, comprising large companies (548 contributors) and small companies (211 contributors).
 
The survey revealed signs of further negative fallout from the global economic downturn, with annual salaries rising by 4.6 per cent in the 2008/2009 year (down from 5.2 per cent in the previous year). This downward trend is set to continue into the foreseeable future, with small companies forecasting wage movements for 2009/2010 at only 4.1 per cent. 
 
The combined effects of lower wage increases and higher involuntary turnover rates, amounts to significant challenges for organisations to contain employment costs while remaining competitive and keeping employees engaged, all within the context of an increasingly uncertain and challenging economic environment.
 
While voluntary staff turnover rates are down on last year, they still pose a threat to small companies due to the significant costs associated with recruitment and re-training. 
 
The survey found that the top reasons for staff resignations from small companies were to pursue a new challenge (in 64.7 per cent of small companies) and to obtain better pay (in 51.8 per cent of small companies).
 
The survey indicates that in 2008/2009, only 40.0 per cent per cent of small companies have a dedicated training budget (as compared to 57.3 per cent of large companies) while around one-fifth (21.7 per cent) of small companies have formal succession plans in place (as compared to 31.7 per cent of large companies). 
 
Large companies still planning salary increases
 
Despite the current economic gloom, large companies are still forecasting wage increases of 3.5 per cent for 2009/2010 – albeit less than the 4.3 per cent actual increase reported in 2008/2009 – with the biggest winners likely to be senior executives and the biggest losers salaried staff, according to the nation’s leading survey of salaries and human resources. 
 
According to the survey 2009, large companies in the (until recently) resource boom states of Western Australia and Queensland have been hardest hit, with the rate of actual salary increases and forecast salary increases falling significantly from the previous year’s pay movements and forecasts.
 
Involuntary staff turnover rates were found to be up slightly from 3.8 per cent in 2008 to 4.8 per cent in the 2009 Survey. A more worrying trend is that only 39.6 per cent of large companies in Australia expect permanent staff numbers to increase over the next 12 months (down from 59.7 per cent in the 2008 Survey), while nearly a quarter (23.5 per cent) of organisations are expecting a decrease in permanent staff levels (up significantly from 8.4 per cent in the 2008 Survey).
 
The combined effects of lower wage increases and higher involuntary turnover rates, amounts to significant challenges for organisations to contain employment costs while remaining competitive and keeping employees engaged, all within the context of an increasingly uncertain and challenging economic environment.
 
According to the AIM Survey, there are some mixed signs with regard to expected training spend over the next 12 months, with a notably lower proportion (33.7 per cent) of organisations expecting to increase training budgets (as compared to 45.7 per cent in the 2008), while the majority (52.5 per cent) of organisations expect their training budgets will remain the same (up slightly from 48.4 per cent in the 2008 AIM Survey).
 
 

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