A combination of market forces should push insurance salaries up in the coming year, according to recruitment firm Hays.

Releasing its 2011 guide, the company predicts a “perfect storm” of conditions will put upward pressure on salaries.

Director Jane McNeill says the combination of employers indicating they are looking to hire, skills shortages and a widening gap between candidates and employers over salary expectations will push wages up.

The guide says 45% of insurance employers expect to increase permanent headcount over the coming year, and staff turnover has already increased in 31% of organisations.

“The employment market over the past 12 months was dominated by low unemployment and increased job vacancies,” Ms McNeill said. “At the same time, candidate confidence has continued to grow and skills shortages are now emerging.”

But despite the predictions and market conditions, she says widespread salary increases are yet to be seen.

Hays found that only 11% of employers increased salaries by more than 6%, while 8% did not increase staff wages at all.

And the outlook for the coming year looks similar, with 41% of employers intending to increase salaries by less than 3% and 45% planning to increase salaries by between 3-6%, while 8% of businesses have no salary increases planned.

Two trends that have emerged are that salaries in states which were lagging behind the rest of the country have equalised, and individuals with claims experience have seen their salaries move up from the low end of the salary scales.

Ms McNeill says a “massive shortage” of claims and assistant claims professionals remains, with employers now willing to take on less experienced staff.

In another anomaly, salaries for life insurance underwriters have increased in NSW due to a shortage of experienced candidates in a time of high demand.