Two-thirds of insurance industry employers plan to increase salaries by more than 3% at review time, and almost all intend to offer some increase, a new survey by recruitment firm Hays says. 

The poll of over 14,000 employers and professionals found 95% planned an increase, and 65% said a skills shortage had forced them to offer higher salaries than planned.     

Staff loyalty was lacking, with just 41% of insurance professionals unquestionably intending to remain with their current employer, with another 38% unsure. The rising cost of living, followed by uncompetitive salaries and a lack of promotional opportunities were top reasons to change job.

“Insurance professionals will prioritise a pay rise, being able to work flexibly and learning or developing technical skills in the next 12 months,” Hays said.

Regional Director Kathryn Carson says both the number and value of increases will rise this year, continuing an upwards trajectory first detected in last year’s Hays Salary Guide.    

“We’re calling this the year of the raise,” Ms Carson said. “The promise of higher salaries reflects the intensity of the skills shortage in today’s jobs market.

“With skills in demand you still have bargaining power, but it’s important to temper it to avoid pricing yourself out of consideration,” she said. "Margins remain tight. The commercial reality dictates that salary increases can only stretch so far.”

Many insurance professionals feel undervalued and underpaid, Ms Carson says, and claim current salaries don’t reflect individual performance.

“Employer and employee expectations in insurance still fail to align,” she said.

Hays found only 11% of insurance employers said they would give a salary increase above 7%, while a little over half flagged 3-6% and another 34% said the change would be just 0-3%.

Meanwhile, two thirds of employees in insurance said a pay rise of greater than 7% was required to reflect their individual performance and demand for their skills, while 27% required 3-6%. Just 7% thought a salary change of 0-3% was reflective of their value. 

Motivating employers to increase salaries was competition for talent, falling real wages, greater pay transparency and more insurance staff asking.

“Employees still feel they have bargaining power and are more confident to negotiate for better pay,” Ms Carson said.

“Many employers find that the pipeline of skilled insurance professionals doesn’t meet their needs. As candidate supply continues to tighten, employers face increased pressure to proactively attract and retain talented employees.”

Employers also recognised that pay rises failing to keep up with inflation impacted employee engagement, wellbeing, morale and job satisfaction and were “stretching their salary increase budget as far as they can to support their staff.” The survey found 13% of employers said they had agreed to ‘substantially higher’ salary increases due to the talent crunch, and 52% to ‘nominally higher’ raises.

Hays recommended considering the whole package when negotiating and says benefits can bridge a financial expectation gap. To stand out, employers should consider opportunities for growth, wellbeing days, additional annual leave, improved recognition, work-life balance and a more positive work environment. 

Ms Carson also says an “abolition of pay secrecy in Australia” was prompting more employers to audit salaries, scrutinise disparities and make adjustments when required to ensure fair and equal pay.