KEY POINTS:
A tight labour market means workers are likely to be the winners in any upcoming pay deals.
With market commentators predicting that employers will be keener than ever to hang on to skilled staff as shortages across all occupational groups continue, persuading your boss you're worth that big
pay rise may not be so difficult in the coming months.
Employers still need to ensure salaries are competitive, to retain the staff they have.
"The pressure is on employers to maintain wage levels and keep them competitive," the EPMU's Andrew Little says. "If they don't, they will continue to lose people, not just to other employers here, but offshore."
And his tips on getting the best deal?
First, remind your boss that inflation is heading up and that the economy is still strong.
Mention too that a good manager gets the best out of that buoyant economy and you expect to as well.
"And remind them there's a high churn, highly mobile labour market. If they want to keep you, then they need to pay you more."
Jason Walker, managing director of Hays Recruitment, which carries out an annual wage and salary survey, says most skilled workers these days have several job options. Smart employers are reviewing their recruitment processes to provide a more flexible work environment.
Meanwhile the Employers and Manufacturers Association suggests we follow the example of the Aussies when negotiating with the boss and plump for a package where non-cash elements such as a vehicle, carparking, medical schemes and the like are factored in to total remuneration.
Says the association's Stephen Frawley: "There's going to have to be a bit of a shift from both sides on how other benefits, the indirect costs that in the past might not have been so significant, are valued and assessed."
KiwiSaver, the Government's controversial superannuation scheme, is also expected to be a useful bargaining tool. Under changes announced in the budget, nearly every New Zealander aged between 18 and 65 who starts a new job from July 1 will automatically be enrolled with KiwiSaver. Those already employed can opt into the scheme. Employers will have to make contributions, starting at 1 per cent of an employee's salary next year, growing to 4 per cent in the following three years.
Some employers claim the scheme will be a significant burden on them and will lead to lower wage rises.
But Little says KiwiSaver could be used to advantage by both sides.
A two-plus-two arrangement - where both employee and employer contribute 2 per cent to the scheme - was generally considered to be a reasonable compromise, he said.
"There will still be questions around the trade-offs regarding the cash component, but the settlements we've done this year have still had a cash element of around 4 per cent."