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Hays Procurement Salary Guide: Salary increases unlikely to excite this year

Issued at 2016-06-06



Business activity and permanent headcounts may be rising, but according to the 2016 Hays Salary Guidethey are not translating into salary increases. With employers for the most part unwilling to loosen the purse strings, the recruiter warns that employees will start to take matters into their own hands.

Key findings: 

  • Two-thirds (66%) of employers will increase salaries by less than 3% when they next review;
  • A further 12% expect to offer no increases;
  • During the last year, 58% increased salaries by less than 3% while 20% gave increases between 3 and 6%.

According to the Guide, released today, just 22% of Australia’s procurement professionals can expect a salary increase of three per cent or more in their next review. Instead the vast majority of workers (66%) will receive an increase of less than three per cent. The final 12% will receive no increase.

Professional services followed by financial services and construction, property & engineering employers will be at the front of the small group offering the biggest increases.

The Hays Salary Guide includes salary and recruiting trends for over 1,000 roles in 14 locations in Australia and New Zealand. It is based on a survey of 2,752 organisations, representing over 2.6 million (2,686,179) employees.

“The outlook for procurement professionals is positive, but it’s clear that employers remain reluctant to offer substantial increases unless absolutely necessary to secure a candidate with skills in short supply,” says Tim James, Director of Hays Procurement. “Despite seven in ten employers expecting business activity to increase in the year ahead, and permanent headcounts also expected to rise, cost consciousness remains in vogue.”

According to Hays, over the last year 16% of employers offered no salary increases. Those who did receive a salary increase found that their wallets were not that much heavier. 58% received an increase of less than 3%, 20% saw their pay increase from 3 to 6%, and a lucky 6% received an increase of 6% or more.

But Hays warns employers not to be complacent, because employees are starting to take matters into their own hands. As Tim explains, “41% of employees say they’ll ask for a pay rise in their next review. Another 25% are as yet undecided about popping the salary question. Meanwhile staff turnover has already increased in 29% of organisations.

Tim says that while a number of private sector organisations around Australia still have little or no procurement function, creating an internal function and implementing processes for tighter control over costs is a growing trend. “Employers ready to create this discipline in-house look for candidates with greenfield experience establishing procurement inside an organisation,” he says. “While salaries are still influenced by budget constraints, these opportunities offer candidates great experience and development.

“Another trend is the number of quality entry-level jobs available, such as Procurement Officer. Roles at this level encourage new talent to commence a procurement career, which supports the growth of the industry. To be successful, candidates need to demonstrate soft skills as well as technical ability. The industry is looking to break the mould of traditional technical procurement by developing a broader skill set in the next generation,” said Tim.

 Other findings:

  • Almost two-thirds of employers (64%) experienced increased business activity over the past 12 months, with 70% expecting further increased activity in the year ahead;
  • Staff levels will rise too in the year ahead, with 37% of employers expecting to increase permanent headcount in their purchasing/procurement department. The far exceeds the 6% who expect to decrease it. This is welcome news since last year 27% of employers increased their permanent purchasing/procurement headcount but 30% decreased it.
  • The use of temporary or contract staff will increase in 23% of purchasing/procurement departments, although 17% expect their use of such resources to fall;
  • In light of salary expectations it’s ironic that 32% of employers say salary and benefits have a major impact on their employer brand, up from 25% last year;
  • 60% say skill shortages will impact the effective operation of their business or department.

Get your copy of the 2016 Hays Salary Guide or download The Hays Salary Guide 2016 iPhone app from iTunes.

Hays, the world’s leading recruiting experts in qualified, professional and skilled people.


Source: Hays



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