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Cubiks’ Survey Shows Salary Increases Are Stable

The New Zealand economy has, in the last 12 months, been buoyant enough to sustain salary increases ahead of inflation, the latest Cubiks New Zealand Salary Survey, indicates.

In fact, salary increases for top executives are slightly ahead of last year, and consistently higher than the rate of inflation.

Kevin McBride, country manager for specialist HR consultancy Cubiks, says the survey results appear to indicate that the economy is able to sustain salary increases at this level:

“Salary increases are still running well ahead of inflation and have been for the past five years. This shows no signs of slowing down – so we can assume that organizations must believe they can either afford them or, for competitive advantage, can’t afford not to offer them.”

“Similarly, the contribution that performance-based payments make to these average increases cannot be underestimated. Organisations are monitoring performance closely and, if performance warrants it, an employee’s remuneration is adjusted accordingly,” Mr McBride comments.

However, he warned that as inflation continues to rise, as is predicted, the size of the increases in real terms would be considerably smaller than those seen over the past two years.

Top executives’ base salaries and total remuneration have both increased 5.7% over the past 12 months, compared with a 5.6% increase in base salaries and a 4.4% increase in total remuneration for the 12 months to September 1999. Inflation over the 12 months to September 2000 ran at 3.0% per annum.

General staff base salary increases have remained stable at 4.2% but total remuneration levels are, at 2.4%, lower than inflation.

The survey also shows that the provision of bonus payments to reward high performance continues to be an important area of remuneration management.

Mr McBride, says:

“Performance-based payments are still gradually increasing in popularity and the size of bonuses available, and actual amount paid, have also increased steadily.”

This year, Cubiks also looked at organizations’ flexible staffing practices, with around 85% employing both part-time and temporary staff and 71% employing contractors. A much smaller number (14%) have taken on executive leased staff during the survey period.

The results show that part-time staff enjoy the best work conditions in terms of benefits, leave entitlements and training, while temporary, contract and executive leased staff receive few or no added extras.

More than half of the organizations are also open to job sharing, which is most prevalent in the clerical and administrative area.

The survey, which is carried out twice a year by Cubiks, was first conducted in 1959. Since then both the range and the scope of the survey have expanded year on year, and it now measures the base salary and total remuneration movement of more than 300 positions across 500 contributing organisations.

- Ends -

Notes to the editors

1. For more information, please contact Kevin McBride at Cubiks on +64 4 499 6471 or Claudia Macdonald/Dwight Whitney on +64 9 306 1804.
2. Cubiks provides companies with on-line solutions in the specialist areas of personnel selection, assessment and development, and remuneration.

By taking a consultative approach, we can either tailor our products to fit into a client organisation’s existing HR structures or develop bespoke products to address specific needs. With offices in 14 countries across the globe, we also have the resources and management expertise to co-ordinate all aspects of an out-sourced project.

We enable HR professionals and line managers to make quick, valid and practical people decisions. By providing solutions that are easy to implement commercially focussed and jargon-free, Cubiks allows clients to ensure that their HR processes are globally consistent, cost effective, high quality, and ultimately increase shareholder value.

Formerly PA Consulting Group’s assessment and development business, Cubiks was set up as separate venture company in the PAGroup in May 2000. Much of our consulting takes place in conjunction with other parts of the Group. In this way, Cubiks’ capability can be augmented on client assignments with a range of other skills including IT implementation, project management, strategic human resources consulting and full e-business solutions.

3. PA Consulting Group is a leading management, systems and technology consulting firm, with a unique combination of these capabilities. Established almost 60 years ago, and operating worldwide from over 40 offices in more than 20 countries, PA draws on the knowledge and experience of some 3,400 people, whose skills span the initial generation of ideas and insights all the way through to detailed implementation.

PA builds strategies for the creation and capture of shareholder and customer value, and helps clients accelerate business growth through innovation and the application of technology. PA works with clients to improve performance, mobilize human resources and deliver change effectively, including managing major projects, and designing and implementing enterprise-wide systems and full e-business solutions.

PA focuses on creating benefits for clients rather than merely proposing them, and this focus is supported by an outstanding implementation track record in every major industry and for governments around the world. PA also develops leading-edge technology both for its clients and within its own portfolio of venture companies in areas ranging from software to wireless technology to life sciences.

PA distinguishes itself from its competitors through the range and quality of its people, the depth of its industry insight, its development and use of technology, and also its independence and culture of respect, collaboration and flexibility in working with clients.

We are proud that our clients say “PA makes it happen”.

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