Be well prepared and well informed before asking company to pay up.
"I've been working for the same company for the past 10 years," says Mandy, who works in the financial sector.
"I've done a really good job and helped the company go from strength to strength, but my salary has stayed relatively stagnant. I have not had an increase for three years now."
Mandy says she thinks it's time for New Zealand employers to start paying people what they're worth.
"My company makes a good amount of profit, and it's feeling like it's at the expense of the employees. I will be having that difficult conversation soon - pay up or I'll leave."
Fifty-four per cent of skilled professionals say they intend to ask for a pay rise in their next review, with another 22 per cent considering doing so, according to findings in the recently released Hays Salary Guide. The problem is, this follows news that the salary increases employers intend to offer this year can best be described as "sedate", according to Hays.
Jason Walker, Hays managing director for NZ, says it's looking like in the near future the number one challenge for businesses will be skills shortages. The America's Cup win will require more skills for infrastructure projects, and the intention to cut down immigration means fewer people to do that and other work.
The employment market is tipping in the favour of candidates, Walker says. "However, this isn't having a big impact on salaries coming through - not yet, but it will."
He says it's not a balanced market in terms of people who are getting salary increases. The demand for talent is for people with certain skills and qualifications, who can add value from day one.
"They're the ones who can help the company generate income and build revenue streams. As an example, engineers in consultancy work who are doing investigations in Wellington after the earthquake and those who are doing design work for the larger infrastructure and commercial projects are seeing an increase in their salaries. Same goes for architects.
"We've also seen significant increases for software developers and IT experts and, in particular, those who are mining data, but we're not seeing much change in other skilled areas and semi-skilled areas.
The reason could be threefold.
"Firstly, technology has taken over a number of those roles - if your position can be taken over by technology, it's unlikely it will be in demand or that you'll get an increase."
A lot of high-volume work, such as claims work, has been sent offshore. "Where it's trades and labour, salary increases aren't coming through because the jobs that are happening now were priced 18 months to two years ago. If higher salaries come in, the margins for the company become really tight.
"That's why there's a disconnect between employers and employees on salaries. Think of airport check-in jobs, supermarket teller jobs and others that are being replaced with technology - there salaries are not moving. It's causing resentment - the rich getting richer and the poor being replaced, but it's really because of technology."
Advice to employees who want to get an increase would be to firstly recall when they last got a salary increase.
"If your last increase was 18 months ago, a conversation may work for you."
Walker says it's important to do your homework - know what your job is worth in the market. Usually there's a salary band. It's possible to find this information online. "Know what the standard income is for your job - what the band is, and where you fit in that band.
"You need to be well prepared and well informed. Be prepared to tell the company what you've done to add value to the company, know what the market is paying, and when you last got a pay rise. Be realistic - in the past five years, increases have been low and limited. They'll still be sedate in the next 12 months - two thirds of organisations will be increasing salaries by less than three per cent."
He also says changing jobs to get an increase may not be the way to go. "It may not be just about the money - your company may be giving you a lot to help you with future earnings, such as providing professional development - or you may be in a company that encourages good life/work balance and you're doing interesting and exciting projects.
"Be careful with changing for a higher salary - make sure you're not going down as far as value is concerned. A salary can be short-term while career development can help you through your lifetime.
"However, if you're feeling disengaged from your job and the organisation because you're sure you're not being paid what you're worth - then yes, it's probably better to go looking for something else. Sit down and have a conversation first.
"The market is improving, 48 per cent of businesses will be increasing their head count, so there will be more opportunities."
Of employers, Walker says, they need to take salary talk seriously, particularly if there's been little movement in their organisation for a long time.
"Staff are aware that the market is improving and they'll consider leaving. There has already been an increase in staff turnover.
"Some businesses in a strong market go backwards because they lose top talent."