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Home / Business / Companies / Construction

Building booming but salaries stay static

By Steve Hart
NZ Herald·
4 Aug, 2015 05:00 PM4 mins to read

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Photo / Getty Images

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Growth driven by Auckland and Christchurch not reflected in pay

People working in the construction industry continue to enjoy the benefits of the building boom in Christchurch and Auckland.

But according to an industry survey by recruitment firm Hays Construction and the New Zealand Institute of Building, salaries are not widely reflecting the continued strong demand for - and apparent shortage of - skilled people.

David Cleet, senior manager at Hays Construction, says despite the impact of the Christchurch rebuild, Auckland's continued housing shortage means it is the dominant player when it comes to construction activity.

He says population growth and the lower exchange rate are also contributing to the Super City's demand for building industry professionals.

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"It may come as a surprise that salaries remained reasonably static overall," Cleet says.

While pay rates don't tell the whole story, there are some jobs that have enjoyed increased salaries. For example, people working in the fit out/refurbishment and residential areas, as well as those in commercial construction, have enjoyed pay raises of between 5 and 15 per cent.

Other exceptions to the apparent static wage growth during the 12 months to May include project managers and senior project managers/project directors working on developments with a value of $50 million or more.

These workers saw their salaries rise from $140,000 to $150,000 and $160,000 to $180,000 respectively (on average).

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According to the survey, while people in Auckland generally earn the most, the pay disparity across the country for any given role varies by around 10 per cent either side of the median figure.

The lowest wages are generally paid to people working on the East Coast and Northland, but only by about 12 per cent less a year on average (when compared with the highest salaries for any given role).

For example, the survey says a health and safety manager can earn $90,000 a year in Northland, $95,000 (Auckland and Christchurch), $85,000 (East Coast) and $100,000 in Wellington.

Jason Walker, managing director of Hays in New Zealand, says the main reason for salaries remaining reasonably static overall is that employers are not willing to pay staff higher salaries due to the current economic climate. "Other reasons include low margins in construction contracts, productivity issues due to economies of scale and some companies moving towards performance-related bonuses rather than salary rises," he says.

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In other words, while salaries may appear static, target-based bonuses are used to bump up the total earned.

It also seems that the higher the annual turnover of a company, the more they pay their staff.

According to the survey's findings, a project manager employed by a firm turning over up to $10 million a year can expect to earn $105,000 a year, but his counterpart at a $50 million-a-year firm will likely be paid $135,000.

Average time worked across the building industry is above the standard 40 hours a week, with 25 per cent of respondents putting in between 50 and 59 hours, 1 per cent work more than 60 hours, and the rest work between 40 and 49 hours a week.

Among the hardest people to recruit are estimators, project managers and senior managers.

"Most companies, no matter where they are located in New Zealand, say the acute skills shortage is the biggest inhibitor to growth," Walker says.

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"But rather than raising salaries for these construction workers, employers are choosing to adopt a solid attraction and retention strategy.

"As part of this, we suggest employers take proactive action to address the growing gap between employee and employer expectations.

"It is also hoped that record migration and near record numbers of returning New Zealanders will help to ease the skills shortage in years to come."

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