Employees would move for better pay, economists say they may have to wait
Better pay would lure six out of 10 employees to leave their current job, says a survey by recruitment company Hudson but economists remain sceptical that conditions are favourable for pay increases.
Hudson surveyed 5,003 employers and 5,701 employees in Australia and New Zealand. Of employees surveyed across New Zealand and Australia 58.2 percent say higher remuneration would see them leave their current workplace, while 71 percent of employers said they intended to increase wages in line with the consumer price index.
A more mobile labour market, with jobseekers confident they can be employed, puts pressure on employers for wage increases, says the Hudson report. However, despite employers reporting skill shortages, New Zealand unemployment remains at a pre-recession high of 6.2 percent.
"There is still high unemployment by historical standards," Council of Trade Union economist Bill Rosenberg told BusinessDesk. "So there's a lot more work to be done."
Labour scarcity should prompt employers to increase wages to attract and keep staff, but this was yet to be truly seen outside of Christchurch where construction worker shortages were leading a rise in pay, Rosenberg said.
"It's not enough to say you've matched cost of living, it is time for real wage growth now," Rosenberg said.
Last week's Westpac McDermott Miller Employment Confidence Index showed jobseekers had growing optimism when it came to finding a job, reaching the second highest level in the past two years. The New Zealand Institute of Economic Research Quarterly Survey of Business Opinion said that employers were finding labour increasingly hard to find, particularly skilled workers.
The Hudson report says these key economic indicators should force employers to raise remuneration.
"The labour market is starting to have movement but it's still a long way from being red hot," said ANZ New Zealand chief economist Cameron Bagrie. "It's a bit of horse before the cart in terms of wage rises, you've got to get the productivity to match before the wage gains."
While there is a risk of workers migrating in search of better pay packets, increasingly the New Zealand economy held more promise, Bagrie said.
"People want to come here," he said. "The economic story here is more robust than anywhere, than in Australia, and we are seeing a turnaround from the exodus we saw."
Skill shortages were becoming a problem, particularly in construction, and that increased the pressure for wage growth, Bagrie said.