Job ads, Wages - Pressure Surge

New data shows a rise in job advertisements in August, which will likely continue until the end of the year. Rising economic growth is giving employees greater bargaining power and leading them to ask for higher salaries, according to ASPL Group.

The National Skills Commission’s preliminary Internet Vacancy figure rose from 2.6%, or 7700 job ads, to 301,100 job ads in August 2022. These August 2022 job ads are 37.7% higher than a year ago and 78.9% higher, equivalent to approximately 132,800 available positions higher, than pre-pandemic.

Kris Grant, ASPL Group chief executive, said there was sustained growth in recruitment activity over the past 12 months and had high expectations that the momentum and trend will continue. Grant further explains that it's consistently becoming an employee market. This is because the jobless rate fell to about 3.4% in July, the lowest rate ever recorded in 50 years. Additionally, salaries rose by up to 25% in some service sectors, including the IT and finance sectors, where there are critical skills shortages.

The wage growth for workers outside these professional industries, however, remains low and stuck at historic lows. These wages grew on average at 1.9% over the 12 months to May 2022, whereas the yearly profit growth stood at 28.5% over the year to June 2022, surprisingly the highest level for five years.

Grant explains that employers should ensure that their employees' wages are rising and increase in line with the cost of living. They should cater to the needs of their workers and share some of the profit gains made by the organisation with their staff members. With inflation at 6.1% and likely to increase to 8% by the end of the year, sharing profit gains would help employees manage the resulting higher cost of living.