Property companies cut jobs given difficult market conditions

Australian property companies have been cutting staff numbers as part of austerity measures in response to a slowing economy, according to a report by human resources group Adviev.

The report found 59% of the 113 surveyed property companies had introduced austerity measures, with most reducing head count by a median of 10% and some by up to 20% over the last six months.

Staff at property development and property finance companies were hardest hit by austerity measures, while property consultants and funds management staff fared the best.

Adviev managing director Rita Avdiev, who has been tracking property company employment since 1987, says a lack of liquidity in the market was affecting property finance and development.

“A new reality has set in as the slowing economy continues to worry companies in the property industry.”

“The forecast slowdown in the resources sector has become a concern and measures are being taken to ride out falling business conditions.”

A range of austerity measures was introduced, including cutting annual pay rises to a median of 3% for senior staff and 3.5% for others.

The cuts, aimed at reducing cost of operations and focusing on corporate expenditure, also included reducing travel expenditure, forcing people to take outstanding leave and axing business or division operations and reducing benefits.

The report found short-term incentives, usually paid in the form of performance bonuses, have remained stable for 59% of companies, with 22% increasing incentives and 19% decreasing them.

The average short-term incentive paid was 18% of total fixed remuneration.

Short-term incentives are forecast to drop next year, while overall median remuneration increases by 3.6%.