"The year of the raise" – 95% of insurance employers to increase salaries

A whopping 95% of insurance industry employers plan to increase salaries in their next review, according to recruitment and workforce solutions specialist Hays’ latest salary guide.

The FY23-24 Hays Salary Guide was based on a survey of more than 14,000 employers and professionals. It found that 66% of insurance employers plan to increase salaries above 3%.

“We’re calling this the year of the raise, where the promise of higher salaries reflects the intensity of the skills shortage in today’s jobs market,” said Hays regional director Kathryn Carson. “This year, both the number and value of increases will rise, continuing the upwards trajectory we first noted in last year’s Hays Salary Guide.”

Other key findings:

• Salary is the most critical factor in attracting, rewarding, and retaining employees today. However, employers found that benefits also play a significant role. The top three benefits employers are offering this year are training, ongoing learning, and development and career progression opportunities.
• Insurance professionals will prioritise a pay rise, being able to work flexibly, and learning or developing technical skills in the next 12 months. 

Why are salaries increasing?

The Hays Salary Guide outlined four factors motivating employers to increase salaries in their next review:

• Competition amid a growing skill gap crisis: Many employers have offered higher salaries than planned to attract insurance professionals in response to the skill shortage, with 13% deemed “substantially higher” and 52% “nominally higher”;
   
• The impacts of falling real wages: 85% of employers and employees combined said it is reasonable to expect pay rises to keep up with inflation;
   
• The impact of pay transparency: Many employers are transparent with employees about how salary levels and increases are set to improve fairness and build trust, with 31% being transparent with all employees and 25% with select employees; and
   
• “The great ask”: This year, 65% of insurance professionals plan to ask for a pay rise, up from 58% last year and 45% the year before.

Employer and employee expectations fail to align

Despite the salary boost, insurance employer and employee expectations still fail to align.

The latest Hays Salary Guide found that only 41% of insurance professionals plan to remain with their current employer beyond FY23/24, with another 38% unsure whether they will remain. Those intending to, or considering, changing jobs, pointed to the rising cost-of-living as the top reason, followed by an uncompetitive salary and a lack of promotional opportunities.

 “Many insurance professionals feel undervalued and underpaid. They feel their current salary doesn’t reflect their individual performance,” Carson said.

Hays advised employers to “stand out in the race for talent” by reviewing their benefits and what else they can offer to attract and retain talent, including opportunities for growth, wellbeing days, additional annual leave, improved recognition, work-life balance, or a more positive work environment.

“The recruitment and salary intentions of employers are notable this financial year,” Carson said. “The overall trend suggests that many believe investing in their workforce, such as through salary increases, is key to success.”