employment insights 2013/14

Transcription

1 salary & employment insights 2013/14 legal Australia

2 table of contents Introduction About Hudson legal under pressure: doing more with less is the new commercial reality Market commentary conclusions salary tables Australia research methodology hudson's thought leadership program

3 introduction I am pleased to introduce the Hudson Legal Salary & Employment Insights for 2013/14. Each year, we conduct a comprehensive study of 318 employers and 130 employees in Australia and New Zealand within the legal industry. We analysed their responses and cross referenced them with our own data to provide a salary guide for the legal profession that offers rich data, industry perspective and fresh insights. This guide is set in the context of the economically challenging times that have become the norm around the globe. Market conditions continue to be tough both in Australia and New Zealand. Over the next 12 months, the challenge for employers is to attract and hold on to the people who can help them thrive in uncertain times. For this best-in-class talent there will always be job opportunities and firms must equip themselves to compete for these highly prized employees as best they can. We undertook research to understand what kind of impact the economic environment is having on Australian and New Zealand workplaces and how it is affecting work practices, compensation and benefits and, importantly, employee engagement, morale, loyalty and job seeking behaviour. In this year s Salary & Employment Insights, we explore the push and pull factors for those seeking new roles and evaluate the salary expectations of today s employee. We hope you will find our Salary & Employment Insights valuable. As always, we welcome your feedback. Dean Davidson National Practice Director Hudson Legal Executive General Manager, Regional Australia australia legal salary & employment insights 2013/14 1

4 about hudson legal As a leading global recruitment specialist, we meet the challenge of recruiting, hiring and managing employees while meeting demanding deadlines. Through applying proprietary tools, specialist talent management and recruitment expertise, we can pinpoint individual's competencies and motivations matching private practice, in-house and public sector legal professionals with the right organisational culture and optimum role for long-term performance. Working with many of Australia s leading organisations, our strong brand enables us to attract and select the right people to help you grow your business. Our dedicated legal consultants have earned the respect of their legal clients from a range of industry sectors. Most our legal consultants are former qualified lawyers who have worked in the Australian legal market. They have strong and active relationships with many top Australian and international law firms, as well as a wide range of companies and federal, state and local government authorities. They are also well networked within the legal community and have strong and active relationships with many high quality lawyers. Hudson understands the legal profession in Australia, and as a truly international and networked organisation, we are able to source opportunities and people from not only Australia but across the globe. We also strive to keep you up to date through timely research and thought leadership. 2 legal salary & employment insights 2013/14

5 four out of five employers say their teams have to do more with less. Under pressure: doing more with less is the new commercial reality 2013 has been a slow year for the global economy 1 and market conditions remain tough all over the world. Growth is easing in the US, Japan and China; Europe is in recession. 2 The IMF has cut its global economic growth forecast to 3.3% for 2013 (down from the January forecast of 3.5%) but growth is expected to rise to 4% in The IMF forecasts that the Australian economy will grow by 3.0% in 2013, rising to 3.3% in Australia is the world s 12 th largest economy 5 and its long-term economic outlook remains Fig 1 positive. Growth is expected to continue and the unemployment rate is forecast to remain steady at around 5.5%. 6 Inflation is expected to remain in the RBA target range of 2 3% in Workplaces under stress These challenging conditions are having a marked effect on the workplace. Australian and New Zealand employers are experiencing increased pressure on budgets (78.9%), greater workloads (69.4%) and more stringent headcount approval processes (62.5%). IF A MEMBER OF YOUR TEAM LEAVES AND IS NOT REPLACED, WHAT HAPPENS TO THE WORK THAT WAS CARRIED OUT BY THE PERSON WHO HAS LEFT? (All employers) 6.4% 7.6% 5.9% 4.9% 4.2%2.9% 68.1% Distributed amongst the remaining team members The manager absorbs more workload Continued by a contractor Other Given to one other person in the organisation Four out of five (80.2%) employers say their teams have to do more with less and only one in five (20.3%) employers say they always replace roles if a member of their team leaves. When roles are not replaced, the majority of employers (68.1%) distribute the work amongst the remaining team members. In some organisations, other managers absorb the workload (7.6%) or they engage contractors (6.4%) (Fig 1). As employers strive to succeed in this difficult business environment, employees are taking on more work. Most people (87.4% in Australia) now report working more than 40 hours per week. Just over three-quarters (77.0%) of all legal employees surveyed reported that they had taken on greater or new responsibilities in their current role compared to a year ago, and just under half (46.4%) said they were not financially rewarded for this increased workload. Discontinued Outsourced Please refer to page 16 to view reference details. australia legal salary & employment insights 2013/14 3

