Small businesses boosting staff salaries to stay competitive

25.05.10

 

A recent survey by the Australian Institute of Management (AIM) has found that salaries for employees working at businesses with an annual revenue figure of $10 million have increased 4.3 percent in the past twelve months. At the same time the rise in salaries in large businesses has increased 3.7 percent.

The increase in salaries in smaller businesses is in contrast to the outlook in employment in smaller businesses with 31 percent of small companies saying that they needed to reduce permanent staffing levels in the past year. The message for the staff that remain is that they are seen as key to their respective businesses. Senior staff, among small businesses, were particularly well rewarded with 4.5 percent of staff at that level receiving an increase.

Staff retention in general was seen as a priority for small businesses. Many smaller companies felt that larger companies may move to poach their key employees as the economy improves. One of the keys for small business to address this concern was a need to find more creative ways to reward staff, outside of just pay increases.

For example:

  • 29 percent of small businesses are making additional contributions above the superannuation guarantee rate of 9 percent;
  • Training budgets had been increased by small businesses to ensure staff were well rewarded with 40 percent of companies expecting further increases to training budgets in 2011;
  • There was an overall increase in bonus schemes in small businesses;
  • There were also increases in benefits such as fuel allowances, airline lounge memberships and car parking benefits;
  • And finally flexible work hours such as differing starting and finishing times for senior executives were employed by two thirds of respondents.

As the economy improves and the labour market tightens small businesses seem more determined than ever to maintain their talent pool. With competition tightening every company is looking for a competitive edge that won't disrupt the bottom line.

 

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