Mercer Remuneration Report shows salaries remain steady for drinks industry

Mercer Remuneration Report shows salaries remain steady for drinks industry

Mercer Remuneration Report shows salaries remain steady for drinks industry

April 28, 2022

Drinks industry salary growth remains steady growing by just 1.5 per cent at the median, significantly less than CPI growth for the year which grew by 5.1 per cent annually according to the latest figures from the Australian Bureau of Statistics, the largest jump since the introduction of GST.

Rupert Griffin, Mercer’s Industry Networks Leader, said: “The latest Drinks Association report shows a mixed picture. Median salary increases remained subdued at the end of 2021 across our databases. But, just over a third of the FMCG incumbents received increases above the overall median figure with some 17 per cent seeing movements in salaries in excess of 5 per cent. This speaks to the retention pressures that organisations faced as the labour market tightened and particularly for key roles.”

A number of roles received higher increases. For the Drinks Association group, Cellar Hands, Winemakers, Accountants and Key Accounts Managers all received increases in excess of the overall median figure.

Each year Mercer provides the Drinks Association and its members with an annual Remuneration Review; an invaluable source of drinks industry specific remuneration benchmarks for comparison with other industries within Australia, by job and career level from all participating Drinks Association members.

Salary Growth & CPI

Broadly speaking, Mercer’s measure of national remuneration movements across all industries for fixed pay have fallen from around 2.5 per cent in 2019 to 1.9 per cent in the last quarter (September - December 2021). This is attributed to the economic slowdown caused by the pandemic.

The FMCG sector, including the drinks industry, saw median salary growth at 1.5 per cent in the last quarter of 2021, well beneath CPI increases and in contrast to the increases of the all industries median.

The official measure of wage increases (WPI), as measured by the Australian Bureau of Statistics (ABS) in the year to December 2021 was 2.3 per cent while inflation (CPI) rose to 3.5 per cent over the same period. The Consumer Price Index (CPI) rose a further 2.1 per cent in the March 2022 quarter and 5.1 per cent annually, according to the latest data from the Australian Bureau of Statistics (ABS).

Remuneration forecasts and CPI

The Reserve Bank of Australia (RBA) expects inflation growth to be above 3 per cent across the rest of 2022, before cooling slightly in 2023. As a result of rising inflation combined with historically low unemployment and a dynamic labour market, Mercer expects salary increases to rise over 2022.

Mr Griffin said, “Mercer regularly surveys our clients and asks what their budgeted remuneration increases are for the year. The overall median forecast is 3 per cent which is still below the current inflation expectations. For many employees their salary increases could represent a real terms decrease. Add to that recruitment and retention challenges and you have a perfect storm for higher increases. But, many organisations we speak to are deciding on their remuneration budgets while also setting aside additional budget to respond to attraction and retention challenges.”

The Mercer Remuneration Report also provides comparison information on areas such as gender participation, as well as wider labour market and remuneration trends and insights.

Mercer’s database has grown again this year and the report relies on data from over 900 organisations and 475K people in jobs across those organisations. When reporting remuneration movements, Mercer track the same people, in the same job, in the same organisations and the change in their fixed salary from year to year. The Mercer team are on hand to provide participating members with ongoing support and assistance with interpreting data.

The Remuneration Survey is a Core Service provided to Drinks Association Category One members.


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