New Zealand employees have been patient with their companies over the last few years, aware that their employer has been trying to get through some tough times, but finally the tide is turning.
2014 is going to be all about salaries, and in Michael Page's latest Employee Intentions Report, almost 60 per cent of employees are intending to seek new better paid jobs in 2014, confident that the market has a growing number of opportunities.
We have seen a continual increase of new opportunities come to market year on year over the past four years. However job creation and job growth is still yet to return to pre GFC years. What is currently driving the recruitment market is employee churn / attrition," says Macauley. And we are also starting to see an increase in attrition.
Job seekers are expecting a new role to come with a 10 to 12 per cent salary increase, according to 32 per cent of respondents in the 2013 Michael Page Employee Intentions Report. They are also concerned that a new role reflects a career progression.
Financial reward based on performance, meanwhile, for example a salary increase or bonus, would encourage them to stay in their current role. This was particularly important for those between the ages of 45 and 54.
Another 25 per cent, said career development, would make them stay.
Almost 40 per cent said a bonus is what they would most like from employers, with many concerned about their salary keeping up with living costs in the next 12 months.
An issue of some concern, according to Macauley, is the strong misalignment between employers and employees and their expectations of salary raises in the next year. Employers in a number of sectors are forecasting three to five per cent increases in salaries for existing staff.
However in certain industries, employers' hands will be forced to raise salaries because of the supply and demand situation, says the Michael Page regional director. "In property and construction, there has been an increase in demand across every function," says Macauley. The Christchurch rebuild, building upgrades, leaky building remedial work, investments in New Zealand property stock and the national programme for seismic building upgrades, are generally driving construction demand in the country.
There is also strong demand for professionals in commercial property, for instance in retail property, property development, capital projects and property investment. Macauley says some employers in the sector have not taken in the change of salary expectations. "There is a gap in what the employer needs to pay to hire versus what they used to pay. That gap is considerable - up to 20 per cent."
For those in quantity surveying, project management and commercial property valuation areas, demand is highest for professionals that fall within the $75,000 to $120,000 salary bracket. These candidates are capable of adding immediate value to the business and can also perform multiple roles for their business.
One trend, Macauley is seeing from all sectors, is talented staff receiving job offers and using that as a motivator for their current employer to raise salaries.
"We are seeing an increase in counter offers but that's not necessarily healthy," says Macauley.
"They are usually back in the market six months later because they have not seen the increase in seniority." It says to him that employers, who are forecasting further growth, need to be prepared to do more to retain their talent.
Counter offers are especially being seen in sales, adds Macauley. "The employer looks at the revenue the sales person can generate, then the loss of revenue and how long it will take to get a new person up to speed."
Sales staff are seeing an increase in salary across roles where candidates can provide strong analytical skills, he says. "They use that data to identify opportunities. They are more technically oriented, rather than having the gift of the gab," says Macauley. Companies are looking for sales people to grow multiple accounts. Rather than just servicing accounts, they are adding value.
Marketing will also have a better 2014, predicts Michael Page.
"We are seeing a strong increase in the demand and remuneration levels for insights analysts as businesses move towards making better use of the data they have on a range of business units and product categories. There is a shortage on good brand and category candidates so this has driven the salary levels for these role higher. Experienced digital marketing candidates are experiencing more demand and increasing salary levels also."
Meanwhile in the finance sector and others, where employees are used to receiving bonuses, normally 10 or 20 per cent of salary, these are being paid but not in full, says Macauley.
Bonuses in most sectors are paid according to company performance and personal performance and with many organisations still not achieving their targets, employees are getting 50 to 70 per cent of their company performance bonus and 100 per cent of personal.
In the finance sector, Michael Page is forecasting salary increases in mid-level management accounting, business and financial analytical roles and commercial managers. It is also expecting continued growth across the FMCG, manufacturing, technology and professional services sectors as businesses continue to focus on identifying and growing new revenue opportunities whilst minimising costs.
The procurement and supply chain sector, a relatively young market here, will be offering opportunities for increased salaries in 2014, says Macauley.
Michael Page is seeing increased demand for specific skills such as supply chain planners, demand planners, procurement category managers and procurement managers due to companies looking to cut costs and improve efficiencies through their procurement and supply chain function.
With the market moving in the right direction, it is time to hone those salary negotiation skills.
"We will see a greater level of churn and employees will realise that after three or four years, and not receiving career progression, they will be looking for better opportunities in the market," says Macauley.
Tips on asking for a pay rise
1: Know your worth - Do a survey of what people in similar types of roles are receiving in both base pay and total remuneration.
2: Be professional - Set a time and have a proper meeting with your boss. Don't be tempted to blurt out that you want more money in a lift or when you
are on your mobile!
3: Sell your achievements - Remind your boss about your successes over the last 12 months, giving them reasons why you should have an increase.
4: Be nice - Don't get angry, demand an increase or put forward an ultimatum. This will only lead to an eventual career 'death spiral'.
5: Remember what's important - If your boss is not moving on dollars, see if you can leverage other benefits such as car, further educational / learning opportunities, flexi-time and so on.
Jobs offering the highest salaries in 2013 were:
• Information technology (IT) project managers - $225,000
• Doctors and specialists - $225,000
• IT systems architects - $211,000
• IT consultants - $211,000
• IT sales representatives - $207,000
• Commercial realtors - $185,000
• IT managers - $185,000
• IT security specialists - $182,000
• Bank, finance and insurance managers - $155,000
• Engineering managers - $150,000
Industries on the rise
• Construction and engineering
• Commercial real estate
Live chat with Pete Macauley. Go to nzherald.co.nz/career14 on Tuesday 28th January at noon to ask him questions around wages and salaries.