Inbox: Pay pressure piles up

Salary expectations are growing source of tension between businesses and employees, according to Hudson’s “Salary and Employment Insights 2012” series of reports.
“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 of Hudson New Zealand.
“Facing the tension of trying to do more with less is especially difficult when salary is the top driver for 36 percent of employees, with many believing that it will be ‘easy’ or ‘very easy’ to find 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 percent of employers intend to increase permanent staff levels. Candidates with business acumen, 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 major driver of business performance.
Almost half of hiring managers report the salary expectations of preferred candidates exceed their budget, with 43 percent increasing their budget to secure the best candidate, and the remaining employers settling for their second choice. Furthermore, about six out of 10 employees feel that they deserve pay rise in 2012.
“Salaries are increasing, particularly for talented mid to senior hires,” says Rogers. “In challenging times, businesses can’t afford to compromise on investing in their people, but at the same time they face 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 percent) 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.