Slim pickings in next pay round

Two-thirds of employers will give their staff a miserly increase of 3 per cent or less in their next review.

House prices are up, rents are up, even the price of avocados is up, and to ease the pain of inflated outgoings you may be hoping for a nice fat pay increase in your next review.

Unfortunately, according to the annual Hays Salary Guide, this will be the reality for only a fortunate few. In fact, two-thirds of employers will give their staff a miserly increase of 3 per cent or less in their next review, and 5 per cent of employers will not increase salaries at all.

The news is slightly better for those working for the 22 per cent of employers who are set to award an increase of between 3 and 6 per cent, and the big winners will be the few lucky employees whose employers will award increases of more than 6 per cent, but these generous businesses are thin on the ground.

The Hays Salary Guide is based on a survey of more than 500 organisations in New Zealand, representing almost 187,000 employees, as well as placements made by the recruiter. The latest guide shows employers have a generally positive outlook, yet remain cautious on salaries.

"Employers tell us they expect business activity to rise and plan to increase permanent and temporary headcount, yet they remain cautious on the salary front," says Jason Walker, managing director of Hays in New Zealand. "At the same time, candidates are aware of the improved economy and the opportunities out there and are actively seeking new roles. When you add snowballing skill shortages, sedate salary rises seem at odds with the trends."

One explanation for the mystery of tightfisted pay increases in a flourishing economy is the prevalence of non-salary benefits increasingly being offered to staff as demand rises for a healthier work/life balance and opportunities for career growth. Flexible work hours are now available to 72 per cent of employees, and more than half receive ongoing learning and development. It's common now for businesses to offer health and wellness programmes and career progression opportunities, all of which have a value that can be hard to measure in monetary terms.

Mixing this up with salary packaging that doesn't appear in the bank account but has a monetary benefit, further muddies the waters. The most common benefits offered to employees are private health insurance, parking, "above mandatory" superannuation and bonuses. More than a third of companies offer more than 20 days' annual leave and 32 per cent give financial support for study, according to Hays. Some employers now offer a negotiable "salary sacrifice" arrangement where employees can negotiate custom non-salary benefits such as gym memberships or special leave.

The industries with the highest demand for skilled workers are likely to give the most substantial increases, according to the latest Global Salary Survey by Robert Walters NZ. The most sought-after workers are in accounting and finance, banking and financial services, business transformation, human resources, information technology, legal, procurement and supply chain, property management, sales and marketing, and business support. There is particular demand for people who can gain insights from the "big data" generated by digital processes.

Although many skilled professionals will be in for a shock at the low rate of pay increases, it appears a substantial number of the working population are actually of the "glass-half-empty" persuasion, as a quarter of employees surveyed by Hays don't expect any salary increase in their next review.

"For these people, any salary increase will come as a good surprise," says Walker.

"On the other hand, of those who do expect an increase, a significant portion will be disappointed. Sixteen per cent are hoping for more than 6 per cent, and only 7 per cent of employers will be offering this level of increase."

If this sounds disheartening, consider the disappointment experienced by the 14 per cent of people who summoned up the courage to ask for a pay rise last year -- but were declined.

Encouragingly though, 18 per cent asked for a pay rise and were successful.

"As the old adage says, fortune favours the brave," says Walker.

Industries with the highest demand for skilled workers are likely to give the most substantial increases.

What to do when asking for a pay rise:

*Have a good work record for dependability

*Show initiative

*Pick the right time to ask

*Be prepared

*Know the market value of your job

*Check against advertised jobs at a career board

*Sell yourself

What not to do:

*Overvalue your worth

*Be unreliable

*Threaten to quit