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Pay rises forecast for the best workers

Skills shortages are expected to plague employers over the next 12 months and pay rises are on the way for top performing staff as companies focus on retaining their best talent, according to a corporate sector survey.The Salary & Employment Forecast, conducted by recruitment consultancy Michael Page International, canvassed more than 2500 hiring managers in New Zealand.It found demand for skilled staff was exceeding supply in a number of areas, including marketing, sales, finance and supply chain management.Almost 50 per cent of respondents were anticipating professional skills shortages over the coming year.

Michael Page New Zealand national director Pete Macauley said options for career growth had been limited during the economic downturn, making many professionals happy to retain their jobs.”We are now starting to see more companies in the position to re-invest in their talent with career progression opportunities,” Macauley said.”This investment, coupled with nervousness around global conditions and the perception that the job market is flat, means many top performers are not proactively looking for new roles, or are simply unwilling to move.”This is limiting the flow of new talent on to the job market.”The survey also suggests the skills shortage is placing upward pressure on wages, with 69 per cent of employers believing the situation would cause salaries to rise at above the inflation rate over the next year.The Reserve Bank´s latest quarterly survey of expectations projected inflation to drop back to 2.86 per cent in two-years time from the 5.3 per cent it reached in June, of which 2 percentage points could be attributed to the GST increase last October.

For all New Zealanders, the average wage increase was just 1.7 per cent last year, according to Statistics New Zealand figures.The Reserve Bank survey found wage inflation for the country was expected to be 2.9 per cent over the coming year.”One reason salary pressures are growing is that employers are struggling to attract new talent into their business,” said Macauley.”Companies are offering increasingly competitive salaries and bonus incentives in an effort to attract the talented pool of professionals that are hesitant to move in the current environment.”The survey showed 71 per cent of employers would be awarding salary increases based on performance in order to ensure that their most valuable staff were retained.

“Notably, only 6 per cent of survey respondents will be giving the same increase as standard across the business,” the report said.Macauley said that for businesses to attract and retain staff, they needed to complement financial rewards with opportunities for career growth and development.In the finance industry, average salary increases of 4 to 5 per cent were expected, the survey said, and higher for professionals with skills in high demand – such as underwriting, risk and compliance.”There will be growing demand for skills in business analysis, tax and audit and this will result in numerous employment prospects,” it said.In sales and marketing, wage increases of 3 to 5 per cent were expected, with bigger rises anticipated for the skills in highest demand, including business development and brand marketing.

EMPLOYMENT FORECAST

* 49 per cent of white collar employers believe skills shortages will continue over the next 12 months.
* 69 per cent predict that wages growth will outrun the inflation rate.
* 71 per cent will award salary increases based on performance to ensure they retain the most valuable staff.

Source: Salary & Employment Forecast, Michael Page International -http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10759505

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