Three-quarters of Australian tech workers will look for a new job over the next year, with upcoming salary increases unlikely to match their expectations as cost of living pressures bite, a new report has found.

The Hays Annual Salary Guide for FY24-25 is based on a survey of more than 15,000 employees and professionals, covering more than 1,270 roles across 26 industries.

In a growing trend across recent years, the survey found that whilst the majority of tech firms are set to give pay rises in the next 12 months, these increases won’t match the expectations of employees and are unlikely to do enough to prevent staff from looking elsewhere.

The survey found that 84 per cent of tech companies are planning to raise salaries in the next pay review.

While this will be welcome news for Australian tech workers, the increase is unlikely to match their hopes and expectations.

Just under half of the employers are planning to raise salaries by more than 3 per cent, despite nearly 85 per cent of tech workers expecting a pay rise of more than 3 per cent.

According to the survey, 35 per cent of employers are expecting to raise salaries by less than 3 per cent, compared to just 22 per cent of employees.

While less than 10 per cent of employees are looking to increase pay by between 6 and 10 per cent, 20 per cent of employees are expecting this.

There is also a significant mismatch when it comes to a major pay raise of more than 10 per cent, with just 6 per cent of bosses expecting this compared with more than a quarter of workers.

This discrepancy will likely see many tech workers seeking different roles with higher salaries, Hays APAC CEO Matthew Dickason said.

“The mismatch between what employees want and what employers are willing to offer will play out over the next year, with 35 per cent of employees being dissatisfied with their salaries and 77 per cent saying it doesn’t reflect their individual performance,” Dickason said.

“We are seeing a trend of employees expecting higher salary increases over the past three reports, with 58 per cent of employees indicating they believed they would benefit financially from changing jobs in the next 12 months.”

Salary mismatches

The annual Hays reports have found rapidly rising salary expectations over recent years.

In the 2019 iteration of the report, under 70 per cent of employees surveyed said they expected a pay rise of less than 3 per cent in the next year.

By 2024, this number has increased to 84 per cent.

With dissatisfaction over salaries and low chances of an adequate pay rise, many tech workers will be looking to find a new job in the coming months, the report found.

According to the survey, 77 per cent of employees are currently looking or planning to look for a new job in the next year, with the cost-of-living crisis the primary reason for doing this.

“Salary is undoubtedly the most critical factor in attracting, rewarding and retaining technology professionals today, with 61 per cent of employers being prepared to offer above the standard package to secure a candidate,” Dickason said.

There will also likely be jobs there to apply for, with more than half of the surveyed companies saying they are planning to increase their headcount in the next year.

Of these employers, nearly 60 per cent are planning to boost their workforce by more than 6 per cent.

The report found that individual performance is still the primary factor used by employers to determine the size of a salary increase, followed by responsibilities, expertise, skills shortages, and the organisation’s overall performance.

According to the survey, 70 per cent of employees expect business activity to increase in the next year, and nearly 60 per cent think they’ll see an increase in overall productivity.

Last year’s version of the Hays salary guide found that more than 90 per cent of employers were set to offer pay rises, with the majority to be between 3 and 6 per cent. But less than a third of employees surveyed said this increase would be adequate.