Big salary hikes a thing of the past – Mercer survey

Guaranteed annual pay hikes are becoming a thing of the past, according to a fresh salary survey.

Mercer’s New Zealand Total Remuneration Survey of 190 organisations reveals the average increase for New Zealand pay packets was 3.2% in the last year.

That is only slightly up from the average salary movement of 3% for 2011.

A senior associate at Mercer's talent consultancy, Sarah Barnaby, says some industries are offering much greater pay increases to retain talent, but the days of hefty pay package increases for all Kiwis are well and truly over.

“Employees should not expect pay rises of 5% or more – as seen before the recession,” Ms Barnaby says.

“In fact, 48% of organisations are giving staff less than a 3% pay rise and have no plans to change this.”

The biggest salary hikes were given to project engineers, awarded an average salary increase of 9% this year, compared to 3.2% last year.

Administrative and frontline customer service roles are now getting average pay rises of 5.1%, up from 3.5% in 2011.

But senior managers saw their increases slip to 1.9% from 2.5% the year earlier.

Auckland has been knocked off the top spot for salary hikes by region, rising by 3% this year compared to 3.8% last year.

Christchurch workers had the best result, with average pay rises soaring to 5.8% from 2% in 2011.

Wellington workers have the lowest average increases in the country at 2.8%, while other regional areas are slightly above the national median at 3.5%.

Christchurch residents working on the city’s rebuild are in a prime position to keep getting significant remuneration packages, Ms Barnaby says, as demand for labour has increased pressure on salary budgets for critical jobs, such as those in construction and engineering.

Businesses on limited payroll budgets will need to look for alternative ways to engage and retain top talent and target the increases towards high performers and areas of skill shortages in the business, Ms Barnaby says.

“Employers need to understand which benefits are highly valued by employees, rather than what they, as an organisation, view as important or desirable to maintain an engaged workforce.”