Salary increases thin on the ground this year

Almost two-thirds (64 per cent) of employers will give skilled professionals a pay rise of less than 3 per cent in their next review while 8 per cent will not increase salaries at all, according to the 2018-19 Hays Salary Guide.

Released today (Wednesday 16th May) and based on a survey of more than 486 organisations in New Zealand representing over 181,000 employees, the Guide shows a further 22 per cent will give staff an increase of 3 to 6 per cent. Just 6 per cent will increase by 6 per cent or more.

Compared to their last review, when 5 per cent of employers gave no increases and 10 per cent increased by 6 per cent or above, the findings show that fewer professionals will receive an increase while the value of the increases on offer will also fall.

Employees however have higher expectations than employers for a salary increase. Over two-thirds (69 per cent) say a salary increase is their number one career priority this year. 26 per cent expect an increase of 6 per cent or more. A further 22 per cent expect an increase of between 3 to 6 per cent. At the other end of the scale, 19 per cent do not expect any increase and 33 per cent expect less than 3 per cent.

If their employer doesn’t offer a pay rise, over half (55 per cent) will request one.

“New Zealand’s labour market performed strongly over the past year, characterised by falling unemployment and good job opportunities,” said Jason Walker, Managing Director of Hays in New Zealand.

“Given labour and skills pressure, falling salary intentions seem out of place, yet that’s exactly what we’re seeing. As a result, many workers will see little real difference in their pay packet in the year ahead.

“This is at odds with the importance New Zealand’s skilled professionals now place on a salary increase,” he said.

The Hays Salary Guide also found:

North Island employers are more generous than those in the South, with 7 per cent compared to 2 per cent respectively intending to increase salaries above 6 per cent. In addition, 22 per cent of North Island employers compared to 18 per cent of South Island employers will increase salaries between 3 and 6 per cent;
At the lower level, 63 per cent of North Island employers will increase salaries by up to 3 per cent, compared to 71 per cent in the South. 7 per cent of North Island employers do not intend to give any salary increases, less than the South Island’s 10 per cent;
60 per cent of employers offer flexible salary packaging. Of these, the most common benefits offered to all employees are private health insurance (offered to all employees by 43 per cent of employers), parking (36 per cent), above mandatory superannuation (33 per cent) and bonuses (29 per cent);
71 per cent of employees have access to flexible work practices, 63 per cent receive ongoing learning & development, 51 per cent career progression opportunities, 47 per cent health and wellness programs, 37 per cent over 20 days’ annual leave, 33 per cent payment of their own device usage charges at work and 32 per cent financial support for study.
In the last 12 months, 16 per cent of New Zealanders asked for a pay rise but were declined – a further 22 per cent asked for a pay rise and were successful;
The success of the latter perhaps explains why 55 per cent say they intend to ask for a pay rise in their next review. A further 24 per cent are as yet unsure;
33 per cent of employers say staff turnover has increased in their organisation over the last 12 months;
Business activity increased for 73 per cent of employers in the past 12 months, while 80 per cent expect it to increase in the next 12 months;
34 per cent foresee a strengthening economy in the coming six to 12 months;
53 per cent of employers expect to increase permanent staff levels in the next 12 months, far exceeding the 8 per cent who say they’ll decrease;
Meanwhile 18 per cent expect to increase their use of temporary and contract staff, also exceeding the 11 per cent who anticipate decreasing in this area;
21 per cent of organisations now employ temporary and contract staff on a regular ongoing basis and another 41 per cent employ them for special projects or workloads;
77 per cent of employers are worried that skill shortages will impact the effective operation of their organisation or department in a significant (33 per cent) or minor (44 per cent) way;
The annual Hays Salary Guide is now in its 40th year.

Get your copy of the 2018-19 Hays Salary Guide by visiting www.hays.net.nz/salary, contacting your local Hays office or downloading The Hays Salary Guide 2018 iPhone app from iTunes.

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

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