BUSINESS leaders Australia-wide are meeting the challenges of tough times through creative pay structures that reward performance and help to retain vital staff.

The latest research from Aon Hewitt’s Talent and Rewards division is tracking positive outcomes from creative solutions such as including performance-based pay adjustments as part of enterprise bargaining agreement negotiations.  

“This strategy allows organisations to reward top performers with significantly larger increases while keeping the overall remuneration budget stable,” said Shannon Dooley, Aon Hewitt Talent and Rewards senior consultant.

“In this model, top performers can receive increases significantly above the average outcomes, whereas poorer performers may receive lower allocations or no increase at all.

“Companies can contain costs in line with their budgets, while the best employees continue to be rewarded for good performance.” Mr Dooley said.

Aon Hewitt research showed salary increases had been falling since June 2011, and at the current average of just 3.2 percent a year were barely outstripping inflation.

Mr Dooley said this was in stark contrast with highs of 4.8 percent in June 2008. The downward trend is expected to continue for at least a year.

Overall, the Aon Hewitt General Industry Remuneration Report highlighted an issue many employers were facing in tougher times: how to retain top talent despite a decreasing review budget.

Mr Dooley pointed out that, despite rising unemployment reducing the intensity of the battle for talent, ensuring employees were positively engaged remained just as important to an organisation’s success.

“In a market such as this, where the pool of available candidates increases, employers do not necessarily need to increase remuneration to secure or retain employees, and this is what we are seeing reflected in the figures,” Mr Dooley said.

“It’s also true that when times are tough, companies simply can’t afford to increase salaries significantly, meaning focus may be better placed on other areas of the ‘total rewards’ remit and/or truly differentiating performance.”

Mr Dooley said the report revealed that voluntary attrition rates, the measure of the number of employees choosing to leave organisations, had also fallen across most sectors. This could indicate employees were concerned about job security and prospects, so decide to stay with the job they already have.

He said there were no major surprises regarding sectors seeing the biggest remuneration decreases.

Auto-manufacturing, for example, saw some of the lowest salary increases in 2013, and with car manufacturing winding down in Australia, the trend is not likely to reverse.

The remuneration report figures also indicated that the expected slowdown in mining has become a reality, with mining, milling and smelting all soft, “in stark contrast with the results we have seen in the past”. But there was one industry sector trending growth.

“Energy, including oil, power and gas did well in 2013, and are likely to continue in this vein in 2014, although it’s important to remember that their new normal is significantly below boom time levels of the recent past,” Mr Dooley said.

He highlighted some key solutions to employers’ reward and remuneration challenges identified at Aon Hewitt’s recent Reward Think Tank, where 70 reward professionals got together to discuss the key reward issues of 2014.

“When organisations have reduced review budgets they need to get creative, particularly when lower average annual increases may not be enough to retain the best talent,” Mr Dooley said.

“Aon Hewitt’s Best Employer research has consistently shown that differentiating rewards based on a combination of capability and performance leads to higher levels of staff engagement, which translates to a measurably healthier bottom line.”

The report showed the fastest moving sectors in 2014 are forecast to be oil, power, gas, pharmaceuticals and medical. The slowest sectors are tipped to be auto manufacturing and engineering.

http://www.aonhewitt.com.au/

ends

THE Federal Government is planning to introduce a Seniors Employment Incentive Payment which will pay a business up to $3250 if it hires an over-50 job seeker who has been unemployed for at least six months and is receiving income support.

Assistant Minister for Employment Luke Hartsuyker

Assistant Minister for Employment, Luke Hartsuyker, said it was part of a commitment of more than $393 million in December’s Mid Year Economic Fiscal Outlook to fund three job seeker-support programs to help solve a debilitating long term unemployment problem nationwide.

"The funding includes a Job Commitment Bonus payment of up to $6500, which will encourage long-term unemployed young Australians to find a job and remain off welfare,” Mr Hartsuyker said. A similar amount was planned to help people relocate to find full-time work.

"The Relocation Assistance to Take Up a Job programme will be implemented which provides up to $6000 to assist job seekers move to take up a job,” he said.

Mr Hartsuyker said the Federal Opposition was having an negative impact on the government’s plans to tackle long-term unemployment by not passing legislation that would remove the carbon tax and mining tax, which had a negative impact on jobs creation.

Mr Hartsuyker said Federal Labor should acknowledge its appalling legacy to job seekers and get behind the Federal Government’s plan to assist long-term unemployed people back into work.

“Under Labor the number of unemployed rose by 200,000,” Mr Hartsuyker said. “Since the carbon tax was introduced in 2012 the number of unemployed Australians has increased by 87,000.

“Labor’s legacy was to leave more than 700,000 unemployed Australians, the highest number in 15 years. The best thing Labor can do is get out of the way and let the government deliver on its mandate to get rid of the carbon tax, rid of the mining tax and get on with the job of building a stronger economy.”

