Top employment and remuneration trends for 2018

Policies unveiled by the new coalition Government could have an impact on the employment and remuneration sector, writes John McGill. 

It’s hard to believe that 2017 is almost over. The year seems to have flown by and before we know it we’ll be turning over the calendars to 2018, setting a new range of personal and professional goals for the months ahead.

Of course, the new year is always rife with new trends and influences. Here are two of the top issues that might affect trends in the employment and remuneration sector.


The impact of the new Government

With Winston Peters deciding to put Jacinda Ardern into power, there could be a number of effects on the employment and remuneration sector. While the coalition is still in its infancy, certain polices have business leaders ready to respond.

The major pressure point is around increasing the minimum wage, with Labour lifting it to $16.50 an hour next year and to $20 by April 2021.

There is a bit of initial reaction to this from different groups in terms of the cost and impact on small to medium-sized businesses or organisations with low-wage workers.

It could end up being quite expensive for small businesses where they have to move employees that are on around $32,000 a year to $40,000 within three years. That’s a 20 percent jump and much higher than the one to two percent for wage increases that we, at Strategic Pay, are seeing. 

Labour has also indicated its aim to review the Trans-Pacific Partnership (TPP). The 11-country agreement has wide trade, business and economic benefits, but if New Zealand was to make changes or pull out (like the United States has), it could impact local enterprises.

If the countries can get TPP through without too much damage to it, perhaps only changes around foreign ownership, maybe it won’t make a lot of difference.

This is one trend that we will be keeping an eye on.


Ongoing impact

Earlier this year, the National Government announced a $2 billion pay equity settlement for 55,000 care and support workers. Depending on the individual’s qualifications/experience, workers could receive a pay rise of between 15 and 50 percent. This was very expensive for the Government and has now set a precedent for other industries.

We believe that this trend will spread as workers in other sectors might look to improve their remuneration and conditions through government action.

The social, economic and political landscape is changing in New Zealand, so watch this space on the impact on employment and remuneration.


John McGill is the CEO at Strategic Pay.


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