KEY POINTS:
Wage increases for workers have overtaken those of their bosses for the first time in two years, a survey by human resources consultancy firm Mercer has found.
In the year to March 2008 fixed pay for staff in non-management roles rose by 5.8 per cent, beating the 5.2
per cent increase in executive pay.
The result is a turnaround from the previous year, when workers received an increase of 4.8 per while bosses' salaries rose by 5.8 per cent.
Mercer New Zealand's head of human capital business, Martin Turner, said the strong increase for general staff was most likely linked to New Zealand's tight labour market.
"Despite the recent news of a significant drop in the number of people in jobs, New Zealand's unemployment rate is still one of the lowest in the world and significant skills shortage are still evident."
Last week Statistics New Zealand figures revealed the number of people in employment dropped by 29,000 in the first three months of this year - the biggest drop in any three-month period since 1989.
But Turner said it was likely the job losses were hitting the unskilled and semi-skilled workforce rather than administrative positions where there remained a shortage of skilled workers.
However, Turner said the survey findings could also indicate executives were receiving more of their remuneration in variable payments such as performance related bonuses rather than through their fixed pay.
The biannual survey also found fewer people were choosing to change jobs with the voluntary turnover rate dropping from 23 per cent to 18 per cent in the six months from September 2007 to March 2008.
In the previous six months voluntary turnover had increased from 17 per cent to 23 per cent.
Turner said the turnover had come off a bit and could be a sign of nervousness on the back of the slowing economy. But skilled workers should not be worried.
"It will take a lot for an economic slowdown to affect New Zealand's job market, and employers are being stretched to their limits with salaries increasing above inflation in an effort to both attract and retain talent."
Salaries for hiring new managers were up 2.5 per cent in the last year compared to 0.7 per cent in the previous year. Pay packets for professionals entering the workforce have spiked up from 0.4 per cent growth to 4 per cent.
Regional centres also saw higher increases in pay packet growth than city centres.
Salary increases for Auckland-based employees dropped from 5.5 per cent to 5.2 per cent and Wellington pay packets fell from 6.7 per cent to 5.1 per cent. Regional centres were up from 4.8 per cent to 5.3 per cent.
A recent survey by Robert Half on Auckland's finance and accounting market also found over half of employers were having difficulty in finding skilled candidates with the biggest shortages in credit, bookkeeping, payroll and general accounting.