Benchmarking Remuneration in Local Government - Strategies for Attraction and Retention

Australia’s local governments are at a critical inflection point, where workforce strategy must adapt to increasing complexity, heightened community expectations, and evolving talent demands. As councils plan for future capability and service delivery, remuneration plays a pivotal role in enabling transformation. A benchmarked remuneration review isn’t just a compliance activity; it’s a strategic tool that informs equitable pay structures, supports workforce planning, and builds the foundations for sustainable attraction and retention.

Drawing on insights from McArthur Talent Architects’ 2024–25 National Local Government Remuneration Survey, councils are being encouraged to take a forward-thinking approach to how they position, reward and retain their people in an increasingly competitive environment.

Why Competitive Remuneration Matters for Local Councils

Competitive and equitable remuneration frameworks are emerging as essential levers for councils seeking to sustain a capable and future-ready workforce. Findings from McArthur Talent Architects' latest survey highlight that:

• Leadership Salary Shifts: Average salaries for CEOs in Category 1 councils rose by 4.3% compared to the previous year, reflecting heightened competition for executive leadership talent.
• Management Pay Trends: Middle management roles experienced a more modest increase of 2.1%, underlining the need for nuanced, tier-specific workforce planning.
• Recruitment and Retention Priorities: The 2024–25 survey revealed that workforce retention is now a strategic concern, with salary benchmarking and flexible conditions at the core of effective attraction strategies.

These insights underscore the imperative for councils to design remuneration strategies that are agile, market-informed, and aligned with evolving workforce expectations.

What Is a Benchmarked Remuneration Review?

A benchmarked remuneration review offers councils a strategic diagnostic tool, comparing internal salary structures against sector-wide, real-time data from comparable organisations. It considers:

• Council size, financial profile, and geographic setting
• Occupational disciplines, job families, and levels of responsibility
• Broader economic and workforce trends influencing market rates

By applying a benchmarking lens, councils can ensure they are not only competitive externally but also equitable and defensible internally.

Strategic Benefits of Regular Remuneration Benchmarking

A well-executed remuneration review strengthens workforce strategies across multiple dimensions:

• Market Relevance: Ensures councils remain attractive employers in a shifting public sector landscape.
• Internal Equity and Transparency: Builds a culture of trust and reinforces organisational values.
• Proactive Risk Management: Helps councils manage compliance obligations and reputational risk.
• Informed Workforce Planning: Provides critical data to support future workforce capability and succession planning.
• Advancing Diversity and Inclusion: Enables measurement and improvement of gender pay equity and broader inclusion targets.

Embedding remuneration benchmarking into workforce planning cycles positions councils to be more adaptive, resilient, and people-centric.

Insights from the 2024–25 McArthur National Survey

• Salary Growth Disparities: While executive salaries continue to climb, middle management salary compression is creating emerging retention risks.
• Workforce Flexibility Expectations: Councils offering flexible remuneration packages, including non-monetary benefits, are seeing stronger retention outcomes.
• Diversity Metrics Improving: The proportion of women in senior leadership roles increased by 3.8% year-on-year, reflecting progressive shifts in council leadership demographics.

Together, these trends signal the need for councils to integrate forward-thinking remuneration practices into their broader workforce strategies.

Why Partner with McArthur Talent Architects?

McArthur Talent Architects brings:

• The nation’s most comprehensive local government remuneration database.
• Bespoke benchmarking services designed to fit each council’s strategic context.
• Independent, evidence-based analysis conducted by local government specialists.
• Practical, outcome-focused recommendations that translate insights into action.

We partner with councils to create robust remuneration frameworks that not only address today’s workforce challenges but also prepare for tomorrow’s opportunities.

Strengthen Your Workforce Strategy Today

As local governments navigate a period of significant change, those who align remuneration strategy with broader organisational goals will be best placed to succeed. Benchmarking remuneration is a critical step towards building sustainable, engaged, and future-ready workforces.

Connect with McArthur Talent Architects to explore how a benchmarked remuneration review can support your council's long-term workforce strategy.