Labour statistics are some of the most important bits of information for countries around the world, providing insights into the nature of work, society, and economy. Payroll information is particularly valuable in understanding who is employed, how much people earn, and how this differs based on where they work and the hours they work.
For instance, using payroll data we can see that the average worker in Australia earns $AUD1,400 per week ($US900), which goes up to $AUD1,800 ($US1,200) for people who work full-time. The gap between men and women is around $AUD500 ($USD300) per week – or around 29% – for all workers. The gap for full-time workers is now at a record low, around $AUD250 ($USD150) or around 13%.
When we break this down hourly, we see that men in Australia earn an average of $AUD44.50 ($USD30) per hour, compared with $AUD40.20 ($USD27) for women. The difference is greatest for Community and personal service workers (19%) and Managers (16%), and lowest for Machinery operators and drivers (10%).
When you order employees from highest paid to lowest paid – to draw out distributional insights – payroll data tells us that men are more likely to be high earners, while a higher proportion of women (who are more likely to work part-time) fall in the bottom quartile of earners.
Payroll data has traditionally been provided to national statistical organisations, like the Australian Bureau of Statistics (ABS), through surveys. Now, payroll data is increasingly being captured in real-time using regular business processes, meaning it can become even more powerful for understanding what’s happening with employment, businesses, and the economy.
During 2019-20, employers in Australia began reporting payroll data each pay period to the Australian Taxation Office (ATO) through Single Touch Payroll reporting. In addition to streamlining tax and other government reporting in Australia, the ABS has been able to access weekly snapshots of payroll reporting to produce statistics to understand changes in the labour market during the pandemic.
Since then, the ABS has produced weekly information, which in close to real-time showed both the impacts from pandemic lockdowns and other trading restrictions, but also the speed of recovery from such restrictions. Using comprehensive information on more than 10 million employee jobs in Australia, based on every single payroll process in every pay period, made it possible to see which industries were faring better than others during the unprecedented shocks of the pandemic. It has also helped us to gauge the relative health of regional labour markets across the country.
During 2020 and 2021, this enabled governments to look at the impacts of different lockdown approaches used in different parts of the country, or even within different parts of the same city. For example, when the COVID Delta variant hit Sydney, it showed how the job losses in the Eastern suburbs compared with the Western suburbs.
During 2022 and 2023, it provided important weekly insights into an incredibly and increasingly tight Australian labour market. This was a time when job vacancies rose to almost half a million (around double what they had been before the pandemic) and the unemployment rate fell to a 50-year low of 3.5%, well below the roughly 5% it had been at the end 2019.
Payroll data showed the fast-growing jobs in Health care and social assistance and other high growth industries continuing over 2022 and 2023, while other industries struggled with labour shortages and supply-chain disruptions.
An interesting question I often get from employers is how they can make greater use of payroll data – both their own data and the official statistics on the ABS website. It shows how much more data-driven modern businesses have become and how much more data conscious HR professionals have become. It also shows how much untapped potential there still is with this data.
I ask them, how often do you benchmark your data against official statistics (payroll statistics but also statistics from the Labour Force Survey and Census)? Do you regularly compare yourself with your industry and with other employers like yourself?
When you graph it out, do you look at where your trends are similar or different?
How does the composition of your workforce look? Do you have more or less of groups than similar employers? What does that tell you about your workforce planning, but also how well can customers, partners or potential employees see themselves in the make-up of your organisation?
How does your pay compare with similar employers? How does the pay compare between groups of your employees – especially between women and men?
What is happening in the regions that you operate in? In the regions where your employees live?
Payroll data is a powerful asset for everyone to answer these important questions. It’s time to unleash its potential.
