Salary Expectations Put Businesses under Pressure   14 Feb 2012

Salary expectations are a growing source of tension between businesses and employees, according to Hudson’s Salary and Employment Insights 2012 series of reports1.

“Employers are under pressure to simultaneously improve the quality of their hires and control the cost of these hires – they need valuable employees to take the business forward, but not at any cost,” says Roman Rogers, Executive General Manager, Hudson New Zealand.

“Facing the tension of trying to do more with less is especially difficult when salary is the top driver for 36% of employees, with many believing that it will be ‘easy’ or ‘very easy’ to find a similar job with comparable pay and conditions.”

Nearly seven out of 10 employees are considering moving jobs in 2012, while two-thirds of employers say they are worried about losing their existing high performers.

Across the board, nearly 28% of employers intend to increase permanent staff levels. Candidates with business acumen, a cross-functional knowledge and an ability to contribute to the organisation’s overall strategic direction are highly sought-after across all sectors. This is particularly evident as key business functions, including IT and finance, become a key driver of business performance.

Almost half of hiring managers report the salary expectations of preferred candidates exceed their budget, with 43% increasing their budget to secure the best candidate, with the remaining employers settling for their second-choice. Furthermore, about six out of ten employees feel that they deserve a pay rise in 2012.

“Salaries are increasing, particularly for talented mid to senior hires,” says Roman Rogers, Executive General Manager, Hudson New Zealand. “In challenging times, businesses can’t afford to compromise on investing in their people, but at the same time they face a dilemma with corporate growth rates lagging employees’ heightened salary expectations. We suggest they fine-tune their recruitment strategies to find and retain high performers who can make the biggest difference to the bottom line.”

The skills shortage is intensifying competition for the most talented candidates – almost half (46%) of employers said it was harder to secure the right candidates in 2011, particularly for senior strategic and managerial roles.

“In order for managers to cope with the increasing salary pressure being placed on them, they need to understand the difference between ‘cost’ and ‘value’ when choosing their teams and allocating their salaries,” says Rogers.

To help organisations achieve their aim of addressing the gap between rising salaries and slowing profit growth, Hudson recommends companies adjust their approach to recruiting to ensure they get the best performers.

Firstly, organisations need to identify high achievers. To do this, they need to broaden their approach from traditional methods of selecting new hires that focus on technical qualifications and experience, Rogers said. Hudson Difference™ helps organisations identify the most suitable fit by including assessments that measure candidates’ motivational and behavioural attributes, which have been shown to be more accurate indicators of performance. Only 32% of companies assess candidates’ behavioural, personality and intelligence attributes, while only 6% use assessments that test for cultural fit. Current approaches have been costly for a number of employers who have reported that 44% of employees were described as ‘not good’ in 2011. A cost-driven approach and corner-cutting has led to mistakes, and about a third of organisations said that in hindsight they would have done more to assess candidates’ abilities to ensure the value of their investment was realised.

Secondly, organisations need to understand their priorities in terms of the harder-to-fill strategic roles that help take an organisation forward, and the ‘critical’ and ‘core’ roles that keep the organisation functioning on a day-to-day basis.

“Many businesses need to review their recruitment function – from the brief they give to their recruitment consultants, through to interview and on-boarding procedures. Much recruitment is cost-driven and much is compromised by time constraints, yet poor hires can cause untold damage in terms of culture, morale, productivity and profits.”
“A more liquid workforce is both a threat and an opportunity for employers,” says Rogers. “This is a great time for organisations to evolve their practices to extract the most value from their teams.

“There’s also an opportunity for smart employers to think beyond just the salary and offer attractive, tailored remuneration packages to individual employees. Salary is important, but it’s not everything. Sometimes overpaying can be as risky as underpaying – no organisation wants to be represented by employees who are driven solely by salary.”

