A new whitepaper from On Q Recruitment explores the key findings of its 2024 Salary & Job Market Report, highlighting how salary trends shape Australia's life sciences industry.
The whitepaper, whose development was led by On Q managing director Catherine O'Mahony, shows how Australian life sciences organisations face the dual challenge of attracting high-value candidates while managing financial constraints.
According to the 2024 On Q Salary & Job Market Report, 28 per cent of managers reported exceeding internal salary guidelines to secure needed candidates. It says this trend highlights a significant shift in salary dynamics and should prompt critical questions about how businesses can remain competitive without jeopardising their budgets.
The 2024 report revealed a pattern of modest salary increases, with most employees receiving raises of between 2 per cent and 4 per cent. These small increments, lagging inflation, have caused many professionals to reconsider their roles.
Market conditions are forcing hiring managers to exceed approved salary ranges. Several factors often drive this adjustment, including increased competition for talent, particularly in areas such as clinical research, engineering, commercial and quality assurance remains high. Other factors include limited candidate availability and retention challenges, with 55 per cent of professionals open to changing jobs for higher pay.
The report identified three drivers of the trend to exceed salary guidelines. They are the urgency to fill roles, the enhancement of packages by bundling higher salaries with attractive benefits, such as flexible work arrangements or professional development opportunities, and the reality of market forces outpacing budget planning.
According to the report, salary expectations have surged faster than planned budget increments, particularly in biotechnology and pharmaceuticals. This gap leaves managers with little choice but to push beyond initial guidelines.
While exceeding salary guidelines may secure top candidates in the short term, On Q says it also poses risks to long-term financial stability. It recommends a range of responses, including regular salary benchmarking, flexible compensation structures, such as performance-based incentives, equity schemes, or non-monetary benefits, and investing in employer branding to appeal to candidates beyond salary considerations.
In addition, On Q says retention is more cost-effective than hiring new talent. It recommends focusing on employee engagement, regular reviews, and tailored career development plans to maintain morale and loyalty.
On Q says that the pressure to exceed salary guidelines is unlikely to ease soon.
"HR teams and executives should align their salary planning processes with emerging market realities, ensuring they have the flexibility to adapt while maintaining financial health. Collaborative planning between finance, recruitment, and leadership teams will be essential to achieve this balance," it says.
