Employee salary expectations are a growing source of tension with employers and almost three-quarters of people are thinking about leaving their jobs this year, according to a recruitment industry study.
Recruitment specialist Hudson found nearly seven out of 10 staff were considering moving jobs and that two-thirds of employers were worried about losing high-performers.
Hudson New Zealand executive general manager Roman Rogers said employers were under pressure to simultaneously improve the quality of those they hired and control the cost.
Employers needed valuable employees to take the business forward but not at any cost, he said.
"Facing the tension of trying to do more with less is especially difficult when salary is the top driver for 36 per cent of employees, with many believing that it will be easy, or very easy, to find a similar job with comparable pay and conditions."
More than 10,000 employers and employees in New Zealand and Australia were interviewed for the report.
About six out of 10 employees felt they deserved a pay rise this year and nearly half of hiring managers reported that the salary expectations of preferred candidates exceeded their budget.
"In challenging times, businesses can't afford to compromise on investing in their people, but at the same time they face a dilemma with corporate growth rates lagging employees' heightened salary expectations," said Rogers.
"We suggest they fine-tune their recruitment strategies to find and retain high-performers who can make the biggest difference to the bottom line."
A skills shortage was intensifying competition for the most talented candidates, with 46 per cent of employers finding it harder last year to secure the right candidates, particularly for senior strategic and managerial roles.
Budgets were increased by 43 per cent of hiring managers to secure the best candidate, with the others settling for their second choice.
To help address the gap between rising salaries and slowing profit growth, organisations needed to adjust their approach to recruiting people to ensure they got the best performers.
"Much recruitment is cost-driven and much is compromised by time constraints, yet poor hires can cause untold damage in terms of culture, morale, productivity and profits."
Organisations needed to identify high achievers by broadening their approach from traditional methods of selection that focused on technical qualifications and experience, he said.
Candidates' motivational and behavioural attributes had been shown to be more accurate indicators of performance.
A cost-driven approach and corner-cutting had led to mistakes, and about a third of organisations said that in hindsight they would have done more to assess candidates' abilities to ensure the value of their investment was realised, Hudson said.
Organisations also needed to understand priorities in terms of the harder-to-fill strategic roles that help take an organisation forward, and the critical and core roles that keep it functioning on a day-to-day basis.
A more liquid workforce was both a threat and an opportunity for employers, Rogers said.
"This is a great time for organisations to evolve their practices to extract the most value from their teams. There's also an opportunity for smart employers to think beyond just the salary and offer attractive, tailored remuneration packages to individual employees."
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* Seven out of 10 staff are thinking about moving jobs.
* Nearly 28 per cent of employers plan to increase permanent staff.
* 46 per cent of employers are finding it harder to get the right candidates.
* 43 per cent are stretching their budget to get the preferred choice.
Source: Hudson Salary and Employment Insights 2012