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Some positive salary news for property people

Avdiev Remuneration Report 2019

The latest Avdiev Remuneration Report 2019 October update, finds that young smart workers in Building, Design and Construction, Finance, Corporate and IT have been offered the biggest remuneration rises to September 2019.

Business conditions vary from state to state, and are market sector and government stimulus related – infrastructure projects are attracting top talent with top pay.

“The Australian property industry is remaining stable and positive, but in an environment of mixed signals Avdiev Report subscribers are watching and waiting” said Rita Avdiev, Managing Director of The Avdiev Group, remuneration consultants.

“With the May 2019 Federal elections out of the way there is political stability but uncertainty about the global economy and its impact on Australia’s future. The mood is mixed”. A big four bank survey reports improvement in business conditions and employment intentions.

Property industry remuneration is reflecting the fluctuating business conditions in the sectors. The median increases across all sectors continue at 2.5% for senior and mid-level staff and 3% for the juniors. However pay rise ranges have increased, with salary rises in several strong market sectors ranging from 2.5% to 15% and 1.9% to 2.9% in sectors where activity has been more subdued. But top performers in those sectors continue to be well paid. Employers know to ”keep the best people for the worst times” in case of a downturn in business. 75% of companies plan to pay the usual increase or a catch up component, 25% intend minimal or no increases.

These pay rises are in most cases still above the general workforce increases with the Wage Price Index and Consumer Price Index both increasing for the year to June 2019 at 2.3% and 1.6% respectively.

Remuneration structures are being reviewed and refined to reflect strategies put in place early in 2019. A better pay and incentive mix, changing performance targets, aligning pay for performance to market practices and developing new non remuneration policies – flexible hours, wellbeing and mental health programs, culture and training.

The Avdiev Remuneration Report 2019 October Update, is the product of a formal Australia wide survey of property, investment, development and construction employers and design and building consulting companies. Its findings include:

  • The Australian economy, subject to constantly changing global events is turning, market conditions changing
  • The RBA’s latest rate cut spooked consumers, property markets watching and waiting, retail adjusting, resi rising
  • 63% of respondents to the Avdiev Report October Update Survey advise business conditions to be stable
  • Design & Building Consultants, a leading indicator for the markets report a downturn in business conditions
  • A highly competitive market due to severe cost cutting by rivals, scope creep and late payments by clients
  • Building defects cladding crisis affecting consultants first, flow on to other sectors expected to develop later
  • Business sources, economic/market conditions, funding, regulation and staff quality are concerns for all sectors
  • Pay rises remain subdued, but still ahead of the general workforce, the young are still ahead, average increases were 2.5% for senior and mid level staff. 3.0% for the juniors
  • Building and Construction and IT sectors fare best, young, smart workers winning in the war for talent
  • “Rock star pay” for some Funds CEOs consists mainly of long term incentive pay and “stellar” business results
  • Remuneration structures are being reviewed to suit strategic decisions made before the Federal election
  • Pay and incentive mix, pay for performance alignment, shareholder pushback and media attention in focus
  • 46% of respondents developing new non-remuneration policies to motivate and retain their teams
  • Staff turnover for past 12 months reported to be 7% -10%, seniors 6.9%, mid level staff and juniors 9.9%

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