Based on Mercer’s remuneration database, salary movements passed on to Council staff over the past five years have demonstrated that the historic gap between the Local Government and private sectors is slowly closing.
In 2006/7, the median fixed packaged increase for employees working in Councils was 3.0%, compared with 4.2% across all industries (a difference of 1.2). In 2001, Councils passed on an increase of 2.7% compared with 4.5% across the general market (a difference of 1.8).
In the year to November 2007, jobs in health and building plus planning and development received the highest increases (after management), with individuals receiving a median 6.4% increase in employment cost. This supports the views from Councils that planners and civil engineers are ‘hot jobs’ and currently difficult to attract and retain. These positions are similarly in need across the private sector.
The high increases shown for specific jobs suggest Councils are making these adjustments to keep up with external labour market demands. According to Council responses in Mercer’s 2006/7 Local Government Report published each November, the main reasons for voluntary departure of these technical and professional staff included other employment opportunities (76% of Councils), dissatisfaction with remuneration (48%), career prospects (44%) and job role (40%).
However, while Council employees in specific jobs are receiving increases at similar levels to their counterparts in the private sector, remuneration levels across all jobs continue to lag behind the private sector.
The chart above compares positions surveyed in Mercer’s 2006/7 Local Government Report to jobs of comparable size and complexity in the private sector.
Each job has been evaluated using the Mercer Cullen Egan Dell Job Evaluation methodology to determine its job size. This score has been used as a basis for comparison to jobs in the private sector with the same job size points score. The private sector figures are based on Mercer’s ‘all industries’ criteria, which represents the general remuneration market. This is derived from Mercer’s extensive remuneration database with data from over 1,000 organisations.
Mercer has charted the median of remuneration per annum against job size, taken the line of best fit to represent the local government market and used its ‘all industries’ criteria to show how the median compares to the private sector. This trend line shows Local Government remuneration levels for entry level employees to professional and middle management are between 6 and 25% below the private sector.
The difference is smaller for lower level jobs but increases proportionally with job size and complexity.
The chart reveals that median remuneration in Local Government is sitting below the 25th percentile remuneration in the private sector. The 25th percentile refers to the point where 25% of salaries in the market fall below this point and 75% of salaries fall above this point.
This trend is not expected to change in the near future with forecasted movements below the general market. Average remuneration increases in employment cost are forecast to be 3.3% in 2007/8 and 3.0% in 2008/9 across all employees in Local Gvernment, with the private sector anticipating a corresponding increase of 4.2% and 4.0% respectively.
About the Local Government Report
Mercer has published The Local Government Report for approximately 20 years. The survey provides salary information for 106 positions plus Human Resources policies and practices specific to Councils.
To find out more about the Local Government Report, please visit www.imercer.com/australia/lgr or contact Customer Service on 1800 645 186.
* Copy supplied by Mercer
