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

First steps taken towards flag referendum

29 Oct 2014 News
New Zealand Government Rt Hon John KeyPrime Minister Hon Bill EnglishDeputy Prime Minister 29 October 2014 Cabinet has agreed on the... more

NZ to join global crackdown on tax evasion

29 Oct 2014 News
Revenue Minister Todd McClay today announced New Zealand’s timetable for participation in a global automatic exchange of... more

Business

NZ dollar holds gains as traders await central bank meetings

28 Oct 2014 Business News
By Paul McBeth Oct. 28 (BusinessDesk) - The New Zealand dollar held gains in the local trading session as traders remain cautious... more

Orion Health seeks up to $150mln, eschews forecasts

28 Oct 2014 Business News
By Fiona Rotherham Oct. 28 (BusinessDesk) - Orion Health Group, which develops software systems for patient health management, wants... more

Living

Duo wins MKR NZ by just one point

29 Oct 2014 Food & Wine
Neena and Belinda have won the first season of My Kitchen Rules New Zealand. The "Modern Day Hippies" beat Aaron and Heather in... more

MKRNZ - The WeedEaters are cleaning up

28 Oct 2014 Food & Wine
Modern Day Hippies Neena and Belinda breezed through the semi finals last night on My Kitchen Rules New Zealand and no one could be... more

Property

Goodman Property sells three Christchurch sites for $18.9M

28 Oct 2014 Property
By Suze Metherell Oct. 28 (BusinessDesk) - Goodman Property Trust, the biggest listed property investor by market value, sold two... more

Double-digit rate increases loom

24 Oct 2014 Property
Aucklanders living in the ‘hottest suburbs’ could be the big losers, while businesses will come out winners Rate rises... more

Migration

New Zealand Named The Best Place For Raising Children

24 Oct 2014 Migration
New Zealand has been named the best place to raise a child in the Raising Children Abroad annual league table. According to the HSBC... more

Desperate employers keeping overstayers

24 Oct 2014 Migration
Desperate employers seeking to fill job shortages are keeping migrant workers who previously held a work visa in New Zealand... more

Travel

Air New Zealand's GENIUS Hobbit themed safety video

24 Oct 2014 Travel & Tourism
Giving flyers an Unexpected Journey! Elijah Wood and Sir Peter Jackson star in 'epic' Hobbit themed Air New Zealand safety video Air... more

Travel 'interns wanted' to tour 2000km of NZ

24 Oct 2014 Travel & Tourism
Forget a summer internship of fetching coffee and photocopying - a travel company is offering a $30,000, 10-day, 2000km tour of New... more

Sport

NZ Rugby League: Matagi to debut against Samoa

29 Oct 2014 Rugby League
Vodafone Warriors prop Suaia Matagi is poised to play his first test for the NZ Kiwis against his old team-mates, Toa Samoa, at... more

Cancer Society named official charity for Cricket World Cup

28 Oct 2014 Cricket
ICC Cricket World Cup 2015 Cancer Society named official charity in New Zealand for ICC Cricket World Cup 2015 The Cancer Society has... more

Columns

The return of Occupy London: this time it’s truly political

28 Oct 2014 Opinion
Article - Adam Parsons The return of Occupy London: this time it’s truly political by Adam Parsons22 October 2014more

Gordon Campbell on the TPP finishing line, and Amazon’s woes

28 Oct 2014 Column
Column - Gordon Campbell Gordon Campbell on the TPP finishing line, and Amazon’s woes by Gordon Campbell If the Trans Pa... more

Kiwi Success

New Ambassador to France appointed

28 Oct 2014 Appointments
Minister of Foreign Affairs Foreign Minister Murray McCully has appointed diplomat James Kember as New Zealand’s next... more

Jim Hickey hangs up his umbrella

24 Oct 2014 People
Veteran weathercaster Jim Hickey has announced his retirement today, saying is was a tough decision. "I feel like I'm subbing off at... more

Recruitment

More than 600 take up 3K to Christchurch jobs

28 Oct 2014 Recruitment
Social Development Minister Anne Tolley says the Government’s 3K to Christchurch scheme is a winner with 633 unemployed people... more

UK ambulance service poaches Kiwi paramedics

24 Oct 2014 Recruitment
New Zealand paramedics are being poached by Britain's busiest ambulance service. Interviews were held in Auckland on Friday and... more