Salaries saw 5.4% average increase in past year - study

According to misco's 2023/2024 Salaries and Benefits Report, the past year witnessed significant increases in salaries across all sectors in Malta, with an average rise of 5.4%.

Sales and marketing positions saw the highest average increase at 6.7%, followed by IT positions (6.6%), finance positions (5.3%), and positions in legal and compliance (4.4%).

“Our Salaries and Benefits Report continues to assist professionals in establishing appropriate compensation levels for their workforce," Joanne Bondin, Director at misco, said.

"The report covers 132 job categories including management, executive, clerical, and technical positions across diverse companies. Most importantly, the report’s primary use is for management to align their compensation strategy with market trends and offerings in order to attract, retain, and motivate employees."

According to the annual report, based on four months of extensive research into compensation packages across various industries in Malta, employers have been offering competitive wages to attract and retain talent.

“Employers seem willing to pay competitive wages to attract and retain talent especially when finding resources is more challenging,” explains Ms Bondin.

“This rapid wage growth can cause inflationary pressure and trigger a cycle where rising wages push up production costs for businesses. This, in turn, leads to higher prices for goods and services, prompting workers to demand even higher wages, and businesses respond by raising prices again to cover their increased labour expenses.”

“Within this scenario, one would expect companies to cut down on expenses and recruiting however, every sector continues to experience a lack of available talent. This shortage has made organisations increase salary packages, offer more benefits and go to extraordinary lengths to offer flexibility and retain their employees, which in turn is bolstering inflation,” she added.

In fact, the misco report highlights how trends in employment benefits have also evolved and whilst health insurance payouts decreased by 21%, car allowance benefits increased by 20%, life and personal accident benefits surged by 40% and communication benefits payouts saw a notable 19% increase.

As with previous editions, misco’s Salaries and Benefits Report also includes misco’s annual Survey on HR Developments in Malta, now in its 10th edition and conducted once again in partnership with the Malta Employers Association.

“This report continues to showcase the evolution of the HR function in Malta and the insights it offers into the employment landscape are helping HR practitioners and company leaders understand better the primary challenges and issues confronting businesses,” added Ms Bondin.

According to this report’s findings, 75% of the survey participants noted that their businesses are still grappling with the primary challenge of salary demands as well as other challenges such as the scarcity of experienced and qualified personnel and a lack of job applications.

“These observations confirm trends observed in previous years, reaffirming that the pressure to retain staff remains a complex issue encompassing talent availability, compensation, and the search for individuals possessing the necessary skills and qualifications.”

Interestingly, a notable change has been observed in the perceived primary strategic goals for the HR department with most organizations (75%) now perceiving the HR function as one that offers support to the broader leadership team in overseeing their workforce, rather than solely focusing on staff retention.

The HR report also identified the primary challenges faced by HR departments namely establishing a performance management system (45%) and the perception that management still undervalues HR's potential (42%). Interestingly, there's been a notable drop (19%) in mentions of resource shortages, indicating HR's growing role within organizations compared to the previous year.

Notably, some organizations reported experiencing higher staff turnover (36%), prompting an increased reliance on foreign workers and improved compensation packages. The utilization of third-country nationals in fact saw a surge in 2023, leading to a reduction in the recruitment of Maltese nationals compared to the previous year.

Queries about this report may be sent to [email protected]