Pay rise? Half of companies surveyed say no while 40pc look to lay-offs

Almost half of Australian earners won’t get a pay rise this year and a significant number of their colleagues will lose their jobs, a survey of business leaders shows.

Almost 50 per cent of Australian workers won’t be getting a pay rise this year. Picture: Jeremy Piper

Almost half of all Australian companies are skipping awarding an annual pay rise, while almost 40 per cent say they’re considering laying off as much as 20 per cent of staff, a survey shows.

A staggering 75 per cent of business leaders surveyed said their business would take measures related to staff, including consolidating departments, in a bit to reduce overheads.

The bleak outlook is the summary from a YouGov survey commissioned by tech HR platform Deel, which quizzed 357 business leaders who had staff counts of five or more.

The global and Australian tech sector continues to undergo widespread lay-offs as the aftermath of quick decision making and overambitious leaders during the pandemic takes a toll on workers.

Deel chief executive Alex Bouaziz spoke to The Australian in Sydney during a visit from Israel this week.

While the picture painted by the survey was bleak, he said he believed the 3.5 per cent unemployment rate in Australia showed there was hope for workers facing lay-offs.

Deel chief executive and co-founder Alex Bouaziz. Picture: Matt Writtle

Of those looking to axe staff, 11 per cent said they would cull 20 per cent or more, 15 per cent would shed between 10 to 15 per cent of staff and 12 per cent said they would lay off up to 10 per cent.

Mr Bouaziz said when it came to lay-offs, Australia was similar to the UK and the US where it was relatively easy to let staff go.

“In France however, when you’re getting laid off and companies are rupturing a contract, the employee gets a salary for the next 18 months,” he said.

Staff facing the axe should always try to negotiate a larger package from their employer as many companies wanted to keep redundancies quiet, he said.

On combating inflation costs, 92 per cent of business would actively seek to reduce costs, according to respondents to the survey.

About 32 per cent of business leaders said they would review and reduce overheads, 20 per cent would consolidate departments and functions, 21 per cent would “amend” organisational structure, 17 per cent would decrease headcount, 16 per cent would outsource or hire global staff and 16 would minimise spending on staff training and courses.

While 47 per cent of respondents said they would skip the annual pay rise, about 33 per cent said they would provide a merit-based pay rise.

Wage increases were one of the top pressures human resources team faced followed by employees requesting flexible work arrangements – as well as employers asking how they could transform their workforce, how they could increase productivity and how they could retain and source talent.

Deel country lead Shannon Karaka.

Australian tech companies targeted different countries for different reasons, said Deel’s country lead, Shannon Karaka.

“When it comes to go to market expansions, Australia will go to the US, the UK, Canada and Singapore. However, when it comes to tech talents, Australians will hire from the Philippines and India and increasingly eastern Europe,” he said.

“A lot of our clients are now hiring developers from Poland.”

Mr Bouaziz said Australia was missing out on a big opportunity to hire from Latin America.

“For us, there’s a big opportunity in Latin America; the people are very talented but Australia doesn’t seem to hire from there,” he said.

Originally published as Pay rise? Half of companies surveyed say no while 40pc look to lay-offs