Skills shortage sees salaries spike for construction workers

Jarrod Brown
By Jarrod Brown
5 Min Read

Australia’s current affordability crisis is forcing construction business owners to boost employee pay packets or risk them walking out the door. 

A salary guide, created by recruitment agency Hays, has revealed that 81 per cent of construction employers are looking to increase wages in their next review.

According to the survey, 86 per cent say the country’s worsening skills shortage has forced them to offer higher salaries than planned, with 43 per cent looking at boosting annual wages by 3 per cent or more. 

“We saw a rise in construction employers being forced to offer higher salaries in the past year due to the skills shortage with 36 per cent offering substantially higher salaries and 50 per cent offering nominally higher salaries,” said Hays CEO, APAC, Matthew Dickason.

“The survey also found 79 per cent of organisations expected skills shortages to impact the effective operation of their business in the next 12 months.”

87 per cent of organisations said they were experiencing skills shortages with 32 per experiencing extreme skills shortages and 51 per cent experiencing either moderate or minor shortages. 

Despite this, Dickason said construction businesses were still positive about the year ahead, with 66 per cent of employers expecting business activity to increase and 59 per cent of organisations reporting an increase in overall productivity over the past 12 months.

“Businesses should take advantage of this eagerness to upskill to embed learning behaviours and avoid losing key talent.” 

Pay boosts or bust

But with 87 per cent of employers expecting the pay rise to be above 3 per cent, many might still be reaching for the door in search of higher paying positions in order to combat the country’s rapidly rising cost of living. 

With or without the salary review, 78 per cent of construction professionals say they are either looking or planning to look for a new job in the next 12 months. 

“There’s a trend of employees expecting higher salary increases over the past three reports with 57 per cent indicating they believed they would benefit financially from changing jobs in the next 12 months,” said Dickason.

“In 2019, 67 per cent of employees expected a pay rise of less than three per cent. In just five years the pendulum has swung to 88 per cent of employees expecting a pay increase of more than 3 per cent.”

“The mismatch between what employees want and what employers are willing to offer will play out over the next year, with 38 per cent of employees being dissatisfied with their salaries and 71 per cent saying it doesn’t reflect their individual performance.”

While employees might hold all the cards when it comes to negotiations, Dickason encouraged employees to find a good balance when choosing a job. 

“With skills in demand you still have bargaining power, but it’s important to avoid pricing yourself out of consideration. Yes, employers are investing in salary increases, but the commercial reality dictates that salary increases can only stretch so far,” Mr Dickason said.   

“Consider the whole package when you negotiate a new job or your next pay rise. Think about what you’d really value and what could make a difference to your life and career long-term.” 

For smaller businesses that can only stretch salary increases so far, Dickason says it’s important for owners to focus on bonuses on offer to employees. 

“Employers must also recognise that additional benefits are not just a bonus – they are a must. Benefits employers are offering this year to retain valuable employees include flexibility (42 per cent), professional development (40 per cent) and performance bonuses (40 per cent),” he said. 

“Your employer’s brand and reputation is the one of the strongest motivators for staff to stay. Positive changes to a company’s ESG approach, DE&I strategies, flexible hybrid setups and a strong team culture are some of the ways that employers can hold on to valued staff.”

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Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.