Competition for staff sees companies offer huge pay rises

Salary growth in Australia has been “disgusting” while cost of living has skyrocketed. Most bosses remain stingy – but not all.

Hundreds of Aussies can look forward to a huge boost to their pay packet with one Australian law firm announcing employees would receive an average rise of 10 per cent on their salary.

It’s a staggering jump considering national wage growth has hovered around the 1.5 per cent mark for the past two years.

The law firm, Thomson Geer, which employs around 550 people in Sydney, Melbourne, Brisbane, Perth and Adelaide. made the announcement saying they “can afford it”.

Its CEO Adrian Tembel, who is also chairman of South Australian Productivity Commission, told the firm’s 130 partners that the thriving legal sector was experiencing a “fast moving inflationary environment” for wages.

“A mid-year salary review is obviously an unusual event, but it is justified by the hard work put in by the vast majority of our people this year in unique circumstances,” he said in the memo seen by the Australian Financial Review.

Thomson Geer Chief Executive Partner, Adrian Tembel. Picture: Hollie Adams/The Australian

However, it wouldn’t be a blanket pay rise but was instead based on people’s performances between April and November, although Mr Tembel acknowledged people had been working hard and “that requires reward”.

Mr Tembel said the pay rise wasn’t related to the ‘Great Resignation’, a phenomenon currently being seen in the US with millions of people quitting their jobs.

“We aren’t too sure about the theory behind the Great Resignation concept applying to Australia just yet. This is all part of an enormous level of government and central bank intervention that has pushed our business cycle into a firm upward trajectory for now,” he told news.com.au.

However, competition for quality people was a factor in the decision.

“That said, with demand for our services up there is a lag in building greater capacity through the recruitment and training of graduate lawyers so yes there are some current supply bottlenecks,” he said.

“Of course, this capacity investment will begin to flow through our system in the next year or so and stabilise matters.”

Law firms are dishing out the big bucks to keep staff. Picture: Getty Images

Another Australian law firm Gilbert and Tobin also announced last week that lawyers would receive a 10 per cent pay rise on January 1, while support staff would get a 3 per cent increase. It also bolstered its paid parental leave from 18 weeks to 26 weeks.

Those in the legal industry are lucky. According to some experts, Australia has been suffering for almost a decade from the worst wages stagnation since the 1930s, with employees receiving a minimal boost to their pay.

Yet the cost of basics increased by 61.4 per cent between 2005 and 2020, according to the Australian Bureau of Statistics.

Yet most Aussies won’t be as lucky as people working in the law. Picture: iStock

Despite warnings about the Great Resignation too, employers in Australia generally didn’t give pre-emptive pay rises even if this was better for their businesses, according to Digital Finance Analytics principal Martin North.

“The salary growth in Australia has been disgusting – other than in industries like the high tech industries,” he said.

“The financial stress is very high at the moment, the cost of living is rising and mortgages are rising, but we’ve had very little income growth.”

Mr North said if people wanted higher wages, they would probably need to be proactive and go elsewhere or negotiate with their existing employer.