Wage growth has surged to a 12-month high, according to new data from Employment Hero. The company’s inaugural SmartMatch Employment Report reveals a stark contrast to official figures, with year-on-year wages increasing by 8.8% compared to the ABS’ reported 4.1%.
Employment Hero’s inaugural SmartMatch Employment Report has revealed a significant year-on-year wage growth of 8.8%, marking a 12-month high and fueling concerns over ‘wageflation’. This figure more than doubles the 4.1% wage growth reported by the ABS in May.
The SmartMatch Employment Report, based on real-time data from 300,000 businesses and over 2 million employees globally, offers a comprehensive breakdown by state, industry, age, and employment type. The data shows that NSW leads with a 9.9% wage growth, while SA recorded the lowest at 6.7%.
At the industry level, Construction and Trade Services saw the highest wage growth at 18.0%, followed by Consulting and Strategy at 14.0%, and Real Estate and Property at 13.2%. Full-time workers experienced the highest year-on-year wage growth at 9.6%, while part-time and casual workers saw increases of 6.0% and 5.9%, respectively.
Age-wise, those aged 45-55 command the highest hourly wage at $50.60 and saw a 12.0% increase year-on-year. Meanwhile, those aged 14-17 experienced the weakest growth at 5.0%.
Calls for better employment market transparency
Employment Hero’s CEO and Chief Economist, Ben Thompson, commented on the findings, highlighting the need for real-time transparency in the employment market. “There is a current lack of real-time transparency in the employment marketplace and what someone is worth today is not necessarily what they were worth yesterday.
As it stands, the data that employers and job seekers have access to is either out of date, unverified or not revealing the complete employment picture. This is especially true with wage data. Because of this the market is negotiating blindly.
“For example, the ongoing ‘wageflation’ that our 8.8% wage increase reveals is an important metric that must be considered by decision makers, especially when viewed in the context of the RBA’s ongoing battle against inflation. The impacts of potentially unsustainable wage growth must also be weighed against ASIC’s findings that business failure rates are nearing recession levels. In terms of this month’s wage jump, we suspect it could reflect the increase in minimum wages and awards that came into effect on July 1st.
“We believe that our live payroll informed data increases transparency and can support businesses and employees to make better decisions around employment, this may include conversations around salary or offer forms of remuneration. He emphasized that the data could help employers and job seekers make more informed decisions and urged the use of the SmartMatch tool for accessing these insights.
The report also contrasts its findings with the ABS Wage Price Index, noting differences in methodology and frequency. Employment Hero’s data includes the full compensation package and is updated monthly, providing a more dynamic view of the employment landscape in Australia. The median hourly wage data included in the monthly SmartMatch Employment Report differs from what is reported on by the ABS in a number of ways. For example, the ABS’ Wage Price Index, which is issued quarterly, is based on a sample of 18,000 jobs drawn from 3,000 private and public sector businesses. Survey invitations are sent to businesses of all sizes, with every business given an equal opportunity to participate.
In comparison, the SmartMatch wage data is drawn directly from the 300,000 business and 2+ million employees on the Employment Hero platform globally and is informed by real-time payroll data. In addition, the SmartMatch Employment Report is issued monthly to give the industry an on-going and up to date snapshot of employment in Australia.
Additionally, while the ABS focuses on base pay, Employment Hero’s wage data analyses the full compensation package which includes base pay, bonuses, commissions and other forms or remuneration. This provides an alternate picture of earnings and gives employers and job seekers a valuable resource for making employment decisions. In addition, Employment Hero’s data also supports policy-makers with real-time access to what is happening in the SME sector.
State Breakdown:
- NSW: 9.9% year-on-year growth
- VIC: 8.3% year-on-year growth
- QLD: 9.4% year-on-year growth
- SA: 6.7% year-on-year growth
Industry Breakdown:
- Construction and Trade Services: 18.0%
- Consulting and Strategy: 14.0%
- Real Estate and Property: 13.2%
Age Breakdown:
- 45-55: $50.60 hourly wage, 12.0% growth
- 14-17: 5.0% growth
More on the report here
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