Remuneration Trends & Insights Report
Below are select articles from the Mercer June 2024 Remuneration Trends & Insights Report. This is the latest on the current remuneration environment in the Australian market. Read the full report here.
The market [Q1 2024]
Australian organisations have encountered a set of difficulties since the start of 2024, such as slow economic growth, prolonged talent constraints, lagging productivity, skills shortages and cost-of-living pressures. In this context, it is not surprising that Mercer’s remuneration sentiment index revealed that the optimism about remuneration budgets and the jobs market has receded. Currently, the index is -20.8%, down from 12.5% in the previous quarter. Looking ahead six months, 44% of our client panel anticipate worsening conditions in their own organisation’s remuneration budgets, hiring policies, and the jobs market, with four times as many respondents compared to the previous quarter. To navigate through these challenges, it is crucial for organisations to implement effective risk and people management strategies that ensure long-term sustainability.
New hire pay rates
According to Mercer, maintaining a fair and competitive compensation structure is essential to attract top talent from the external market while also ensuring equitable treatment for existing employees. In June, the overall new hire pay rate was -0.4%, indicating that new employees were being hired at slightly lower salaries than existing employees in the same role within the same organisation. The decrease of 0.3 percentage points this month in the difference between new hires and existing employees suggested a slightly greater “discount” for new hires. Among industries, the hospitality & recreation industry has continued to offer the highest premiums, reporting 2.6% more being offered to new hires. Conversely, organisations in the education & research industry were offering the largest “discount” to new hires at 2.3% below existing employees.
Distribution of increases
Across Mercer’s database in June, among those employees who recorded salary freezes or positive annual pay increases in the same role within the same organisation, 43% received annual increases greater than 5%, including 17% recording increases between 5% and 7%, and a further 27% of employees recording increases more than 7%. The prevalence of employees who reported no changes in annual salaries remained low at 1%, while 14% of employees received increases below 2% (excluding salary freezes). Additionally, 30% of employees reported increases between 2% and 4%, and 11% received increases between 4% and 5%.
Percentage of employees recording annual increases more than 5%. 
Note: based on employees who received salary freezes or positive pay increases; the total does not equal 100% due to rounding
Gender pay increase
Mercer’s rolling database provides a monthly view of gender pay differences in the same role within the same organisation, as measured by the gender pay index 8 . In June, the gender pay gap narrowed by 0.2 percentage points to 1.6%, marking a departure for the first time from the stable range of 1.8% to 2.0% observed since August 2022. While a positive figure in the gender pay index indicated that male employees were receiving higher salaries than their female counterparts in the same role, the decline in the latest result may reflect the efforts many organisations took to invest in talent retention and uphold equity commitments.
Industry – The industries with the broadest average gender pay gap included chemical (5.2%) and manufacturing (4.9%).
Career stream – The smallest average gender pay gap was in the paraprofessional stream, reporting 1.5%, and the broadest gap was in the executive stream, reporting 4.2%.
Trends of gender pay index
