In two recent posts I looked at aspects of current Australian professional salaries.
The overall median starting salary for new US law graduates was $US62,000, well above the Australian equivalent of $A42,000. I must say that the size of the gap came as a surprise.
Compared to the overall median starting salary of $62,000, the law firm private practice median was higher — $95,000, an increase of $10,000 over that for the Class of 2005. Medians for jobs in government and as judicial clerks increased modestly but remained considerably lower, at $48,000 and $46,500, respectively. The median for public interest jobs remained at $40,000. The higher median in private practice notwithstanding, for all full-time salaries reported, salaries of $55,000 or less slightly outnumbered salaries of more than $75,000.
Interestingly, given reports of some starting salaries in top tier firms, just 14 per cent of salaries were either $135,000 or $145,000.
Another perspective on US graduate starting salaries can be obtained by comparing them with average salaries in the Australian top-tier firms for those with five year's experience: $A96,000 in Brisbane, $A110,000 in Perth, $A120,000 in Melbourne and $A125,000 in Sydney. Again the comparison draws out the differences in salary levels between the two countries.
All this raises an interesting challenge for Australian firms, one not unique to law. How, in an increasingly globalised market for professional staff, do you retain your best people when they can earn more elsewhere?
This is not a small issue. According to a 2005 Australian Senate inquiry, there are now more than 750,000 Australians living outside the country, many highly educated.
An Australian Bureau of Statistics study found that the number of long-term and permanent departures of Australian residents had increased considerably over the 20 years to 2005.
In the 12 months to December 2005, there were 158,000 departures by Australian residents for an intended period of 12 months or more. This was more than twice the number of Australian residents who departed in 1985 (69,600).
In 2005, almost two-thirds (64%) of all departures (or 101,000) were to OECD countries. The age profile of Australian residents departing for a period of 12 months or more in 2005 differed from that of the overall Australian population. Most noticeable was the peak in the 25–29 years and the 30–34 years age-groups. One-third (34%) of all departures were of people aged in these groups, yet people aged 25–34 years made up only 14% of the Australian resident population.
This trend has continued since 2005. So far, Australia has had a net brain gain with skilled migration offsetting Australian emigration. However, this is small consolation to individual firms struggling to recruit and retain good people.