6 44.4% of legal professionals are actively or passively seeking a new role. Employee sentiment The number one thing all active and passive legal job seekers are looking for is an increase in pay 27.2% cited this as the most important consideration when moving jobs. Salary is a motivator to stay on in an organisation too: 44.0% of all legal respondents who were actively or passively looking for roles said that an increase in salary would make them more likely to stay. Legal professionals also reported increased levels of stress. 37.0% of employees claimed that they were more stressed at work than a year ago. According to the Q Hudson Report, a quarter (24.7%) of employers in Australia are seeing increased levels of burnout in their employees. Just under half (44.4%) of all legal professionals are actively or passively seeking a new role. Of those looking to make a move, 57.1% said they were expecting to move within the next six months. Additional important considerations for legal professionals when seeking a new role included: better career opportunities (13.6%), a role they were more interested in (12.8%) and an organisation with a work culture that would make them happy (12.8%) (Fig 2). Fig 2 More pay than I currently have An organisation with a work culture that will make me happy Strong leaders and a manager I respect An organisation with values that I believe in Better working conditions than I currently have More seniority and responsibility than I currently have More educational and training opportunities than I currently have Interestingly, in spite of the current environment and significant employee stress levels, morale is not the major concern of employers. WHICH OF THE FOLLOWING ASPECTS WILL BE MOST IMPORTANT TO YOU WHEN LOOKING FOR YOUR NEXT JOB? Better career opportunities than I currently have A role that I m more interested in Different sector/industry % of respondents Legal employees All employees 4 legal salary & employment insights 2013/14

7 LEGAL PROFESSIONALS IN FOCUS % say they are more positive % say they are more engaged than this time a year ago 37.0% say they are more stressed 26.1% say they feel less loyal to their employer than 12 months ago Only 24.5% of all employers report that their team members have lower morale than a year ago, while 67.3% of legal employees report feeling the same or higher levels of optimism over the same period. Almost half (43.7%) of all legal employees say they are more engaged at work than they were 12 months ago. When employees are working longer and harder and feeling more stressed, it may be possible to reduce the negative effect on their morale. Strategies to achieve this include clearly communicating organisational objectives and plans to staff. People who understand their organisation s strategy and vision are more likely to be engaged and put in discretionary effort to help achieve business objectives. Where they have chosen to take on more work, they may be feeling more stressed but they are also more likely to feel engaged and optimistic. Salary Outlook 2013 The majority of legal employers in Australia and New Zealand (62.0%) plan to award pay increases of 3 4% in Across all organisations surveyed, the main reason cited for giving a pay rise was to retain high performers (57.9%). Just over three-quarters of legal employers (87.7%) said that they would reward all their high performers with pay rises. Of those that would not be doing so, (81.3%) were concerned about losing talent. Will employees be recognised for their hard work in 2013? Hudson s research shows that: 42.3% of all legal employees surveyed believed they deserved a pay rise simply to keep up with the cost of living. Almost two-thirds (63.7%) felt they were either not adequately rewarded for their contribution to the business, or that their high level of performance warranted a pay rise in recognition of this. 43% of legal professionals said they deserved a salary increase because of their own high performance. A little more than a third (35.2%) said an increase was warranted because they had taken on greater or new responsibilities. australia legal salary & employment insights 2013/14 5

