Stagnant wages, job insecurity plaguing Australian financial sector

Tight budgets have sparked a freeze in hiring in professional industries, an Australian recruitment agency says.

A new report by financial services recruitment agency Keegan Adams finds the gap between salary expectations and pay packets on offer continues to widen.

“We are seeing tight budgets hold salaries down and bring productivity to the top of companies’ concerns,” Keegan Adams managing director Claire Tate said.

“They also mean smaller hiring budgets, which – with confusion and job insecurity keeping employees in place – are seeing a ‘great freeze’.”

The latest wage and inflation data shows pay has just overtaken the cost of living.

On Tuesday, the RBA held the cash rate and the central bank governor Michele Bullock said inflation was headed in the right direction.

The latest national data puts the consumer price index at 2.4 per cent – in annual terms – as of December, with wages rising 3.2 per cent last year.

The Keegan Adams survey finds financial services wages “stagnated” at 3.6 per cent last year despite that increase topping the national average.

The financial sector is paying workers lower base salaries and rewarding “exceptional contributors” with larger bonuses, Keegan Adams finds.

And at the same time, professional services firms are putting time and money into leadership coaches and rejigging employee training and “wellbeing” schemes.

But tighter budgets mean fewer improvements to health and child care, less employee ownership/share schemes, and fewer boosts to parental, carer and mental health leave, the survey finds.

Working from the office remains a key point of friction in corporate Australia.

The survey finds 47 per cent of workplaces mandated more days in the office in 2024, up to a 3.25 days per week average.

Ten per cent of employers believe working from the office rules affect employee satisfaction. Almost 60 per cent of employees say they are less happy and less likely to stay in their job.