NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Economy / Employment

Pay rise? Salary increases amid soaring inflation, tight labour market, unlikely

Cameron Smith
By Cameron Smith
Online Business Editor·NZ Herald·
23 Jan, 2023 04:00 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
6Comments

Subscriber benefit

The ability to gift paywall-free articles is a subscriber only benefit. See more offers by clicking the button below.

Already a subscriber?  Sign in here
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Hipkins gets to work, tragic week of drownings & Coronation plans revealed | Focus Morning Bulletin: 23 January, 2023
Our new PM gets set to reshuffle cabinet, a deadly reminder about water safety and how the UK will celebrate King Charles? coronation in the latest New Zealand Herald headlines. Video / NZ Herald ...
Video Player is loading.
Current Time 0:00
/
Duration 0:00
Loaded: 0%
0:00
Stream Type LIVE
Remaining Time -0:00
 
1x
    • Chapters
    • descriptions off, selected
    • captions settings, opens captions settings dialog
    • captions off, selected

      This is a modal window.

      Beginning of dialog window. Escape will cancel and close the window.

      Text
      Text Background
      Caption Area Background
      Font Size
      Text Edge Style
      Font Family

      End of dialog window.

      This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.

      Autoplay in
      3
      Disable Autoplay
      Cancel Video
      Our new PM gets set to reshuffle cabinet, a deadly reminder about water safety and how the UK will celebrate King Charles’ coronation in the latest New Zealand Herald headlines. Video / NZ Herald
      NOW PLAYING • Hipkins gets to work, tragic week of drownings & Coronation plans revealed | Focus Morning Bulletin: 23 January, 2023
      Our new PM gets set to reshuffle cabinet, a deadly reminder about water safety and how the UK will celebrate King Charles? coronation in the latest New Zealand Herald headlines. Video / NZ Herald ...

      Workers after a pay rise in the coming year could be left wanting.

      Economic uncertainty stemming from a tight labour market and soaring inflation is clouding the outlook for salary increases, according to a new survey of New Zealand organisations.

      Global consulting firm Mercer’s annual Total Remuneration Survey found employers are budgeting for a median salary increase of 3 per cent in 2023 across a range of industries, unchanged from the previous year’s survey.

      However, for many employees, this will be of little comfort in the face of the rising cost of living and increasing mortgage repayments.

      Inflation is running at a 32-year high of 7.2 per cent.

      Keep up to date with the day's biggest stories

      Sign up to our daily curated newsletter for the day's top stories straight to your inbox.
      Please email me competitions, offers and other updates. You can stop these at any time.
      By signing up for this newsletter, you agree to NZME’s Terms of Use and Privacy Policy.
      Advertisement
      Advertise with NZME.

      “The cautious approach will come as a hard truth for many employees faced with cost of living increases,” said Andrew McKechnie, head of workforce solutions for Mercer New Zealand.

      Just one in four organisations (26 per cent) say they plan to factor inflation into their 2023 salary budgets, according to Mercer.

      Those in information technology (IT) can expect the biggest year-on-year salary increases.

      Advertisement
      Advertise with NZME.

      The median salary increase for information systems architecture specialist professionals was over 13 per cent, while technical project management specialist professionals are receiving increases as high as 9 per cent.

      Other sectors forecasting big salary growth this year are manufacturing (2.7 per cent to 3.5 per cent), energy (2.5 per cent to 3.2 per cent), and life sciences (2.9 per cent to 3.5 per cent).

      McKechnie said attracting and retaining talent would be more challenging than ever this year.

      The survey found nearly one-third (31 per cent) of New Zealand organisations reported increased employee turnover as an issue in 2022, up from 14 per cent in 2021.

      Meanwhile, 51 per cent reported having difficulty hiring or retaining employees in certain roles, compared to 42 per cent in 2021.

      But McKechnie urged organisations to take a holistic approach to employee benefits amid tight control over salary budgets.

      He said non-financial rewards were taking centre stage.

      “While competitive salaries may get employees in the door, organisations must think about what will incentivise them to stay, particularly in a high inflation environment with record-low unemployment rates.

      Advertisement
      Advertise with NZME.

      “In this war for talent, it’s important to remember that remuneration packages are so much more than pay packets and there is still value in non-financial benefits.”

      McKechnie said employees were increasingly looking for a more personalised work experience.

      “One of the biggest trends we’re seeing is the gift of time. Off the back of the pandemic, it’s no surprise we’re seeing an increasing number of organisations offering hybrid and flexible working arrangements,” he said.

      Shay Peters, CEO of recruitment company Robert Walters Australia and New Zealand, said both employers and employees needed to have open and honest conversations around pay and benefits.

      In a similar survey, Robert Walters found almost 70 per cent of employers told researchers that they do not expect to offer salary increases above inflation over the coming year.

      However, in stark contrast 79 per cent of candidates said they would walk away if their pay packets aren’t in line with the rising costs of living.

      “More than ever, frank and transparent communication is key as both sides need to appreciate the pressure the other is facing if they are to reach a sensible balance.

      “We’re finding that where organisations cannot increase salary offers, sign-on bonuses, additional training and boosted leave entitlements can encourage candidates to look beyond mere salary levels and towards an increased quality of life.