8 44.0% of all legal employees actively or passively looking for roles said that an increase in salary would make them more likely to stay. Bonuses Despite the tough environment, 59.1% of all surveyed employers plan to award bonuses in 2013, and the majority will link this to individual (51.9%) or company (40.9%) performance. Employers are also offering a range of benefits as part of the package. After base annual salary, the top three staff benefits and rewards offered by employers are flexible working arrangements (63.0%), financial bonuses (54.8%) and subsidised health benefits (34.6%) (Fig 3). Recognition Formal reward and recognition programs, and informal feedback from managers show employees that their contributions are valued and promote staff satisfaction and loyalty. When rewards are not an option, companies should focus on recognition. This includes acknowledging when a staff member has achieved a great result for a client, surpassed utilisation/ realisation targets, or has overcome a major client challenge. Fig 3 WHAT BENEFITS DO YOU OFFER AS PART OF SALARY/ REWARD PACKAGES TO EMPLOYEES? (All employers) Flexible working arrangements Bonuses Subsidised health benefits Increased superannuation Death/disability insurance Additional leave Income protection insurance Company car Private health insurance Other Reduced work hours Fully paid health benefits % of respondents Note: Figures do not add up to 100% as respondents could select all that applied. 6 legal salary & employment insights 2013/14

9 Despite the tough environment, 87.7% of legal employers said that they would reward their high performers. It makes commercial sense to let employees know they are valued. The benefits most valued by employees in the legal profession are: bonuses (62.0%), increased annual leave greater than the legislated standard of 20 days (45.1%), flexible working arrangements (42.6%), and private health insurance (33.8%) (Fig 4). Benefits All employee survey respondents made a number of suggestions when asked to name a benefit that would appeal to them. Ideas included: company parking, domestic travel allowance, technology/ phone/device allowance or study leave, time in lieu and public transport allowance. Evidently, one size does not fit all. Fig 4 Bonuses Increased annual leave (more than standard 20 days) Flexible working arrangements WHAT BENEFITS WOULD YOU VALUE AS PART OF YOUR SALARY/REWARD PACKAGE? (Legal employees) Private health insurance Increased superannuation Income protection insurance Gym membership Paid maternity leave Car allowances Company car Paid paternity leave Other Death/disability insurance % of respondents Note: Figures do not add up to 100% as respondents could select up to three options. australia legal salary & employment insights 2013/14 7

10 market commentary More and more companies are looking abroad for acquisition targets or merger partners to help them meet their growth aspirations to enter new markets and product lines, find new customers and develop new capabilities. 8 Six of the 11 largest law firms in Australia have merged their domestic operations with foreign firms over the last three years to grow their capacity and presence in international markets. 9 Mid-tier firms could benefit from the influx of global law firms entering the Australian market. 10 Independent unaligned firms are concentrating on Australian transactions and referrals 11 and are perceived by cost-conscious clients to offer quality legal service at competitive rates. 12 Their strength in the marketplace is attracting many top-tier lawyers who specialise in areas specific to the local jurisdiction. Large global and national law firms have been affected by a fierce talent war that has escalated in the past six months. 13 Employees across the board are working longer hours and taking on more work to cover roles that have not been replaced. Most legal employers (85.5% in Australia) report working more than 40 hours per week. 14 Increasingly, legal employees report struggling under the weight of time billing targets, and the pressure to bill more hours. 15 As a consequence employees at all levels are feeling under greater stress. With heightened fee pressure and increased competition for work, law firms are offering clients flat fees and other alternative fee arrangements. 16 This is also putting more pressure on employees to deliver a greater number of projects. Commercial litigators are in short supply due to the fact that generally there is limited movement in this area it is often difficult for litigators to transition into an in-house role, and these lawyers tend to remain in a private practice role where they are happy. Where litigators do make the decision to leave private practice, it is usually to go to the bar. Senior construction lawyers (both front-end and back-end), defendant insurance lawyers, as well as employment lawyers are highly sought after, both for in-house and private practice roles. Demand for these skill-sets is particularly strong in the Brisbane legal market. Legal professionals with expertise in superannuation and life insurance have been highly sought after this year, both for private practice and for in-house roles. This has been largely due to the legislative changes contemplated by Future of Financial Advice (FOFA). 17 Given that the changes will be effective as of 1 July, the demand for this skill set will likely taper off. Private practice firms and companies are looking for mid-level property lawyers. This is particularly true in Sydney where property prices are reaching record highs. 18 Please refer to page 16 to view reference details. 8 legal salary & employment insights 2013/14

