Are your employees expecting a pay rise?

Irrespective of the size of your business, it is likely employee salaries and wages take up a fair amount of your operating costs. However, will these increase even more over the coming year?

Recruitment expert Hays has released its 2015 Salary Guide, which analyses trends over the past year and provides a forecast for the near future. Businesses looking to develop over the coming year will need to pay close attention as these results could have an affect on their ability to retain employees. 

How much are they increasing?

These trends are a continuation of last year's developments, where just over half (56 per cent) of businesses surveyed increased employee salaries by up to 3 per cent. This is expected to rise again for the rest of the year, with just under two thirds (65 per cent) expected to raise pay rates by this amount. 

This is due to businesses expecting promising financial conditions across the economy, which means they will need to retain their most effective staff to stay ahead. 

"As a group these employers have a positive outlook, with 36 per cent expecting to increase permanent headcount and 68 per cent expecting business activity to rise," said Managing Director of Hays in Australia & New Zealand Nick Deligiannis.

"Salaries will remain stable during this transition period, although long-term we will start to see a broader pickup in salaries."

For businesses already struggling with cash flow, these pressures could provide a challenge. Hays found there are other options for businesses looking to increase remuneration that may struggle with the extra expenditure. 

One option is to allow for flexible working arrangements, which 84 per cent of respondents to Hays' survey offer. Salary packaging with other benefits can also help ease the financial pain of remuneration, and can include benefits such as a company car or superannuation contributions that are above the mandatory requirements.