Despite the construction boom, large pay increases for built environment professionals throughout Australia remain hard to come by.
Releasing its salary guide for 2019/20 based on a survey of more than 3,400 organisations, recruitment firm Hays says 88 percent of organisations across the architecture, engineering, construction and property sectors intend to increase salaries during their next pay review – up from 84 percent who did so in their review last year.
However, the size of those increases is falling.
More than half (54 percent) of those surveyed intended to increase salaries by less than three percent – up from 45 percent last year.
At the other end of the scale, just 7 percent of employers expect to grant pay rises of six percent or more – down from 15 percent last year.
Workers themselves are also gloomy.
Amongst built environment professionals with whom Hays spoke across the four aforementioned subsectors, more than half (51 percent) expected either no pay increase at all or pay rises of less than three percent at their next review.
Only one in five expected increases of six percent or more.
Across the sector, subdued pay rises at a time of record construction activity are creating tensions between employers and professional employees.
More than half (57 percent) of all built environment professional indicate that a salary increase is their number one career priority this year.
Whilst 46 percent intend to achieve this through asking their existing employers, others are looking elsewhere.
All up, 41 percent of current job seekers in the field say their search was prompted by an uncompetitive salary.
Simon Bristow, Senior Regional Director of Hays Construction, describes a ‘tug of war’ over construction sector salaries.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings,” Bristow said.
“On the other, employers tell us they want to add to their headcount and are being impacted by skill shortages, yet they plan to curtail salary increases.”
“Evidently, the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries.”
According to Bristow, salary trends vary by location.
While salary pressure has stabilised in NSW, in Canberra continuing staffing shortages will ensure gentle upwards pressure on salaries in 2019-20.
In Victoria, demand is rising for experienced contract administrators, project managers, design managers, engineers and site managers in civil infrastructure and the commercial market. Salaries continue to increase as a result.
In Tasmania, ongoing skill shortages will keep upward pressure on salaries, particularly in infrastructure.
South East Queensland’s solid project pipeline will fuel high demand for commercial estimators, contract administrators and infrastructure professionals. However, Hays expects salaries to remain relatively stable after a period of growth.
Perth’s active commercial sector will create demand for project managers and construction managers. Despite this, salaries will remain stable.
Commercial construction has improved in South Australia and the civil construction market will be strong. Salaries however will remain stable.
Salaries will also remain consistent in Darwin.
Beyond capital cities, Bristow says salary growth is occurring in regional locations.
This, he says is likely to continue as organisations attempt to attract skills in short supply from major cities.
In other findings, across all sectors, according to the report:
- 67 percent of organisations offer flexible salary packaging. Of these, the most common benefit is salary sacrifice, offered by 55 percent of employers to all employees. This is followed by above mandatory superannuation (offered by 37 percent of employers to all their employees), parking (33 percent), bonuses (27 percent) and private health insurance (26 percent);
- Of the benefits offered to a select few employees, private expenses tops the list, with 70 percent of employers offering it to a hand-picked number of employees;
- 68 percent of employers said business activity had increased over the past year, with 70 percent expecting it to increase in the next 12 months;
- 47 percent intend to increase permanent staff levels over the coming year;
- 70 percent say skill shortages will impact the effective operation of their business or department in either a significant (28 percent) or minor (42 percent) way, up from 67 percent last year;
- 54 percent of employers are restructuring to keep up with changing business needs – the key driver of these restructures is a change in the required skill sets;
- In skill short areas, 57 percent of employers would consider employing or sponsoring a qualified overseas candidate.