Mr Hartsuyker said the Federal Government was also reviewing how it could “reinvigorate” the former Work for the Dole program.

http://www.deewr.gov.au/

ends

IN THE SAME WEEK as Queensland has had an 800-delegate summit formulate a 30-year plan, Victorian business leaders have gathered to outline a key ‘reform agenda' to the major political parties in the lead up to the 2014 Victorian Election and beyond.

Mark Stone, VECCI chief executive.

One of the top items on the list was Victoria's outstanding trade in education, with the summit calling for the sector to be more widely recognised and supported as a key state advantage.

More than 100 business representatives from throughout the state highlighted priority focus areas at the Victorian Employers' Chamber of Commerce and Industry (VECCI) Victoria Summit yesterday.

They called on Victoria's political leaders to address their key recommendations to ensure the state is truly international in its focus and activities.

VECCI chief executive Mark Stone said, "Education is not just a ‘commodity'; it has strong links to wider community well-being and our quality of life.

"For this reason, Victoria's international engagement strategy must be linked with a whole-of-state innovation strategy, not developed in isolation."

A range of recommendations came out of VECCI's  reform discussions, including a focus on:

• Elevating conference and exhibition infrastructure planning prioritisation and funding to attract more business events and conferences aligned to Victoria's priority sectors.
• Protecting the curfew-free status of airports and a long-term plan for a third Melbourne airport.
• Introducing a public transport full concession entitlement for international students and developing a disposable, one-day ticketing option.
• Creating an ‘AsiaReady' voucher scheme to help prepare small and medium enterprises (SMEs) take advantage of the growing Asia marketplace.

"Helping Victorian business to expand and deepen their international focus is one of the four major themes that the major parties are being encouraged to focus on as they develop their policies in the lead up to the 2014 state election," Mr Stone said.

The other themes that developed out of the summit included making Victoria more competitive; leveraging human resources "to build an even smarter Victoria"; and making Victoria "even more liveable".

Delegates discussed recommendations to support the key themes, with Minister for Innovation, Services and Small Business, Louise Asher representing the Premier of Victoria, and the Deputy Leader of the Opposition, James Merlino, sharing their views on reforms that can drive further economic prosperity across the state.

http://www.vecci.org.au/

ends

THE astounding acceleration in market penetration of professional online network, LinkedIn, from 4million users in March this year to more than 5million today, has also revealed its most active user sectors: information technology and services, construction, financial services, education management, and hospital/health care.

LinkedIn has networked almost a million new handshakes in Australia in just eight months.

LinkedIn's membership base has had an extraordinary acceleration since October 2008 when it had just 540,000 members in Australia and it is now regarded as the world's largest professional network on the internet.

Globally, the professional network currently attracts more than two new members every second and has grown to 259 million members this year, in its 10th year of operation.  LinkedIn has also expanded its local presence with over 150 staff across three offices in Sydney, Melbourne and Perth.

LinkedIn Australia, New Zealand and Southeast Asia  managing director Clifford Rosenberg said with more than  5 million professionals in Australia, LinkedIn is now reaching critical mass with early adopters, such as professionals in IT and marketing being joined by professionals in other industries, including healthcare and education.

The student market continues to be LinkedIn's fastest growing demographic globally, with more than 30 million students, with recent university graduates realising the potential of LinkedIn in enabling them to become more productive and successful in their careers.

He said LinkedIn's Influencer program has now attracted more than  300 global leaders to engage millions of professionals on LinkedIn with proprietary insights, since its launch a year ago. 

In 2013, four Australia-based influencers joined the program, the latest of which is Qantas CEO, Alan Joyce. Mr Joyce joined the growing list of influencers in Australia, which now includes Mike Smith (CEO, ANZ), Creel Price (entrepreneur and founder, Entreprenaissance Movement), Matt Barrie (CEO, Freelancer.com) and Naomi Simson (CEO, RedBalloon).

"This is yet another important milestone, illustrating that Australians really understand the potential economic opportunities that they can create by leveraging online professional networks," Mr Rosenberg said.

"We are also seeing a strong uptake from our Australian members leveraging LinkedIn as a professional content platform to discover and share insights, locally in Australia and globally as well.

"Our rapid product innovation, which includes adding more influencers to our platform, more enhanced mobile applications and the recent launch of LinkedIn University Pages, is enabling us to deliver even greater value to our members."

He said LinkedIn continued to see strong demand and response for its suite of services, including talent and marketing solutions.

"We are seeing a growing, diverse portfolio of Australian companies taking notice of the increasingly massive data set LinkedIn provides and using it to transform the way they hire talent, market their brand and sell more effectively," Mr Rosenberg said.

A number of global companies based in Australia are also early adopters of LinkedIn's latest product innovation. 

Mr Rosenberg said, for example, Telstra was among an exclusive list of global companies leveraging LinkedIn's recent roll out of Sponsored Updates to raise awareness and shape perception, drive quality leads and build relationships with Australian professionals.

LinkedIn has a diversified business model with revenue coming from sectors it calls Talent Solutions, Marketing Solutions and Premium Subscriptions products. Headquartered in Silicon Valley, California, LinkedIn has offices across the globe.

LinkedIn membership usage in Australia:

www.linkedin.com

-Ends-