Hays NZ on Twitter

Salary increases thin on the ground this year in NZ


New Zealand’s labour market performed strongly over the past year, characterised by falling unemployment and good job opportunities. Permanent and temporary hiring intentions suggest further employment gains and increasing business activity in the year ahead.

However, employers warn that the shortage of highly-skilled professionals could dampen the effective operation of organisations and departments.

Given such labour and skills pressure, falling salary intentions seem out of place. Yet that’s exactly what we’re seeing, with the value of salary increases falling for many employers compared to their last review. As a result, many workers will see little real difference in their pay packet in the year ahead.

When they last reviewed salaries, our 2018-19 Hays Salary Guide shows that 5% of employers in New Zealand gave no increases. Whey they next review, 8% intend to give no increases.

In addition, the value of increases will fall. Two fifths (21%) of employers intend to increase salaries between 3-6% when they next review, down from 23% who increased salaries at this level in their last review. And while 11% increased salaries by 6% or more in their last review, just 6% plan to do so this year.

Instead, 64% intend to raise salaries at the lower level of 3% or less, up from 62% who did so in their last review.

This is at odds with the importance New Zealand’s skilled professionals now place on a salary increase. In fact, our survey results show a pay rise is their number one priority this year and over half of those who plan to look for a new job in the next 12 months cite an uncompetitive salary as a motivating factor.

No wonder over half also plan to request a salary increase if one is not forthcoming.

North Island employer more generous
Our Hays Salary Guide also found that North Island employers are more generous than those in the South, with 7% compared to 2% respectively intending to increase salaries above 6%. In addition, 22% of North Island employers compared to 18% of South Island employers will increase salaries between 3 and 6%.

At the lower level, 63% of North Island employers will increase salaries by up to 3%, compared to 71% in the South. 7% of North Island employers do not intend to give any salary increases, less than the South Island’s 10%.

The Hays Salary Guide is based on a survey of more than 486 organisations in New Zealand representing over 181,000 employees. Get your copy here, contact your local Hays office or download The Hays Salary Guide 2018 iPhone app from iTunes.