Salary increases back on the agenda

• 44% of white collar employers will be raising salaries in the next six months
• However, 85% of salary increases will be confined to the 2% to 4% range
• Businesses will need to align their investment in people with business critical skills
• More than half of the companies hiring new staff are focusing on front line positions

Salary increases are back on the agenda as an employee retention strategy, according to a survey conducted by global recruitment firm Michael Page International.

The Michael Page Salary and Employment Forecast, which incorporates the responses of over 200 companies from New Zealand’s corporate sector, reveals that 44% of white collar employers will be raising salaries over the next six months.

“During the economic downturn many employees were asked to cope with increased responsibility and work volumes without a review of salary. Now that business conditions are improving, companies are in a better position to financially reward these employees for their contribution to the business,” said Pete Macauley, Associate Director of Michael Page New Zealand.

Whilst there will be a widespread review of white collar salaries as we move into 2011, the vast majority of increases will be confined to the 2-4% range.

“It is essential that companies focus their spending on rewarding and retaining top performers with business critical skills. Now that the employment market is recovering, these employees are less cautious about a career move and will be actively looking for new opportunities. Employers that fail to address this situation risk losing their most experienced and capable people at a time when their skills are crucial to help drive business forward,” Mr Macauley said.

Of the companies planning to increase headcount over the next six months, 58% will be focusing on front line positions in areas such as sales, account management and customer service.

“Based on our experience of previous business cycles, investment in front line positions occurs in the initial stages of recovery as companies look to increase revenue and gain market share. We expect this demand for front line professionals to continue and filter into the need for back office and operational personnel as we head into 2011,” Mr Macauley said.

For more information visit http://www.michaelpage.co.nz/