      “Providing an environment in which people enjoy working will become even more vital when salary expectations cannot be met, with superior employee wellbeing a valuable advantage for organisations seeing their star staff offered wage rises elsewhere.

      “Employees need to weigh up on job security and additional benefits before making any knee-jerk decisions.”

      Despite a tight labour market, 24 per cent of organisations (up from 15 per cent last year) said they plan to increase the size of their workforce over the next 12 months, according to Mercer’s Total Remuneration Survey.

      Meanwhile, three-quarters (73 per cent) intend to maintain their workforce size.

      Read More

      • The Great Resignation 'tidal wave' hits NZ - what it ...
      • Why most of NZ's workforce is in for a 'virtual' pay ...
      • Wages rising - but how to ask for that pay raise? - ...
      • Nearly half of Gen Z, Millennials live pay cheque to ...

      “For those planning to increase staff numbers, the question is: how are they going to achieve this with limited salary budgets in such a competitive talent market?” McKechnie said.

      “The best employers take a data-driven approach to set salary budgets and pay increases, informed by both market conditions and business priorities.”

      Mercer’s Total Remuneration Survey covered a broad range of industries from more than 330 employers.

      Subscriber benefit

      The ability to gift paywall-free articles is a subscriber only benefit. See more offers by clicking the button below.

      Already a subscriber?  Sign in here
      Save

        Share this article

        Reminder, this is a Premium article and requires a subscription to read.

      6

      Comments

      Latest from Employment

      Premium
      Opinion

      Sasha Borissenko: Is gig work freedom or friction?

      13 Jul 12:01 AM
      Premium
      Technology

      ‘Huge upheaval’: Big Govt department's tech team to be cut

      11 Jul 04:00 AM
      Premium
      Technology

      Video game sector jobs up 20.5% with tax rebate, but half of funds unclaimed

      09 Jul 05:00 PM

      From early mornings to easy living

      sponsored
      Advertisement
      Advertise with NZME.
      Recommended for you
      Teen's 900km ride for Māori wards ends with cheers at Parliament
      Rotorua Daily Post

      Teen's 900km ride for Māori wards ends with cheers at Parliament

      14 Jul 12:34 AM
      Gisele Pelicot to receive Legion of Honour
      World

      Gisele Pelicot to receive Legion of Honour

      14 Jul 12:29 AM
      Workplace incident at Remuera home leaves one critically injured
      Auckland

      Workplace incident at Remuera home leaves one critically injured

      14 Jul 12:17 AM
      Two dead, state trooper and others injured in Kentucky shootings
      World

      Two dead, state trooper and others injured in Kentucky shootings

      14 Jul 12:03 AM
      Kaitāia Airport's $5.4m upgrade progresses with regular iwi meetings
      Northland Age

      Kaitāia Airport's $5.4m upgrade progresses with regular iwi meetings

      14 Jul 12:00 AM

      Latest from Employment

      Premium
      Sasha Borissenko: Is gig work freedom or friction?

      Sasha Borissenko: Is gig work freedom or friction?

      13 Jul 12:01 AM

      OPINION: The Government is already moving to tighten up who an employee is.

      Premium
      ‘Huge upheaval’: Big Govt department's tech team to be cut

      ‘Huge upheaval’: Big Govt department's tech team to be cut

      11 Jul 04:00 AM
      Premium
      Video game sector jobs up 20.5% with tax rebate, but half of funds unclaimed

      Video game sector jobs up 20.5% with tax rebate, but half of funds unclaimed

      09 Jul 05:00 PM
      'Unrelenting': Unions tell Supreme Court Uber imposes 'intensive' control over drivers

      'Unrelenting': Unions tell Supreme Court Uber imposes 'intensive' control over drivers

      09 Jul 04:53 AM
      Solar bat monitors uncover secrets of Auckland’s night sky
      sponsored

      Solar bat monitors uncover secrets of Auckland’s night sky

      NZ Herald
      • About NZ Herald
      • Meet the journalists
      • Newsletters
      • Classifieds
      • Help & support
      • Contact us
      • House rules
      • Privacy Policy
      • Terms of use
      • Competition terms & conditions
      • Our use of AI
      Subscriber Services
      • NZ Herald e-editions
      • Daily puzzles & quizzes
      • Manage your digital subscription
      • Manage your print subscription
      • Subscribe to the NZ Herald newspaper
      • Subscribe to Herald Premium
      • Gift a subscription
      • Subscriber FAQs
      • Subscription terms & conditions
      • Promotions and subscriber benefits
      NZME Network
      • The New Zealand Herald
      • The Northland Age
      • The Northern Advocate
      • Waikato Herald
      • Bay of Plenty Times
      • Rotorua Daily Post
      • Hawke's Bay Today
      • Whanganui Chronicle
      • Viva
      • NZ Listener
      • Newstalk ZB
      • BusinessDesk
      • OneRoof
      • Driven Car Guide
      • iHeart Radio
      • Restaurant Hub
      NZME
      • About NZME
      • NZME careers
      • Advertise with NZME
      • Digital self-service advertising
      • Book your classified ad
      • Photo sales
      • NZME Events
      • © Copyright 2025 NZME Publishing Limited
      TOP
      search by queryly Advanced Search