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Creation Date: Wed, 30 Jun 2010 GMT

Remuneration and Recruitment in Property

Remuneration Report findings

The dramatic impact of the global economic conditions on property market remuneration policies, seen from 2008, appears to be all but over and contributors to the 24th edition of the Avdiev Property Industry Remuneration Report indicate an intention to move back to their practices of earlier years.

No companies are expecting to reduce pay in the next 12 months at the senior level, although 5 percent had previously done so due to poor business conditions.

Last year 41 percent of contributors reported a pay freeze for senior staff, while just 8 percent expect to freeze pay this year. Fourteen percent of companies are giving a minimal increase in pay in the coming year, a similar level to the 12 months previous.

However, the majority of contributors expect that they will either give the "usual" full increase in pay of 4 percent to 5 percent or the "usual" full increase plus an additional percentage to compensate for last year's freeze.

The median outcome of remuneration reviews reported in the 12 months from May 2009 to April 2010 was 0 percent increase for senior executives, 1.5 percent for mid-level staff and 2.0 percent for juniors. This result reflects the high number of companies freezing and, in a few cases, reducing remuneration.

Contributors reported that they expect remuneration will increase by a median of 4 percent for all levels of employees at the next reviews, from May 2010 to April 2011. This is a significant increase and will vary between market sectors.

Recruitment

The outlook for hiring new senior staff appears to be improving. Almost half of contributors expect that they will fill vacancies as they arise as a matter of course, compared to 37 percent being in that position in the previous year. Just 5 percent of companies will continue to freeze recruitment, compared with the 14 percent finding last year.

The growing recruitment activity will be increasingly handled in-house, which will be unwelcome news for recruitment companies.

In addition, it is expected there will be a decrease in the number of companies creating new positions in the next year, declining from 14 percent to 10 percent of companies. When new positions are created, it will be to bring in new skills or due to business expansion.

A higher percentage of companies surveyed expect to be able to create a position for opportunistic appointments. However, rehiring previous employees made redundant in the previous 12 to 18 months does not appear to be on the agenda. Having cleaned out non-essential staff, companies now want a new workforce for the future.

Serious pay negotiations lie ahead. How much will be enough?

Written by Rita Avdiev, June 4, 'Property Australia'