If the job market for HR professionals continues to slowly improve, salaries could begin to nudge up this year.

Clare Johnson, manager of HR at recruiter Michael Page, says 2014 finished well, paving the way for growth.

“We are not expecting things to suddenly pick up and be massively buoyant, but do expect turnover to increase in all sectors,” she says. “It has been a good start to the year. There were more jobs in the market in [the first quarter of] 2015 compared with the same period in 2014.”

There has been a strong swing to generalists in recent years during a “significant tightening of the belt” that followed the initial bounce after the global financial crisis, says Lisa Morris, Hays’ senior regional manager in South Australia and the Northern Territory.

“We found that HR teams and functions were either drastically reduced or outsourced,” says Morris. “If they could afford only one position, it came back to being a generalist role.”

However, businesses are now reinvesting in specialist areas. “We’re seeing that begin in contract roles and in a temporary capacity, which is pretty typical as things start to improve.”

Recruitment firm Hudson is also watching this trend. Last year only 45 per cent of the HR roles its Sydney office dealt with were for generalists.

“In previous years, generalists have been above half and towards two-thirds of our roles,” says Matthew Mayoh, Hudson’s associate director of HR. “I can’t see demand for them going much lower than that.”

Longer-term investment

Strong recent demand for learning and development, and organisational development roles is also promising.

“It’s a good sign that some money has been put back into HR salaries,” says Mayoh, who notes that such roles don’t always have an immediate pay-off for employers. “They’re a longer-term investment in a company’s workforce.”

Talent acquisition specialist is one job type that has grown in demand in the last couple of years, especially at larger companies. Mayoh says the increase was driven by a candidate-rich market that meant it was often cheaper for bigger companies to source talent directly rather than use a recruiter.

However, now that the candidate market is contracting and more effort is needed to fill positions, Mayoh expects to see fewer new talent acquisition roles advertised. “I think the surge in talent acquisition specialists is over.”

Johnson describes the market as ‘candidate-rich’, but says there is a shortage of generalists and specialists who are commercially minded – those with strong skills to measure and evaluate the HR function in a business, and understand how it contributes to strategic direction and the bottom line.

“Proof positive,” says Paul Begley, AHRI’s national manager of government and media relations, “that our drive towards increased professionalisation through the new AHRI Practising Certification Program is a response to a real need in the job market for skilled HR professionals.”

“There are a lot of people looking but there’s definitely a skills shortage. We are candidate-rich, job-poor, talent-short,” says Johnson.

In particular, she has noted a scarcity of candidates for mid-level remuneration and benefits specialist jobs paying $90,000-$140,000.

Mayoh believes businesses are starting to fight a little harder to retain talent. “We’re seeing counter-offers entering the market. Employers are catching on to the fact that it’s going to be difficult to replace key roles this year.”

Morris says “it’s not too much of a squeeze” to attract candidates now, but if the contracting market continues for the next six months, the candidate market will begin to tighten. “It’s beginning to be noticeable that talented people are being offered two or more roles,” she says.

Large salary increases are not expected, though. Johnson says rises have typically been quite conservative at about 2-3 per cent, roughly in line with inflation. However, if candidates begin to field more offers, this could creep up.

Across Australia, some markets are more buoyant than others. “NSW is leading the way,” says Morris. “Victoria and South Australia are probably a little static.”

In Western Australia and Queensland, the heavy resources focus means the recent mining industry downturn is having a negative impact on employment while in the ACT, government cuts are still being felt.

This article is an edited version. The full article was first published in the May 2015 issue of HRMonthly magazine as ‘Snakes and ladders’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here.