(Hudson Report)

Add a comment

Bookmark and Share

News

WW100 First World War Centenary Programme announced

28 Jul 2014 News
New Zealand Government Christopher Finlayson 28 JULY, 2014 WW100 First World War Centenary Programme announced New Zealand’s... more

Youth Crime Action Plan on track as youth crime falls

28 Jul 2014 News
Efforts to tackle youth offending are building momentum as communities and government agencies embrace the Youth Crime Action Plan... more

Business

Auckland Airport cuts fine deal in US$250M bond issue

25 Jul 2014 Business News
Article - BusinessDesk   Auckland Airport cuts fine deal in US$250M bond issue By Paul McBeth Jul. 25 (BusinessDesk) - Auckland... more

NZ dollar slides to 6-week low on intervention talk

24 Jul 2014 Business News
Article - BusinessDesk   NZ dollar slides to 6-week low as RBNZ's Wheeler invokes intervention criteria By Paul McBeth July 24 ... more

Living

Cliff Curtis’ Startling Confession in Mana Magazine

28 Jul 2014 Lifestyle
The new-look Mana magazine includes a story on Hollywood star and Rotorua local, Cliff Curtis. The famously versatile actor talks... more

NZ Film 'The Dead Lands' to Have Toronto World Premiere

23 Jul 2014 Entertainment
New Zealand Film Commission New Zealand Film 'The Dead Lands' to Have Toronto World Premiere Maori action epic The Dead Lands will... more

Property

NZ house sales fall in June, led by cheaper properties

14 Jul 2014 Property By Suze Metherell
July 14 (BusinessDesk) - New Zealand house sales fell in June from a year earlier, led by properties of $400,000 or less, indicating... more

Average Auckland house prices reach record level

10 Jul 2014 Property
The average asking price for a home in Auckland has reached the record level of 732 thousand, 240 dollars. The figure is provided by... more

Migration

UK Tier 1 visa extension deadline looming

11 Jul 2014 Migration
If you’re in the UK on a Tier 1 (General) visa, you’ll need to apply for an extension as soon as possible. The deadline... more

NZ more appealing to ex-pats - survey

10 Jul 2014 Migration
Auckland and Wellington have become more appealing to ex-pats in the past 12 months, a new survey has found. Both cities both dropped... more

Travel

Cycleways bring economic benefit to communities

24 Jul 2014 Travel & Tourism
An increasing number of cycleways are attracting tourists to regions and scenic parts of New Zealand and a special session at the... more

100% Middle-Earth campaign wins prestigious travel award

17 Jul 2014 Travel & Tourism
Associate Tourism Minister Todd McClay has congratulated Tourism New Zealand on winning the Pacific Asia Travel Association’s... more

Sport

2014 Glasgow Day 4: A deluge of medals

28 Jul 2014 Commonwealth Games
New Zealand really got among the medals at the Commonwealth Games toda... more

2014 Commonwealth Games: Medal-laden weekend but NZ pipped on population medal table

28 Jul 2014 Commonwealth Games
Statistics New Zealand New Zealand's athletes scooped 18 medals across the weekend competition in Glasgow, but one solitary silver... more

Columns

Gordon Campbell on Gaza and burning the Israeli flag

24 Jul 2014 Opinion By Gordon Campbell
One of the selling points in New Zealand’s campaign for a temporary seat on the Security Council is that we have a pluckily... more

7 highly effective habits to stay healthy at work

23 Jul 2014 Column By Tricia Alach
The holistic helper's guide to wellbeing and work: part eight Like all good reports, my Wellbeing and Work series comes with an... more

Kiwi Success

Hon.Judith Collins announces appointments to Public Trust Board

23 Jul 2014 Appointments
New Zealand Government Appointments to Public Trust Board   Justice Minister Judith Collins today announced the appointment of ... more

NZ Government Minister Foss announces commerce reappointments

23 Jul 2014 Appointments
Commerce Minister Craig Foss today announced four reappointments to various independent Crown entities and statutory... more

Recruitment

750 additional Trades Academy places for 2015

14 Jul 2014 Recruitment
New Zealand Government   Hon Steven Joyce Minister for Tertiary Education, Skills and Employment Hon Hekia Parata Minister of... more

Take a dip into global talent pool

9 Jul 2014 Recruitment
International candidates can bring added value, says recruitment specialist New Zealand's thriving economy has created a "unique... more