Salary Expectations Put Businesses under Pressure 14 Feb 2012
- NZ dollar declines as US data signals continued growth Business
- Whanganui Community Corrections opened News
- Social Sector Trial helping Dunedin youth into work News
- Employment Standards Bill introduced News
- Instant Finance lifts FY profit by 11%; Sth Akl on the mend Business
- NZ manufacturing activity slows in July as dairy woes weigh Business
- Massey lecturer honoured for contribution to Dairy News
- Minister welcomes ERA appointments News
- Treaty Negotiations Minister Needs to Get a Grip News
- Sick leave expected to increase during World Cup Sport
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.”
3 Sep 2015 News
Science and Innovation Minister Steven Joyce has today announced funding for 48 new science research programmes, for a total... more
3 Sep 2015 Business News
CORRECT: Government, iwi reach agreement for private housing on Crown land in Auckland (Removes reference to selling land in... more
3 Sep 2015 Business News
Sept. 3 (BusinessDesk) - Air New Zealand, the national carrier, will defend a multi-billion dollar class action in the US... more
10 Aug 2015 Entertainment
20th Century Fox is celebrating Snoopy’s birthday ahead of the release of the first animated Peanuts movie SNOOPY AND CHARLIE... more
6 Aug 2015 Entertainment
Sola Rosa Sound System comes to London on 20 August – NZNewsUK London Editor Charlotte Everett had a chat with frontman Andrew... more
3 Sep 2015 Property
Article - BusinessDesk Auckland house sales climb to 15-year high for month of August, prices stall Sept. 3 (BusinessDesk) -... more
5 Aug 2015 Property
Auckland house price growth stalls in July as properties 'fully priced', Barfoot says Aug. 5 (BusinessDesk) - Auckland house... more
21 Jul 2015 Migration
NZ net migration reaches new annual record in June, swelled by Indian, Chinese students July 21 (BusinessDesk) - New Zealand... more
25 Aug 2015 Travel & Tourism
Air NZ to continue alliance with Cathay Pacific, targets Asian tourists Aug. 25 (BusinessDesk) - Air New Zealand's has had its... more
3 Sep 2015 Sport
3 Sept 2015 Emotions ran high on an action packed day four at the 2015 World Rowing Championships with eight New Zealand crews taking... more
25 Aug 2015 Opinion
Gordon Campbell on the flag campaign So far, the public has treated the government’s flag campaign with something between... more
3 Sep 2015 Appointments
Library and Information Advisory Commission Appointments Internal Affairs Minister Peter Dunne today announced three new... more
5 Aug 2015 Recruitment
The latest labour market data shows continued job growth, with 7,000 more people employed over the last quarter and 69,000 more New ... more
5 Aug 2015 Recruitment
NZ unemployment rate rises to 5.9% as jobs growth lags behind growing population Aug. 5 (BusinessDesk) - New Zealand's jobless rate... more