Mood of the Boardroom: Wage and salary packages set to rise

CEOs were asked: "Are you looking to increase wage and salary packages across the board "to retain staff and ensure they are fairly remunerated, rather than relying on low cost labour?"

A considerable 75 per cent of respondents say yes, 19 per cent say no, and 6 per cent are unsure.

One director says salaries at the top end are up due to a shortage in the labour market.

"Overall, wages are also up," she says. "We need to focus on making wages in some professions that are key to our long-term success (such as teachers and nurses) much higher."

Beca's CEO Greg Lowe says we need to return to the 'critical skills' approach we had before the pandemic, allowing a range of skills into the country that will help grow the economy and also help train more New Zealanders.

"The current approach is too restrictive and is leading to skill shortages that will reduce opportunities for New Zealanders because it will stifle growth," he says.

Some respondents disagreed with the thrust of the question.

"You can't GET labour in ALL industries," says NZ Local Government Funding Agency chair Craig Stobo.

"Businesses are all fishing in the same local pool. In the absence of capital substitution/productivity changes, wages have to rise. Not all businesses have profit margins to afford this and will have to close."

Says Tower CEO Blair Turnbull: "We don't rely on low-cost labour. We actively support paying a living wage across all our employees."

"This is a serious issue — and forcing wage inflation through New Zealand businesses at pace," adds another director.

Agribusiness has been NZ's hero industry during the pandemic.

An executive in the dairy industry says it is an industry that pays well. "It is not about low-cost labour as all workers are subject to minimum wage rates when working in New Zealand.

"Increasing pay rates to pick kiwifruit (for example) still won't attract people who don't want to do that work. The work is there now and the rates are fair for the work required."

Director Rob Fyfe says low-cost imported labour has never been relied on in the wine industry. "It is not lower labour cost that makes RSE workers attractive but rather their skills and higher productivity levels. As a result, our imported RSE seasonal workers are paid well above New Zealand living wage levels. They've also allowed us to expand production and create additional all year round higher-skilled and added-value jobs in the winery and along our supply chain, which are filled by New Zealanders."

Another director, Cathy Quinn, agrees: "I believe we need to build MIQ facilities outside Auckland so we can bring in Kiwis wanting to return home as well as workers to support the horticulture, agriculture and other industries. If these facilities were outside Auckland we would hopefully avoid lockdowns which cost our economy significantly — let alone the impact on the wellbeing of those going in and out of lockdown.