Let's assess the findings of our 2016 remuneration survey before jumping into remuneration trends for 2017 and what this means for your organisation.
A brief review
Last year, New Zealand maintained a solid momentum within its economy. At the same time, global uncertainty persisted and the demand for skilled labour remained high despite strong migration levels.
With the government forecasting a surplus of $1.8 billion for the year ending June 2016, low inflation and rebounding dairy prices suggests we might see continued infrastructure investment and increased debt reduction.
Talking numbers for 2017
Salary projections for overall payroll increases are set to rise by 2 to 3 per cent. As would be expected, the private sector will see higher increases than the public sector, with general staff projected to get a pay rise of 3.1 per cent compared to 2.0 per cent, respectively.
Interestingly, middle and senior management employees lead the public sector with an average 2.1 per cent salary increase, followed by general staff with 2.0 per cent and CEOs with 1.8 per cent. Conversely, we expect general staff in the private sector to get an average pay increase of 3.1 per cent, followed by senior management and CEOs at 3.0 per cent, tailed by middle management with 2.6 per cent.
In terms of bonuses and incentive payments, there is a 17 per cent difference between general staff and the executive suite in terms of bonuses. As such, general staff are likely to receive 6 per cent on their base salary, middle management 11 per cent, senior management and leaders of small enterprises 21 per cent, and CEOs and general managers of medium to large organisations 23 per cent.
What does this mean?
Despite the strong economic position we find ourselves in, the housing market is still putting immense pressure on most regions. Leading from this, it's becoming more important to invest in training, development, attractive remuneration packages and benefits - something a survey Strategic Pay conducted last year suggests organisations are prioritising already.
With 82 per cent of survey participants offering a work-life balance initiative, 2017 is set to see some interesting and new approaches to combining remuneration and employee satisfaction.