Pay up or lose staff

This year's National Salary Survey has been released by the Australian Institute of Management (AIM), and it shows that Australian organisations are losing employees to their competitors due to slower than normal wage growth.

The survey gathers responses from around 557 organisations across the country, covering 25,000 employees in 282 job roles, and the 2015 results indicate that six in 10 employees are leaving an organisation to move sideways into a similar role. More than four out of every 10 employees say the reason for leaving is money. With the exception of the IT and professional services sectors, most industries are experiencing an average salary movement of just +3.4%, which is the lowest since 2003. The forecast is just as gloomy, with employers forecasting a further drop to +3.2% over the next year.

Tony Gleeson, acting CEO of AIM, puts this down to vacillating confidence and a tighter labour market. He suggests that more creative means are required in order to retain staff.

"Lower pay movements across the board should not be the reason why organisations are losing their employees," he said.

"When you consider how expensive losing employees can be, along with the loss of corporate knowledge and disruption to clients and employees, this should be a real focus for organisations in the year ahead."

He recommends implementation of variable reward schemes, which fewer companies are offering according to the survey, despite there being an increase in flexible working arrangements.

"Bonus schemes, profit sharing, performance or project-based pay are types of variable schemes that are low-risk options with a huge upside for employees and productivity overall," said Gleeson.

While money plays a big part, there are certainly other reasons for leaving. The desire for a new challenge, limited career advancement opportunity and conflict with managers and peers are also cited as motivators in the survey results.

The survey also asked participants to identify human resources challenges in terms of those that pose the greatest risk and those that hold the greatest potential benefit. Interestingly, 'retaining talent' was at the bottom of the top five, suggesting that employers haven't even realised that people are moving on to more economically favourable roles.

For a copy of the full report, visit the AIM website.

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