Property industry remuneration grew strongly in 2021 and pay rises are expected to return to pre-pandemic levels this year, according to our recent survey.
As the economy ‘opens up’ and we ‘learn to live’ with the virus, the property industry is now looking beyond the pandemic and developing strategies to tackle the issues of the future. The economic environment is mixed. International and state borders have reopened, 95% of the population has been vaccinated, and ‘work from home’ orders have been lifted.
But inflation is rising, and although interest rates are on hold for now, they are expected to head higher. The catastrophic floods in Queensland and New South Wales and the war in Ukraine are casting a shadow over the political and economic landscape too.
Nearly half of the businesses surveyed said the outlook for the next 12 months is ‘better’. Three in every five of the businesses surveyed said they are doing ‘well’ or ‘very well’ in the current economic climate. However, more than one quarter admitted they are doing ‘worse’ than before the pandemic.
Despite the uncertainties, the Avdiev Property Industry Remuneration Report’s March 2022 survey found that during the latest round of pay reviews, property industry businesses recorded a median pay increase of 4%, double the 2% recorded at the same time last year.
Property industry pay continued to outpace wages in the broader economy. To December 2021, the Wage Price Index for the broader economy rose a comparatively modest 2.3%.
Looking ahead to the next round of pay reviews in 2022, two thirds of participants surveyed said they expect pay increases will return to pre-pandemic levels of 3%.
Survey respondents told us that the top three factors they took into account when considering pay rises were performance, market rates and staff retention.
The battle for staff
Nearly half of the businesses surveyed said they have increased headcount over the last 12 months. However, skills shortages are making it difficult to recruit and keep employees, according to comments made by survey participants. Two-thirds of the businesses surveyed told us they are experiencing a skills or staff shortage.
One third said staff attraction, retention and shortages is the most significant challenge they face over the next 12 months. Many firms mentioned their staff are experiencing “burnout”, and some are choosing to leave the industry.
Businesses are looking for creative ways to hire and retain staff – such as offering wellness programs and greater flexibility around work hours and location. Promotions and pay rises are also well-established sweeteners. The tightness in the labour market and the high-inflation environment could compound upwards pressure on property industry pay in the period ahead.
WFH: Getting the balance right
Working from home poses structural challenges for the property industry, but it’s also an issue for individual businesses, as they manage spread-out workforces and staff in the office and at home.
Almost one fifth of the businesses surveyed have staff returning to the office full time. But most are pursuing hybrid models, with about three quarters expecting workplace flexibility to continue.
Gender pay equity on the agenda
Property companies are getting serious about addressing the gender pay gap.
Nearly three quarters of the companies surveyed are monitoring gender pay equity, and more than half are taking steps to address the gap. There’s still a way to go, with only about three quarter of the companies surveyed paying men and women the same for the same job.
The highly cyclical property industry is better equipped than most to adapt to altered circumstances. Our survey shows the industry has adapted to the altered landscape and is looking optimistically forward to a more stable future. They are developing creative, practical strategies to address the challenges they face.
We hope this newsletter provides useful information and context for your next round of pay reviews. Please contact me if you have any questions or would like any information on our Avdiev Report remuneration products or tailored remuneration reviews.
The data and observations are contained in our latest Avdiev Property Industry Remuneration Report 2022©, the culmination of our extensive surveys about pay and business trends in the property industry.
The report gives objective insights into property pay trends for more than 360 property roles, including in investment, development, building and construction, agency, advisory, consultants and retail.