Hays launches FY25/26 Salary Guide: ‘Salary Paradox’ deepens as pay rises fail Australians
Rising dissatisfaction with pay, progression and perks is fuelling a new wave of career change in FY25/26, as Australians demand more from employers, not just in salary, but in flexibility, growth and meaningful career opportunity, according to recruitment and workforce solutions specialists, Hays.
The latest release of the Hays Salary Guide FY25/26, ANZ’s largest and most comprehensive review of salaries and workforce trends, finds a paradox at the heart of today’s labour market: although salaries are rising (ABS, 2025), many employees still feel underpaid, overworked and undervalued as cost of living continues to bite.
Based on a survey of over 12,000 respondents in ANZ across more than 25 industries and 1000 roles, the Salary Guide reveals an ongoing tension between employee expectations and employer offerings, making retention and recruitment more challenging than ever.
The report finds nearly two-thirds (61%) of people are planning to change their career path, with most doing this due to a lack of future opportunities in their current role/workplace (45%) and low salary (42%).
While salary is a key motivator to change jobs, the report also shows that there is a great disparity in what is viewed as satisfactory. Minimal salary rises (2.5% or less) were found to deliver the same satisfaction as no raise at all. Increases up to 14% offer only marginal improvements, while moderate bumps (up to 14-20%) can backfire. The report found that only transformational increases (20%+) have a significant impact on employee satisfaction.
“The data tells a story of paradox and caution,” said Matthew Dickason, CEO, Hays APAC. “Employees are satisfied enough to stay put for now, yet a significant portion are looking to move elsewhere, wary that small pay increases aren’t worth accepting. This should tell employers that despite the cost of living, salary is no longer enough - benefits, progression, and purpose matter more than ever.”
Benefits that matter: Salary is not the only goal
While salary remains critical, employees are increasingly prioritising flexibility, additional leave and health benefits over traditional perks. The majority (58%) rank flexible working as their most valued benefit, followed by extra annual leave days (45%), clear signals that work-life balance trumps outdated offerings like company phones or internet subsidies.
Yet despite this, a disconnect persists: only 21% receive additional leave and employers continue to offer undervalued benefits at scale. Only two of the 25 surveyed benefits were preferred by more than 20% of employees and together, they ranked higher than the remaining 21 benefits combined.
“This points to a clear disconnect that is costing talent and retention. And when salary increases don’t meet expectations, employers should be considering how to soften the blow or incentivise employees with wanted benefits that are beneficial to both sides.”
The Great Re-evaluation: Why 61% will change jobs despite economic uncertainty
One in three workers (33%) changed jobs in the past year, which was primarily due to low salary (35%) and lack of career progression (32%). Yet despite a cautious labour market, mobility remains high, as almost two-thirds (61%) intend to change their career path in the year ahead.
Most plan to leave their current employer (34%) or change industries altogether (6%). Less than a quarter (23%) plan to stay with their current employer but shift roles, increase hours or reduce workload.
For those planning to leave, most employees pointed to a lack of future opportunities (45%), low salary (42%), unchallenging roles (21%) and job security (20%), work-life balance (18%), benefits packages (18%), management concerns (16%) and misalignment with the type of work (14%).
This movement is most prevalent among professionals aged 40-59 in intermediate or management roles - the very cohort most affected by skills shortages.
“With only marginal increases in permanent hiring intentions, this surge in employee turnover signals a critical moment for employers: take action to retain top talent or risk falling further behind in an already competitive market.”
The Productivity Puzzle: An optimistic outlook as skills shortages stabilise
Despite a challenging hiring climate, there are signs of optimism. While 84% of organisations experienced skills shortages in the past year, over half rating them as moderate to extreme, there are early signs that the pressure is easing. Just under half of all employers now report only minor or no shortages at all.
The current bottleneck is not in job creation or candidate supply, but in alignment: businesses cite a lack of human skills, such as people skills like communication, people management, EQ and interpersonal skills (82%); adaptability to change and uncertainty (73%) and creativity - critical thinking, problem-solving, judgement and decision making (59%) - as the primary limitations to growth. These deficits are most prevalent at the intermediate career stage, the very group driving job mobility.
“In response to these needs, 94% of employers say they are prioritising investment in people this year, with a focus on training, automation and structural change. This investment push marks a turning point: one that prepares organisations not only to unlock stalled productivity, but also to embrace the next wave of transformation - the rise of AI.”
AI is causing a gridlock in the job market
While AI tools have made it easier than ever to apply for jobs at scale, they’ve also flooded the market with generic, low-fit applications, making it harder for employers to identify the right talent and for candidates to land meaningful roles.
“We are finding employers are reporting more job applications, but fewer suitable candidates. At the same time, job seekers say they’re applying more, but getting fewer responses. The result is a system gridlocked by volume, not value and growing frustration on both sides.”
“AI presents enormous opportunities in recruitment, but it’s not without risk. When job seekers rely too heavily on AI to generate applications, quality and legitimacy suffer. Candidates need to carefully review and personalise AI-generated content to ensure it’s accurate, relevant, and highlights the human skills employers value most.”
Advice for employers
“Employees are staying put for now, but that will change - and employers who haven’t addressed dissatisfaction around salary, benefits and career progression will lose talent fast.”
“To stay competitive, employers must act now: ensure salaries are benchmarked and transparent, tailor benefits to different employee needs, and invest in learning and development that grows both technical and human skills.”
“With AI disrupting hiring and increasing application volume, it’s also essential to streamline recruitment processes and engage more directly with quality candidates. Above all, make sure your employee value proposition reflects what people actually value today, not what worked five years ago.”
Advice for professionals
“If you're considering a job or career change, define what matters most to you: is it salary, relevant benefits, purpose, or progression? Be clear on what you’ll walk away with, and what trade-offs you’re willing to make.”
“With employers reporting a need for stronger human skills, now is the time to invest in your communication, adaptability and decision-making. While pay is a top motivator, don’t overlook the long game: flexibility, culture and growth opportunities are increasingly becoming deal-breakers. Take control of your development, be selective in your applications, and aim to align with organisations that match both your values and ambitions.”
Download your copy of the Hays Salary Guide for professionals and for employers.