11 Demand for lawyers with experience in the energy, resources and corporate sector is therefore declining. Despite miners being prepared to push ahead with existing plans, exploration has been scaled back. 19 China is Australia s biggest export market and the weaker than expected GDP data coming out of the world s second-biggest economy added to concern about the global growth outlook. 20 This is due to the lack of funding for exploration projects in Western Australia, with companies putting these projects on hold due to subdued growth in China over the last quarter. Contract lawyers are providing strategic and tactical support to government legal teams. However, the appetite for contractors is easing for in-house roles due to cost constraints will be a competitive market for job seekers. Salary however, should not be the only driver when making a decision about a role. Candidates should look beyond that to determine what each opportunity could contribute to their career development. Most in demand roles/skills: Commercial litigators Senior construction lawyers (both front-end and back-end) Defendant insurance lawyers Property lawyers Specialists in superannuation and life insurance Please refer to page 16 to view reference details. australia legal salary & employment insights 2013/14 9

12 conclusions Market conditions are tough 2013 continues to be another difficult year. As global economic uncertainty continues, Australia and New Zealand remain relatively sheltered but the challenges of doing business in such an environment change daily. Making the right hire It s clear that companies are cautious about recruiting right now. For organisations that are hiring it s vital to maximise return on investment by choosing the best candidate with the right motivational and cultural fit for the organisation. People who are committed to the company's vision and who fit the culture are those most likely to thrive and help achieve business goals. A compelling attraction proposition It s imperative to develop a clear and effective attraction strategy to ensure a pool of quality candidates for roles. This includes creating an authentic and persuasive Employee Value Proposition. While a competitive base salary is important, many people take other things into account when choosing an employer. Our survey highlighted that better career opportunities, more interesting work, company culture, flexible working arrangements, increased annual leave and meaningful employee reward and recognition programs, along with other factors, can all contribute to making a particular employer desirable. Reward and recognition If employees understand that their efforts will be recognised and rewarded they are more likely to be engaged, work productively and contribute to a positive company culture that can survive an economic slowdown. Remuneration and beyond Our research shows that most people still remain motivated by pay. Consequently, when budgets are tight it makes sense for employers to prioritise spending and ensure that reward and recognition programs incentivise high performance. Employers should look at their overall remuneration strategy. Does it focus on a combination of the value of a role to a company, internal and external relativities and individual performance and potential? With pressure on remuneration budgets, there should be a focus on rewarding those employees in critical roles which may be hard to replace, and roles which may have fallen behind in the market. Hudson recommends that employers review other benefits regularly to ensure that employees value them. Employers should bear in mind that, when times are tough, it may be better to increase base salaries, scale back benefits that are not always highly valued and look at lower-cost ways of boosting staff morale and engagement. It's also important to include regular and honest communication with managers and positive feedback on work or projects as appropriate, and ensure that people are aware of business challenges and objectives. In developing this guide, we aim to provide intelligence to help clients invest their salary dollars effectively. Attending to the needs and wants of your people is always important; in uncertain times it is critical. Please contact us if you would like to know more. Local office contact details are on the back page of this guide. 10 legal salary & employment insights 2013/14

13 salary tables

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15 act NSW QLD VIC WA top tier ANNUAL SALARY 2013 AUD year PQE years PQE years PQE years PQE years PQE years PQE Not SA SA SA SA SA4/Special Counsel Salaried Partner mid tier 0 1 year PQE years PQE years PQE years PQE years PQE years PQE Not SA SA SA SA australia legal salary & employment insights 2013/14 13

16 act NSW QLD VIC WA mid tier (cont.) ANNUAL SALARY 2013 AUD 000 SA4/Special Counsel Salaried Partner BOUTIQUE 0 1 year PQE years PQE years PQE years PQE years PQE years PQE SA SA SA SA4/Special Counsel Salaried Partner in-house (general) 0 1 yrs PAE/PQE yrs PAE/PQE yrs PAE/PQE yrs PAE/PQE yrs PAE/PQE yrs PAE/PQE legal salary & employment insights 2013/14

