“Budgets for salary increases in Australia are expected to remain steady in 2025 as employers roll back their predictions on merit budget hikes,” reports HRD Australia.
Salary budgets steady for 2025
According to Mercer’s Australian Salary Outlook 2025, overall salary increase budgets are expected to remain steady at four percent. This aligns with the actual and budgeted median total salary increases over the past two years. The report highlights a stabilisation trend as employee turnover has eased to pre-pandemic levels and the demand for new hires softens.
Merit salary increases reach a decade-high
A notable development in 2024 was the actual merit salary increase budget reaching a 10-year high of 3.8%. The recent increase in salaries was largely influenced by difficulties in attracting and keeping talent due to a rise in employee turnover. To address peak turnover rates and the pressures of the cost of living, organisations deemed it necessary to adjust salaries competitively.
These salary hikes indicate a wider organisational commitment to enhancing employee well-being while remaining competitive in a tighter labour market. Nevertheless, the report forecasts a slight decrease in merit salary budgets to 3.6% in 2025, attributed to stabilising turnover rates and inflationary challenges.
What this means for EAs
For Executive Assistants, these trends highlight the significance of backing retention initiatives within your organisation. Whether it’s by securing competitive pay for your executive team or playing a role in wider workforce strategies, grasping these salary trends can be crucial for shaping organisational priorities.
Declining turnover in Australia
According to Mercer, employee turnover in Australia declined to 18.6% in 2023, down from the 21.4% the year prior. This trend extended until 2024, with an average turnover of 10.8% in the first half of the year.
“Employees are looking for job stability in uncertain times and are less inclined to jump ship,” the report read. “As workers seek security in their roles, organisations are finding themselves in a new landscape where retention takes precedence over recruitment.”
In fact, Mercer revealed that only one in four employers in Australia have plans to add new staff in 2025, with 30% remaining undecided.
“With employee retention strengthening, the urgency to seek external talent has diminished and, coupled with a subdued economy, organisations are now more focused on managing costs and optimising their existing workforce rather than aggressively pursuing new hires,” the report read.
