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‘Sedate’ pay rises of sub-three per cent ahead for most

‘Sedate’ pay rises of sub-three per cent ahead for most Kiwi workers

Sixty-six per cent of employers will give their staff a pay rise of up to three per cent in their next review, with a further 22 per cent set to award between three and six per cent.

But according to the annual Hays Salary Guide, released today (Thursday 1st June), five per cent of employers will not increase salaries at all. At the other end of the scale, seven per cent will increase salaries by more than six per cent.

Both these figures represent a slight drop over the last 12 months, from 10 per cent and 11 per cent respectively, suggesting employers, as a group, are bringing their salary intentions into line.

The Hays Salary Guide is based on a survey of more than 500 organisations in New Zealand, representing almost 187,000 employees, as well as placements made by the recruiter. It shows that employers have a positive outlook yet remain cautious when it comes to salaries.

“Employers tell us they expect business activity to rise and plan to increase permanent and temporary headcount, yet they remain cautious on the salary front,” says Jason Walker, Managing Director of Hays in New Zealand.

“At the same time, candidates are aware of the improved economy and the job opportunities out there and are actively seeking a new role. Add snowballing skill shortages and such sedate salary rises seem at odds with the trends.”

Other findings from the Hays Salary Guide include:

• Business activity increased for 75% of employers in the past 12 months, while four in five (81%) expect business activity to increase in the year ahead;

• 53% foresee a strengthening economy in the coming six to 12 months;

• 48% expect to increase permanent staff levels, far exceeding the 9% who say they’ll decrease;

• Meanwhile 20% expect to increase their use of temporary and contract staff, also exceeding the 8% who anticipate decreasing in this area;

• 21% now employ temporary and contract staff on a regular ongoing basis and another 46% employ them for special projects or workloads;

• 28% of employers say staff turnover increased in their organisation over the past year;

• 80% of employers, compared to 74% last year, are worried that skill shortages will impact the effective operation of their organisation or department in a significant (37%) or minor (43%) way;

• 63% of employers offer flexible salary packaging. Of these, the most common benefits offered to all employees are private health insurance (offered by 43% of employers), parking (39%), above mandatory superannuation (31%), bonuses (26%) and salary sacrifice (20%);

• 72% of employees have access to flexible work practices, 63% receive ongoing learning & development, 44% health and wellness programs, 42% career progression opportunities, 35% over 20 days’ annual leave and 32% financial support for study.

“With sedate salary growth ahead, many New Zealand skilled professionals are in for a shock,” says Jason. “For some it will be a good surprise though, since one quarter of employees surveyed don’t expect any salary increase in their next review – far above the 5% of employers who say they will not offer salary increases.

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“Of those who do anticipate an increase, their expectations are high; 16% expect a 6% increase or more, meaning a significant portion will be disappointed. This disappointment will no doubt be similar to that experienced by the 14% of people who asked for a pay rise last year but were declined.

“But a further 18% asked for a pay rise and were successful, which perhaps explains why 54% say they intend to ask for a pay rise in their next review. A further 22% are as yet unsure. As the old adage says, fortune favours the brave.”

Get your copy of the 2017 Hays Salary Guide by visiting www.hays.net.nz/salary, contacting your local Hays office or downloading The Hays Salary Guide 2017 iPhone app from iTunes.

Hays, the world’s leading recruiting experts in qualified, professional and skilled people.

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