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Employees at SMEs get biggest pay increases in 2010

Employees are better off working for small companies in Australia, who passed on an average salary increase of 4.3 percent – significantly higher than the 3.7 percent average increases recorded for large companies.

Salary increase in 2010While this increase is lower than the 4.6 per cent reported last year, it is still significantly higher than the 3.7 percent average increases recorded for large companies for the same period.

But it’s not all good news. According to the Australian Institute of Management’s (AIM) National Salary Survey 2010, a much larger proportion of small companies reported a decrease in permanent staff levels in the past 12 months – up almost 10 percent to 31.5 percent (up from 21.6 percent of small companies in the previous year’s survey). In addition, like their big end of town counterparts, only around three quarters (76 percent) of small companies actually passed on increases – significantly lower than the 94 percent of small companies that passed on pay increases in the previous 12 month period.

“While more small companies kept a lid on staff numbers and fewer small companies passed on pay increases in order to survive the worst of the economic downturn, as the economy improves the big challenge will be retaining staff without incurring big employment cost blowouts,” AIM’s chief executive NSW/ACT, Mr David Wakeley warns.

Despite rising unemployment over the past 12 months, over one third (39.6 percent) of small companies still reported difficulty recruiting some staff due to skill shortages. These difficulties were most commonly found recruiting at the Professional/Technical job level for Manufacturing/Supply/Distribution, Sales & Marketing, Finance/Accounting and Administration/Customer Service job functions.

“With the skills shortage tipped to worsen, employers need to move sooner rather than later to lock in their best and brightest in those sectors most susceptible to skills shortages,” Mr Wakeley says.

Although pay will always remain an important factor, key to success in these sectors and indeed in all sectors will be the development and active implementation of training, career development and succession plans at all levels across the organisation for both retention and recruitment purposes and to ensure the organisation reaps the benefits from a training investment,” he adds.

AIM’s National Salary Survey is now in its 46th year and is based on the responses of 750 companies, comprising large companies (546 contributors) and small companies (204 contributors) throughout Australia.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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