17 act NSW QLD VIC WA in-house (general) (cont.) ANNUAL SALARY 2013 AUD yrs PAE/PQE Deputy General Counsel General Counsel government act nsw 0 1 yrs PAE/PQE QLD PO yrs PAE/PQE PO yrs PAE/PQE PO yrs PAE/PQE PO yrs PAE/PQE SO yrs PAE/PQE SO yrs PAE/PQE SES SES SES vic VPS VPS SES SES VPS VPS VPS VPS Senior Technical Specialist australia All Government figures above are exclusive of super. Please note: Salary ranges are based on information provided by Hudson clients, candidates and other sources and as a result are approximate guides only. They relate to base salaries including superannuation but do not include things like bonus/incentive schemes/stock options. Further they incorporate placements across both small to medium companies (defined as having a turnover of less than $100 million) and large companies (defined as having a turnover of more than $100 million). Roles marked. For non-government roles, they indicate insufficient placement data to represent the market adequately. legal salary & employment insights 2013/14 15

18 research methodology A total of 4,921 employers and 5,853 candidates within Hudson s Australia and New Zealand database were surveyed from a range of professions with 130 employers and 318 employees from the legal profession. Employers and employees each received distinct survey questions. Percentages don't always total 100% as respondents could select more than one option for certain questions. The questionnaire responses were collected across October and November Respondents were incentivised by a prize draw carried out internally by Hudson. REFERENCES 1 'Shaken, not stirred', The Economist, May , print edition, p The global economy is losing steam 2013, CNN Money, < 3 IMF cuts global growth forecast 2013, CNN Money, < 4 World Economic Outlook (WEO) Hopes, Realities, and Risks 2013, International Monetary Fund, < 5 Australia becomes world's 12 th largest economy 2012, The Hon Wayne Swan MP, Deputy Prime Minister and Treasurer, < aspx?doc=pressreleases/2012/095.htm&pageid=003&min=wms&year=&doctype=0>. 6 April Key Figures, Labour Force Australia 2013, Australian Bureau of Statistics, < 7 Inflation expected to stay benign 2013, The Sydney Morning Herald, < 8 The renaissance in mergers and acquisitions: The surprising lessons of the 2000s 2013, Bain and Company, < Freehills joins race to conquer the world, Financial Review, < 12 Fee earners feature big in law partner equation 2012, Financial Review, < 13 Talent wars lead to high-level musical chairs 2012, Financial Review, < 14 The Hudson Report: Employment Trends, October December 2012, Hudson, < 15 Coping with Stress and Avoiding Burnout: Techniques for Lawyers 2013, The Canadian Bar Association, < 16 Hourly Billing Loses Ground as Pressure for Flat Fees, Other Breaks Outlives Recession, Walny Legal Group, < 17 Future of Financial Advice (FOFA) 2013, PricewaterhouseCoopers, < 18 House prices post biggest rise in three years 2013, ABC News, < 19 WA mining applications up, exploration down 2013, Australian Mining, < 20 Miners hit as China worries rattle shares 2013, Financial review, < All URLs referenced in footnotes were viewed on 16 May legal salary & employment insights 2013/14

19 hudson's thought leadership program As an industry thought leader, Hudson produces a wide variety of white papers, conducts specialist forums and regularly contributes to the media on HR and employment trends. Here s a selection of some of the research we've produced. If you wish to register for Hudson's thought leadership publications, please visit au.hudson.com/thought-leadership The Hudson report: Employment Trends Hudson ICT Industry Leaders Series The Hudson Report is an established employment market trends report, based on in-depth and nationwide research. Released every quarter, the report highlights key hiring trends and provides specialised insights and commentary for core industry segments and professions across APAC. The Hot Topic feature of the report explores current human resource issues impacting businesses and the broader APAC economy. For details, see au.hudson.com/hudson-report Each year, Hudson brings together industry experts across the ICT sector to gain further insight into which factors are influencing operations and to forecast what opportunities and challenges lie ahead. The Hudson ICT Industry Leaders Series 2012/13 focuses on how new world technologies such as Bring Your Own Device (BYOD) and cloud computing are driving changes in the way employees behave, and the impact that this is having on organisations IT departments and the skills required of these employees. To access the report, go to au.hudson.com/ils australia legal salary & employment insights 2013/14 17

20 contact us To discuss the Salary & Employment Insights or your recruitment needs in more detail, please contact your Hudson recruitment consultant or us on AUSTRALIA Adelaide Brisbane Canberra Melbourne Mount Waverley Newcastle Perth Sydney au.hudson.com