Western Bay workers wanting a pay rise this year may be out of luck - but experts say employers will still find a way to reward and keep top performers.
While job website Seek reports the annual average salary package nationally has increased by $619 since September, Tauranga business and employment experts say bosses here are not rushing to give raises yet.
Their comments come amid a special focus on Tauranga salaries and wages in today's Bay of Plenty Times Weekend.
Phill van Syp, of 1st Call Recruitment, said companies were still coming out of the recession and workers holding out for a pay rise could be waiting another year.
"I don't see a huge change [in pay], I really don't. Most companies are trying to recoup any damage that was done over the last few years."
Ian Chitty, managing director of Tauranga's Personnel Resources/Temp Resources, agreed across-the-board pay rises were unlikely.
"Based on our view of the current environment, I wouldn't think there's going to be major increases this year.
"My prediction for 2011 is just a very gradual economic recovery and, as a result, I would think wage rates would stay fairly constant."
Instead of salary increases, bonuses and incentives were likely to become more common, he said. If workers wanted more money, they would have to prove their worth.
"For management positions, I would think if there's any likely increase in payment it's likely to be performance related," Mr Chitty said.
"Employee development is probably where companies will be spending their money. They will be targeting high achievers and giving them professional development."
Tauranga Chamber of Commerce chief executive Max Mason said: "The local economy is very patchy, so although a lot of businesses won't be able to afford to provide their staff with a pay rise, many will.
"There are a lot of staff employed by government agencies, [such as] schools, and police, who are more likely to get increases. We mustn't lose sight of the fact that there are businesses out there that are trucking along just fine and their staff will get pay increases."
Mr Mason said low inflation also meant cost-of-living increases were lower than previously.
Mr van Syp said employers always wanted to retain good staff. "If they have the opportunity to hold on to a good performer, employers will do what they can within their means."
Performance-based incentives could be a win-win for employers and staff.
"Put it on the employer - if your performance hits a certain target, how can you get rewarded for it? I don't think I would be unimpressed if an employee said that to me."
Helen Souness, senior executive at Seek, said companies that wanted to keep valuable staff members needed to review the market rates and adjust salaries accordingly.
She encouraged companies that could not afford pay rises to offer non-financial benefits such as flexi-time.
Tauranga still lags behind other regions when it comes to pay. The mean household income is $53,099 - 8.6 per cent lower than the national mean of $59,000.
According to Seek, the average salary package being offered in the Bay of Plenty at the end of last year was $59,604 - almost $20,000 less than the national average of $69,140, and 10th out of 15 regions. Only Tasman, Otago, Manawatu, Hawke's Bay and Marlborough were worse payers.
Mr van Syp said $60,000 was "not an average in Tauranga". The Seek figures were likely skewed by one or two high-paying jobs on offer.
"People come down from Auckland and take pay drops to get into the area, because of the lifestyle. We have huge lifestyle aspects - that is worth $10,000.
"But lifestyle is only going to carry us for so long ... Soon we are going to have to start paying if we want to be a proper city."
Mr van Syp said Tauranga lacked the "huge industry" which created big paying jobs. But as the city developed, that would change.
"There's a lot of things happening in the Bay that will bring a lot of money. With big industry comes the push for people to get their hands on good staff, because they will all go to the good ones.
"But until industry takes off, we are going to struggle."
Priority One chief executive Andrew Coker said "$10 Tauranga" was a myth.
"The perception may be there, the fact is different. We have seen quite a climb in average household incomes in the Western Bay of Plenty in the last couple of years. We are above the national average now."
But Tauranga still lagged behind Auckland and Wellington on pay.
"The key reason for that is a high fixed-income demographic here, retired people, and a large number of orchard workers and horticultural sector who are probably lower paid," Mr Coker said.
"If you look at the other areas of employment [such as ] IT and professional services, we are up there. Increasingly, employers [in Tauranga] are prepared to pay more to make sure [good staff] are retained."
Mr Chitty said Tauranga salaries were comparable with Hamilton.
"In Tauranga, executive salaries are more likely to have a bigger bonus component or a risk component."
But money wasn't everything. The main reason for changing jobs was the environment and the culture. "They are looking for a sense of being valued, as opposed to a dramatic pay increase."
Seek expects a high level of "job churn" in 2011, with 70 per cent of Kiwis looking for new opportunities.
But people are more likely to stay in their jobs in Tauranga.
"There's definitely opportunities with another company if your company is not doing well and someone else is," Mr van Syp said.
"But I would always encourage people to look for the opportunities within the company before looking elsewhere."
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