MELBOURNE, 4 OCTOBER 2022 — Talent shortages and hiring pressures are leading many companies to over-promote or over-compensate new hires, according to a survey released by RMIT Online today.
Key points from the report:
RMIT Online research shows 46% of managers feel they have had to overpay new hires
40% feel their new colleagues don’t have the skills or experience to be in their new roles
Inflation worries 85% of workers; 61% changed jobs for an increase of $10,000 or less
The report, The Salary Trap, identifies that almost half of Australian managers (46%) believe their companies had to overpay for new hires in the past year due to market competition and high expectations from candidates. A similar number (40%) also say those hired don’t have the skills or experience necessary for the new roles.
The data also shows 35% of managers and a quarter of non-managers say the new hires have the highest salaries for their positions, which can cause internal friction.
"This is not necessarily a problem and can positively contribute to finding and promoting great talent. However, businesses must complement this with support and training to ensure new employees have what is needed to succeed." The CEO adds that leaders have to understand the issue better not only to support new hires but also to avoid creating attrition within the current employees.
(continued) "whether this be through remuneration, or providing on-the-job or formal training opportunities to help staff realise their potential.” The survey also identifies that a third of managers (34%) who moved to a new company in the past year are concerned they don't have the right skills. They are so worried that 37% are actively looking for another position just months into the new job. There are several reasons managers and employees are moving to new roles, even when feeling unprepared.
The data indicates most unsatisfied workers (57%) don't feel valued by their employers, and half of those (51%) believe they aren’t receiving adequate compensation for their current role or level of responsibility. Rising inflation is also contributing to increasing career moves. Over 85% of those surveyed say a higher cost of living makes financial compensation more critical now than a year ago, increasing the likelihood of moving for a better paycheck.
The research reveals over a third of workers changed jobs in the past year for better pay. Of those, 61% did so for less than $10,000 a year, and 28% for less than $5,000. The RMIT Online survey shows employees recognise they need training in areas such as data analytics, digital literacy and leadership.
To learn more, or download the report in full visit online.rmit.edu.au/insights/2020