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

Shanghai trip to inspire New Zealand teachers

16 May 2016 News
Asia New Zealand Foundation Shanghai trip to inspire New Zealand teachers A group of teachers hailing from Invercargill to Whangarei... more

Highest ever percentage of women on state sector boards

16 May 2016 News
New Zealand Government Hon Louise Upston Minister for Women 15 May 2016 Highest ever percentage of women on state sector boards New... more

Business

NZ dollar tumbles vs Aussie after RBA minutes

17 May 2016 Business News By Johnathan Underhill
Tuesday 17 May 2016 05:10 PM NZ dollar tumbles vs Aussie after RBA minutes, extends slide on inflation outlook May 17 ... more

Emirates Team New Zealand partners with HP NZ

17 May 2016 Business News
HP New Zealand Media Alert Emirates Team New Zealand partners with HP NZ to drive performance in 35th America’s Cup Auckland, ... more

Living

Exhibition to Showcase Ashburton’s Migrant Community

16 May 2016 Lifestyle
Crossing The Bridge Exhibition to Showcase Ashburton’s Migrant Community 16 May 2016 A photography and film exhibition... more

Hunt for the Wilderpeople Takes Top Spot at the Box Office

16 May 2016 Entertainment
Taika Waititi’s Hunt for the Wilderpeople has cemented its place in the record books overtaking the 2010 Kiwi classic BOY... more

Property

Record annual profit for Kiwi Property

16 May 2016 Property
By Jonathan Underhill May 16 (BusinessDesk) - Kiwi Property Group, the country's biggest listed property investor by market value,... more

Record annual profit for Kiwi Property

16 May 2016 Property
Portfolio gain, rental income growth delivers record annual profit for Kiwi Property By Jonathan Underhill May 16 (BusinessDesk) -... more

Migration

Kiwis could be affected by tighter UK rules

30 Mar 2016 Migration By Audrey Young
British High Commissioner Jonathan Sinclair is defending changes to skilled migrant rules for Britain but suggests they won't affect... more

Immigrants' attitudes to corruption worries SFO

17 Feb 2016 Migration By Sophie Boot
Feb. 17 (BusinessDesk) - New Zealand's record inbound migration has undermined the country's squeaky-clean reputation because of an... more

Travel

Jucy plans to expand pod-style hotel chain to Australia

16 May 2016 NZ Tourism
Article - BusinessDesk Monday 16 May 2016 12:20 PM Jucy plans to expand pod-style hotel chain to Australia in 2017 By Fiona... more

Budget 2016: Cycle trail funding boosts regions

16 May 2016 NZ Tourism
New Zealand Government Rt Hon John Key Prime MinisterMinister of Tourism 15 May 2016 Media Statement Budget 2016: Cycle trail... more

Sport

New Zealand’s ‘other’ national sport has its time to shine

16 May 2016 Sport
Kids' Lit Quiz New Zealand’s ‘other’ national sport has its time to shine Monday, May 16 2016: There’s no... more

Panthers match huge success for Christchurch

16 May 2016 Rugby League
Chambers PR Penrith Panthers v NZ Warriors May 15, 2016 Panthers match huge success for Christchurch The sold-out Penrith Panthers... more

Columns

Gordon Campbell on NZ’s support for the Kazakh dictatorship

16 May 2016 Column
Column - Gordon Campbell   Gordon Campbell on New Zealand’s support for the Kazakh dictatorship Thanks to Sacha Baron... more

Gordon Campbell on the future of conservatism

12 May 2016 Opinion By Gordon Campbell
    For years, observers have noted the contrast between Prime Minister John Key’s ordinary Kiwi bloke persona, and... more

Kiwi Success

New appointments to Vulnerable Children’s Board

12 May 2016 Appointments
New Zealand Government Hon Anne Tolley Minister for Social Development 12 May 2016 New appointments to Vulnerable Children’s... more

University of Otago appoints next Dean of Pharmacy

28 Apr 2016 Appointments
University of Otago University of Otago appoints next Dean of Pharmacy A leading researcher from Canada has been appointed as the... more

Recruitment

Zero-hour contracts gone, PPL extended

10 Mar 2016 Recruitment
New Zealand Government Hon Michael Woodhouse Minister for Workplace Relations and Safety 10 March 2016 Zero-hour contracts gone, PPL... more

Scheme helping to staff hard to fill positions

28 Feb 2016 Recruitment
New Zealand Government Scheme helping to staff hard to fill positions Health Minister Jonathan Coleman says an incentive scheme... more