Construction Wages Stuck Despite Jobs Boom 1

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Thursday, June 9th, 2016
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Despite the biggest jobs boom ever seen, workers in the construction sector throughout Australia are barely bringing home any pay rises at all, the latest report says.

Unveiling the results of its 2016 Salary Guide, recruitment outfit Hays said that seven in 10 employers throughout the property and construction sector planned to offer either no increase in salaries or an increase of less than three per cent at the next pay review – with only five per cent of all employers expected to offer increases of six per cent or more.

This follows on from last year, where 62 per cent paid either no increase or an increase of less than three per cent during their most recent review.

Those numbers indicate that salaries and wages throughout the building sector are actually rising slightly faster compared with those across other parts of the economy.

Across all sectors, 78 per cent of employers expect to offer either no increase or increases of less than three per cent this year and 74 per cent paid out less than three per cent last year.

Nevertheless, the numbers appear to be surprisingly subdued in an environment where red-hot conditions in multi-residential building have pushed construction sector employment levels to record levels.

In the three months to February, the Australian Bureau of Statistics indicated that the number of workers employed throughout the construction sector stood at 1.065 million – up by more than 35,600 compared with the same period 12 months earlier.

Hays senior regional director Adam Shapley said whilst staff turnover was on the rise, wages were being held back by a combination of worker loyalty toward an employer and/or commitment to current projects as well as a reluctance on the part of employers to acknowledge the gravity of current labour market conditions.

“We’ve seen an increase when people are moving jobs,” he said. “Apart from that, a lot of employers are very busy and their staff are keeping their heads down and remaining loyal to their current employer or are tied into a project, so this is impacting the situation.

“In addition, many firms are not willing to acknowledge that the current market has long-term implications for salaries yet.”

Despite the relative restraint on the remuneration front, the latest survey suggested that current market conditions and hiring intentions remained strong.

According to the survey:

  • Almost two-thirds of employers (64 per cent) experienced increased business activity over the past 12 months, with 70 per cent expecting further increased activity in the year ahead
  • Staff levels are up too, with 39 per cent increasing permanent headcount during the last 12 months. This outstrips the 21 per cent who decreased it
  • Meanwhile, 40 per cent intend to increase their permanent headcount in the year ahead, far exceeding the 13 per cent who expect to decrease it
  • The use of temporary or contract staff will also increase for 21 per cent of employers, exceeding the 12 per cent who expect their use of such resources to fall
  • In light of salary expectations, it’s surprising that 32 per cent of employers say salary and benefits have a major impact on their employer brand, up from 25 per cent last year;
  • 60 per cent say skill shortages will impact the effective operation of their business or department.

Should remuneration levels remain overly subdued, Shapley says employee turnover throughout the sector will increase.

He says employers need to be aware of the growing demand, especially for highly skilled workers, or else risk losing existing staff to other employers who may produce better offers.

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  1. Barry b.

    Construction costs are ridiculously high already thanks to the unions, and a major drag on the efficiency and economy of projects.