Written by Mike Boneham on November 20, 2019.
For the first time, accurate remuneration data is available around Pacific Island pay and organisations are using it to improve their HR practices.
Achieving fair and attractive levels of pay in many Pacific Islands has historically been difficult for employers due to a lack of accurate market data within each industry. However, as new remuneration data surveys are achieving greater input than ever before and categorising remuneration into both bands and job pathways, employers are subsequently improving pay frameworks. Couple that with minimum wage increases across many Pacific Islands and the remuneration landscape is changing.
Typical Problems Pacific Island Employers Face
Employers in the Pacific Islands face a number of difficulties in determining appropriate remuneration rates and ensuring they remain attractive propositions for workers of all skill levels.
Unique market conditions
Larger organisations may operate across a number of Pacific Islands. However, each country has its own laws and presents unique market conditions. Employers have sometimes assumed that what worked in one Pacific nation will work in another, but because of the different laws, economies and industries at the forefront of each country, it's not as straightforward as they might hope.
Lack of accurate and reliable remuneration data
Across the Pacific, current HR and remuneration practices are suffering from a lack of resources which means there is a lack of accurate data around remuneration within each market. Alongside this, some countries have very small data samples and so there are not enough data points to draw useful conclusions.
Historic skill shortages
Remuneration data aside, many of the Pacific nations are crying out for skilled people, with the finance and IT industries in particular generally having a substantial recruitment problem across the Pacific. While we've recently seen a number of nations recruiting from Fiji, particularly within finance, there still seems to be a widespread shortage for people in these roles, which cannot be fixed by exchanging skilled employees between the islands.
Minimum wage increases
More recently, minimum wage increases across many islands is having a direct impact on remuneration practices for many organisations. Countries such as Vanuatu, the Cook Islands and the Solomon Islands have all recently increased minimum wage rate. Some islands employ a lot of people at the minimum wage level because they have a comparatively big populations and have many large organisations which employ people in very labour intensive roles. For these companies, a minimum wage increase has a significant impact.
Competition from countries such as Australia and New Zealand
While the minimum wage is improving, Pacific employers are still losing skilled people to countries like Australia and New Zealand, which offer significantly higher wages. It's not just highly skilled individuals leaving, a lot of mid-skilled people are also taking advantage of work opportunities abroad. There has always been a labour drain to New Zealand and Australia around seasonal work such as fruit picking and this continues to be the case with recent minimum wage increases in New Zealand where the Pacific Islands just can't compete.
Pacific organisations are trying to combat this by organising job shares with companies in Australia and New Zealand, allowing employees to spend time in another company within their industry and gain extra skills. However, losing valuable people to other countries is still a significant problem for Pacific Island companies.
Enabling Employers to Offer Better Conditions with Reliable Market Data
For the first time, significant numbers of organisations are contributing to remuneration surveys and allowing specialists like Strategic Pay to generate accurate, meaningful remuneration insight for the Pacific Islands. As a result, widespread data is providing a much stronger frame of reference for both employers and employees, helping to ensure people are paid appropriately.
Part of the reason that the newly available Pacific Island remuneration data is proving such a powerful catalyst is that it enables HR executives to use a tried and tested banding system without being trained in job evaluation. The published data is already split into a banding system for each country, having being collected by Strategic Pay and being backed by a certified job evaluation methodology.
To make it even more meaningful, the data is split into job pathways, such as technical or customer service. This means that even where two employees might fall into the same band, they're still categorised differently so that the data more accurately reflects individual industries.
Employers are able to understand if they are over or underpaying and adjust their recruitment and retention strategies accordingly, ensuring they get value for money and retain key staff. Moreover, organisations are starting to use this data, combined with guidance from Strategic Pay, to be trained in and use job evaluation and create remuneration policies. These policies cover how people are remunerated and why they're remunerated at that level - a first for many organisations. HR staff are upskilling, receiving training in job evaluation with courses re-running due to demand. There's a real thirst for knowledge from HR teams wanting to improve their practices.
This is good news for employees too, who benefit from more transparency around what constitutes fair pay and how their employers stack up. They know whether they're being paid fairly and what their skills are worth.
Using Industry Specific Remuneration Data
If your Pacific Island company could benefit from this type of insight, contact Strategic Pay today. We've carried out extensive surveys in the region, and are now offering relevant training and insights, tailored to individual organisations by dividing our data according the industry and roles required to help companies get real value.