Salaries up 4.1 per cent in past year and stabilising

Salaries increased 4.1 per cent over the past 12 months, but growth is slowing, according to Mercer's latest study on remuneration trends.

Mercer remuneration specialist, Ken Gilbert, said the latest report showed employers had shifted their focus from attracting new staff with higher salaries and were now looking to retain current staff with financial incentives.

"Now [new and existing staff] are on an even keel at 4.1 per cent, suggesting that companies are being more considered in dealing with the unique problems that come with the lowest unemployment in 30 years, an ageing workforce and growing skills shortages," he said.

The report also showed that staff turnover had decreased from 36 per cent last year, to 28 per cent.

Sectors reporting above average salary increases were mining and resources (up 56 per cent), construction and engineering (4.7 per cent), and energy (4.4 per cent).

Over the past year, employers have also increased the number of staff on "pay-at-risk" salary packages, the report found. This model used to be restricted to the most senior or high-performing staff, but was now being used more broadly.

"It makes sense in the current situation: organisations don't have a bottomless pit of money to meet wage costs, so the solution is to link pay to performance, keep fixed wage costs down, and be prepared to pay more where individuals deliver results," Gilbert said.

Courtesy of shortlist.net.au, CareersMultiList and SMH