2009 was a difficult year for many companies. The downturn resulted in redundancies for some, and a stagnation in growth for many others. Many workers did not receive a pay rise at all, and for those who did it tended to be lower than in previous years.
The average salary increase in Australia for 08/09 was 1.71%, and more than a third of companies did not offer an increase at all. Services and manufacturing industries were hit hardest, and mining wage increases almost halved from the previous year - although were still significantly higher than those in most other industry areas. This was a big drop from previous averages of 4% or higher.
Now that we are in the final quarter of the 09/10 financial year, what can workers expect at their end of year salary appraisals?
According to the Melbourne Institute Wage Report, Generation Y workers are expecting their salaries to jump by almost 10% this year while their older colleagues are anticipating an increase of 2.9% on average. Workers aged 50 years + are less optimistic, expecting a 1% pay rise, while 8% of workers are actually expecting a drop in pay. More than a third of Australians expect their pay to remain the same.
Demand for workers has increased, and employers are demonstrating more confidence in the economy for the year ahead, but from the figures above it looks likely that some Gen Y workers may be in for disappointment come appraisal time.
Mercer's Market Issues Survey indicates that wage increases of around 4% are expected for 2010 and 2011, and engineering, construction, and finance companies are predicting the highest increases.
As it was before the downturn, the highest performers and the most in-demand staff can anticipate the biggest efforts being made to retain them. It is unlikely that most companies will 'make up' for the pay rise that didn't happen last year, but the general trend is one of a cautious optimism going in to the new financial year.
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