Keeping on Top of Climbing Salaries

‍State of Play  

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Unemployment is at a record low (3.2%) and the cost of living is soaring. Whilst there is some welcome news of the borders reopening, which will enable our migrant and working holidaymakers arrival, this by no means offers a quick fix. Other factors compounding the issue include the living/minimum wage increase, plus after 2 years of not being able to travel easily, the Kiwi exodus for extended holidays over winter, migration to Australia (and beyond) alongside delayed OE’s. 

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Impact on Businesses  

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Employers face continued pressure on wage costs and candidates are being approached and often have multiple opportunities they are considering. Across the disciplines we recruit, Cultivate are seeing salaries on average move 5 – 10% or more and the expectation from candidates to obtain a strong salary increase to make a move is a big motivator. As an example, Seek NZ salary data (based on roles advertised on site) saw a shift of 4.5% YoY for Business Support roles, with a number of role types on average seeing a 6-7% lift. The acute shortages underpin the increase in salary growth, resulting in higher costs for businesses. Outside of competition locally, Kiwi’s are a talented bunch and may opt to take their skills overseas including many of our young people.   

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Warm Welcome to Working Holidaymakers and Visa-Holders

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The good news for our working holidaymakers looking to make a home in NZ either short or long term, our hourly rates and salaries are more attractive compared to pre-pandemic. Prior to Covid, working holidaymakers accounted for about 50,000 of international visitors each year.  Just under 60,000 visas were granted between March 2019 – March 2020 and 19,500 have been issued new visas, if they were unable to come to NZ, and they’ll now have until mid September 2022 to arrive. NZ typically has one of the highest rates of migration in the OECD, so these workers will add a much needed boost to our workforce and economy.  

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Candidate Drivers

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We know money is still a big driving force behind a candidate’s decision alongside other factors, but hiking up a salary is not always an available option for businesses. Seek’s latest Laws of Attraction data showcases remuneration, career progression and work-life balance as the dominant drivers from over 4500 candidates surveyed across the country. 

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So what should you do? 

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Review your salary bandings on current roles

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• Are they fit for the current market? (here and now, not 2 years ago)
• Seek council/feedback where market rates are sitting, so you know what it will take to retain your team or attract new incumbents

Have a good look at each member of your team

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• Who’s at risk of moving
• Don’t be assumptive, take time to connect and really understand what they are driving towards this year
• Have a clear plan that is fit for each person to avoid them thinking they need to find that elsewhere (promotions, secondments etc.)

Suspect a team member is thinking of travel in 2022?

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• Front foot the conversation and create space for it
• Think about offering a career break, sabbatical or if do-able an opportunity to work from overseas

Can’t move north on salary?

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• Consider what benefits and rewards are on offer – insurances, variable pay or incentives
• WFH, hybrid and remote opportunities
• Flexibility (glide time etc.)
• Wellbeing program/support
• Career progression and profile and showcase what’s possible for them
• Understand what they value and tailor what you can offer  
• Ensure you have a strong and compelling value proposition

Experiencing turnover already?

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• Make sure at a minimum, exit interviews are completed to better understand why people are voting with a move
• Address learnings and prepare and act like people are thinking about leaving so you’re ahead of the curve, not surprised by a resignation      
• Get prepared with a counter offer plan – if your top performing employees consider leaving due to more $$$ and new role, what would your come back be to retain them? How much more are you willing to pay to keep them?

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What is evident in the current market is no role discipline is off limits, with skilled or unskilled workers in demand.  In a time where employees may be experiencing burnout and feeling under-valued and influenced by the ‘great resignation’ phenomenon, what you do now will help you retain your people and present clear value to those considering joining your business. 

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If you are wanting to benchmark where salaries are sitting in this rapidly evolving market, please click here or give us a call on 0508 CULTIVATE

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