KEY POINTS:
With increasing financial pressures from interest rate increases and encouragement from the Government to join Kiwi- Saver, hard-pressed workers may be forgiven for looking to their employer to help out.
However, one pay expert says pointing to an increase in the cost of living when asking for a salary increase won't wash. He says employees have to be smarter than that because the financial pressures faced by workers are the same as their employers.
Jarrod Moyle, manager of reward practices at recruitment firm Sheffield, says while there has been "significant inflation increases", the cost of doing business has also risen.
"While an employee might feel they are entitled to a pay rise, they need to treat this with caution because there are many businesses who simply haven't got the money to pay any more," he says.
"There is a significant amount of tension out there. We know a lot of employers who are saying they are finding it difficult right now.
"The KiwiSaver dimension is one thing and on top of that there have been higher than normal pay increases, in part due to the minimum wage. And for companies in exporting there is the added pressure of the exchange rate."
Moyle says because of these pressures there is the prospect of job losses, which is the last thing any employee wants to hear. He says: "There are going to be some organisations feeling the squeeze and employees need to be aware of that."
But it's not all bad news. There is a tight labour market affecting many industries and Moyle says those who can show they have taken on more work or have more responsibility - compared to the last time they got a pay rise - can put forward a better case for financial recognition.
Gerard Mackle, Auckland manager for IT&T at recruitment firm Hudson, agrees, saying staff need to look at anything extra they are doing, anything that adds value to the organisation and scrutinise their key performance indicators (KPIs) to check they are on target before demanding more cash.
"Performance reviews set the benchmarks for employees in most firms," he says. "I would advise people to go back and review the discussions they have had about their KPIs and see if they have met the agreed goals.
"That is a measurable way of saying I have done what I said I would do." An employee would also need to point to their job description and highlight anything extra they are doing.
Like Moyle, Mackle says telling your manager you need a pay rise because of inflation is not compelling, but what can count is the employee's value proposition on what can they add to the business.
Mackle says: "They need to remind their manager of their successes and perhaps ask if there is room for some form of bonus scheme.
"That would be a creative way of negotiating a rise that would be linked to a specific task."
And what Mackle doesn't advise employees to do is to play their employer off against a job offer: "In this tight labour market the recruitment industry is seeing good candidates applying for jobs knowing they will get somewhere along the track. And when they do, they go back to their employer asking for a pay rise to stay. It's a trick an employee can only do once and they may not get away with it. Their employer could cut them off from further training or promotion."
- Extra, HoS
