Professionals across architecture, engineering and construction are set to reap greater salary rises as a shortage of skilled workers continues to place upward pressure on remuneration.

In the latest edition of its Hays Salary Guide, professional recruitment firm Hays surveyed 4,425 employers and 4,851 professional staff from Australia and New Zealand to determine their views of salary policy, hiring intentions, recruitment trends, salary expectations, career plans and current priorities.

The report also provides detailed salary expectations for different occupations and specialisations across various locations.

Overall, the report found that salaries are set to rise as candidates leverage tight market conditions to achieve better outcomes.

Of those firms surveyed who operate in architecture, engineering and construction in Australia, 93 percent, 88 percent and 87 percent expect to award salary increases this year.

This compares with 53 percent, 62 percent and 66 percent in last year’s survey.

The magnitude of increases on offer will be substantial.

All up, 50 percent, 33 percent and 39 percent of architecture, engineering and construction employers intend to offer increases of three percent or greater.

Further, employers may be under pressure to deliver higher increases compared with what they intend to offer.

All up, 64 percent/60 percent/62 percent of architecture/engineering/construction employers acknowledge that they were forced to offer pay rises which were higher compared with what they had planned during 2021/22.

Moreover, a discrepancy persists between worker expectations and what employers intend to offer.

All up, 77 percent, 87 percent and 83 percent of architecture, engineering and construction staff say increases of three percent or greater would reflect their performance and contribution.

This exceeds the proportion of employers who intend to grant increases of this magnitude as outlined above.

In other survey findings:

• Staff are more confident in asking for pay increases. All up, 79 percent, 62 percent and 60 percent of workers across architecture, engineering and construction say they are more confident in asking for a pay rise this year.
• Employers are set to hire more permanent staff. All up, 85 percent/61 percent/67 percent of architecture/engineering/construction employers intend to increase permanent headcount this year.
• Employers are struggling with worker shortages. All up 77 percent, 82 percent and 93 percent of employers across architecture, engineering and construction expect that their operations or growth will be impacted by skills shortages in 2022/23.
• Staff retention will be challenging. Among those professionals surveyed, less than half (33 percent/37 percent/35 percent) of architecture/engineering/construction professionals expect to remain with their current employer beyond 2022/23. Meanwhile, 79 percent/71 percent/53 percent believe they could achieve better financial outcomes from changing jobs.

The latest survey comes as design and construction professionals are in demand to deliver upon record a record pipeline of detached house construction and major public sector infrastructure work.

This has seen job vacancies for several categories of AEC professionals return to levels not seen since the peak of the mining boom.

Going forward, demand for workers is likely to strengthen further.

In its Construction Market Report released last month, Australian Construction Industry Forum says it expects the construction sector to add a further 35,000 positions to its headcount during calendar 2022.

This will take the sector’s workforce from 1.152 million people employed as at the end of calendar 2021 to almost 1.2 million people by the end of this year.

This is happening as the overall value of construction work done (building and civil) is expected to grow by 2.8 percent from a forecast $249.5 billion in 2021/22 to $256.6 billion in 2022/23.

As a result, the worker shortage is expected to intensify.

In the public infrastructure sector, for example, Infrastructure Australia projects that a shortage of workers who are required to deliver public infrastructure work will peak in February next year at a whopping 92,500 staff.

By that time, Infrastructure Australia expects that 34 out of 50 infrastructure related occupations will be in shortfall.

In the home building and home renovation sector, meanwhile, Housing Industry Association says that workforce pressures are unlikely to abate for at least twelve months as the industry works through a massive pipeline of detached home approvals.

In its report, Hays identified the roles which are proving most difficult to fill.

Across architecture, engineering and construction, these include:

• Project architects, senior design architects, documenters, senior internal designers, town/urban planners
• Structural engineers (intermediate and senior), civil engineers (intermediate and senior), mechanical engineers (intermediate and senior), drafters and licensed cadastral surveyors
• Contract administrators, estimators, project managers, site managers and project engineers.

The report also identified benefits which are important to candidates and employees.

These include training (internal or external), annual leave in excess of 20 days, onsite parking/company car/car allowance (in construction specifically) and ongoing learning and development.

Speaking particularly of construction, Simon Bristow, Senior Regional Director of Hays Construction, said the recent stability around salaries will give way to gradual remuneration increases.

To manage this, he encourages employers to adopt a ‘new equation’ in the world of work.

With budgets for salary increases extending only so far, this includes consideration of non-salary enticement and retention strategies. These could include benefits, upskilling, career progression, purpose and the relationship which employers have with their staff.

“Moving away from the salary stability stance of recent years, employers say the skills shortage is the reason increases are higher than planned. Already 96 per cent are experiencing a skills shortage. 93 per cent say it will impact the effective operation or growth plans of their organisation,” Bristow said.

“This is fuelling a once-in-a-career market. Previously camouflaged by skilled migration, and further impacted by headcount growth, skills shortages have reached a level unmatched in our years in recruitment and sparked deliberate salary increases from employers.

“However, while both the value and extent of salary increases is rising, employees’ expectations are growing faster. In a job-rich, candidate-poor market, they feel more assured of their worth and have prioritised a pay rise.”