In a job-rich, candidate-poor market, agencies are paying "staggering" salaries to ensure good talent doesn’t get poached by competitors.
One year into Australia’s great talent crisis, recruiters say pay expectations continue to rise but agency budgets are exhausted and salary increases are on track to slow.
Industry insighters told AdNews: “I have heard people joining an agency and then leaving before their probation is over because they have been offered $10,000 to $20,000 more by someone else.
“An announcement was ready to go on an appointment but they left for a higher paid gig.
“It’s led to quite inexperienced people demanding ridiculous salaries – and is mainly because the pandemic has seen so many international workers leave and not come back.”
Ryan Watts, marketing talent agent, Aquent Australia told AdNews: “The rumours are true, the salaries people are being offered at the moment are staggering.
“I work with agencies all across Sydney and Melbourne and I’ve found that they have been struggling to retain and attract good talent purely because they just can’t compete with other companies that can offer candidates $20,000 - $50,000 more.
“What I am also seeing is candidates reject roles at the offer stage because they have received a better offer elsewhere.
“Gone are the days when you make an offer and it’s immediately accepted—employers need to know that candidates have three to four offers on the table and they’re looking for the best deal.
“I’ve worked with agencies that are not willing to pay higher salaries to attract great talent and unfortunately those agencies either a) don’t end up finding anyone at all or b) they do find talent but they are less qualified for the role.
“Bottom line is if you pay peanuts, you get monkeys.”
Hays Salary Guide FY22/23 shows that Australia’s acute skills shortage has made 56% of workers more confident to ask for a pay rise.
An uncompetitive salary is the number one factor motivating job searches this year (nominated by 49%), ahead of a lack of promotional opportunities (40%) and a poor management style or workplace culture (37%).
Simon Hadfield, managing partner at recruitment agency DMCG Global: “Much of the younger generation don’t know how to engage with executive search and recruitment and often quickly show their hand asking immediately ‘which agency and how much’ - that's a no thanks from me.”
Justin Ladmore, managing director, Enigma Media told AdNews: “We’re talking to people who might have one year experience in search marketing wanting $150,000.
“Even though we've been looking for certain search roles for five or six months we have had to say no to lots of people because they're asking for ridiculous amounts and we're not desperate.
“But I know, other agencies are paying 20%-30% more for certain roles and doing different things to try and keep staff - that's just the market and something we need to work around.
“I am confident that things will get better when they open the borders more.
“We've just hired someone from London and we're prepared to do more of that - I never thought I'd say it, but thank God for the poms coming out to Australia.”
Hays also noted that while 88% of employers are willing to offer more for the right talent, employers are attempting to keep a lid on the value of increases with over half (51%) planning to keep salary increases by less than 3%.
A further 27% will increase salaries between 3% and 6%, while 10% will increase above 6%.
Esther Clerehan, talent specialist, founder and CEO of CLEREHAN, told AdNews: “Late 2020 through to early 2022 was absolutely huge for job movement, and salary movement.
“While 2022 is still very busy, it’s not quite as full on as it was last year.
“Budgets have been stretched to keep staff, as well as recruit new ones, so now salaries have levelled out a bit and belts are tighter.
“It's still a very active job market but it’s not as nuts as it was in 2021 - but we are vulnerable to another demand surge now with borders open, as it takes longer to find people overseas than it will take for our talent to leave.”
Jimmy Sutton, marketing talent agent, Aquent Australia said: “I feel the salary bubble will burst at some point and gazumping will be a constant concern as it’s the most volatile market I’ve experienced.
“Counter offers are commonplace and it’s understandably confusing and stressful for the talent—a recent candidate of ours had five offers on the table!"
There is still a mismatch between what employers plan to give as a pay rise and what front line marketers expect. Hays found that 84% of today's professionals believe their performance and the demand for their skills merits an increase greater than 3%.
Simon Hadfield at DMCG Global: “I think we can all smell a rat when we have to.
“If I’m working with a candidate who I know has inflated their salary considerably then I don’t feel comfortable representing them.
“If they’re moving agencies for an extra $10,000 or $20,000 and their last move was under two years ago then I’m very wary and will share that with the business or agency I’m working with.
“We all need to be very careful, if agencies begin to pay talent premiums and clients aren’t increasing their remuneration, we’re going to have some ugly redundancies on the horizon.
“With an upper limit to the raises organisations can offer, it’s vital to consider the full value exchange available.”
To bridge the unrealistic pay divide, this year, more than one-third (35%) of employers have improved benefits and working practices to entice more staff.
From allowing agency staff to work an optional nine day fortnight to choosing their own public holiday dates and an international inter-agency staff transfer program all making headlines.
Jaid Hulsbosch, director, Hulsbosch, told AdNews: “To survive these impending changes, companies that are adapting to the new business landscape and taking a more active role in focusing on their employees are flourishing.
“Management teams that commit to the exemplary treatment of employees, treating them almost like family, will find this approach reciprocal.
“All these things are not costly, elaborate, or time-consuming but are as important as things that do cost.
“Most importantly, adoption of a people-first approach leads to loyalty, endorsement of a company through word of mouth, and a rise in corporate culture and performance from job satisfaction and recognition.”
Jimmy Sutton at Aquent Australia: “We recommend businesses be proactive, not only in hiring new talent, but in retaining their staff - such as upskilling their leadership team to maintain a happy culture in this new hybrid-world and ensuring talent are properly rewarded financially to keep up with the market.
“By the time an employee hands in their notice, a counteroffer is usually too late and ends up being a temporary solution.
“More often than not a counter offer of an extra $20k is papering over the cracks and it’s a matter of time before the employee’s real reasons for wanting to leave resurface.”
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