How you can earn a fortune

People who put 'more money' at the top of their career wish list ahead of New Zealand's lifestyle benefits will have to search harder and smarter than those with other goals in mind, say recruiters and HR consultants.

New Zealand's low wage and salary situation (relative to the cost of city housing, inflation and international comparisons) is being felt more keenly as fuel and local body rates costs rise, and crucially, is not set to improve anytime soon.

According to Mercer 2006 Worldwide Pay Survey - and in line with predictions from the New Zealand financial sector - New Zealand's average pay increase across all sectors is predicted to be 3.8 per cent against a projected inflation rate of 2.8 per cent for 2006.

That one per cent 'pay above inflation' difference compares with a projected 1.5 per cent pay above inflation difference for Britain, 2.3 per cent for Singapore and 1.7 per cent for Canada. In Australia, the projection is 1.4 per cent.

Despite an unemployment rate of only four per cent, New Zealand's average gross national income of around $42,600 places it 21st in the list of OECD countries for gross national income per capita - and in 2005, New Zealand's average pay increase rate roughly matched its inflation rate.

Rising unemployment, lower business profitability, low labour productivity growth and the slowing economy are all predicted to lead to only moderate wage growth here by the end of this year. Public sector wage growth is expected to decline from 7.3 per cent in 2005 to the same growth rate as private sector wages of around 3.4 per cent, while the fall in the exchange rate and increases in oil prices are expected to keep consumer price inflation above three per cent.

Last month, New Zealand Council of Trade Unions president Ross Wilson said: "If we are to solve New Zealand's problem of low wages then regular increases above the level of inflation are needed. Government needs to increase the minimum wage to $12 an hour now, not in 2008, and employers need to get real about the need for regular wage increases for workers."

But it's not that simple. As Peter Harbidge, executive general manager for recruitment and HR consultants Hudson New Zealand says: "Without increased productivity, and with increased infrastructure [and compliance] costs, employers are in a very tricky place in terms of ensuring the resources they have are used in the wisest way whilst remaining [profitable]. Training, flexibility, career development and all the other things today's employees expect, cost money."

Supporting this view, the annual MIS Top 100 survey found that while staff recruitment was the number one concern of IT executives in New Zealand's largest organisations, lower productivity and profitability had led to cost cutting which severely affected the ability of organisations to pay IT staff more.

Perhaps fortunately for employers, if essential needs are being met and a candidate is not on the poverty line, wage and salary concerns are being placed further down the career wish list of the youngest and oldest employees.

While the 2004 annual Hudson Salary Survey found 23 per cent of respondents cited 'more money' as a primary career goal, by last year this had dropped to just nine per cent of respondents and new primary career goals made an appearance.

These included 'making a difference' (12 per cent) 'peer recognition' (11 per cent) and 'retiring early' (12 per cent). Somewhat predictably, mature age workers across New Zealand rated 'new challenges' and 'less commuting time' above 'more money', with other desires a friendly work environment, recognition, the ability for staff to work from home, and flexible working hours.

With more women in the workforce, and employer's keen to hold them with flexible maternity leave and part time work, women are also placing flexibility, performance and progression before straight remuneration.

But if more money is important to you, which industry sectors are paying well? This all depends on your definition of 'well'. Most entry level professional marketing, sales and accounting positions pay between $30,000 and $35,000 (for entry level IT positions, add $5000). After tax, that's enough to cover a meagre rental living for a family or shared accommodation for a young person, but it's not enough for serious savings or home ownership in a main New Zealand city.

Once entry-level positions are surpassed salaries rise, but professional ceilings remain alarmingly low: for example, a survey conducted by seek.co.nz and Robert Half recruitment has found New Zealand sales and marketing positions pay between $40,000 and $80,000 for experienced account managers and up to $150,000 for national sales and marketing managers.

Communications managers earn between $60,000 and $80,000. Liza Viz, regional recruitment practice leader for Hudson, says salaries for logistics, procurement, and purchasing administration roles, which include account administrators and credit controllers, start at around $30,000 and peak at $55,000 - still insufficient for people facing an Auckland mortgage of more than $300,000, or those struggling to pay off a student loan or raise a family.

"About 18 months ago there was a bit of a panic around candidate shortages and salaries increased [slightly], but there has been a levelling off as employers realise they can't increase wages any more," says Viz.

However, it's not all bad news. Recruiters say the IT sector has a shorter time ramp to higher salary levels, and average annual pay rate increases are higher for professional careers than the national average across all occupations and sectors (between five and eight per cent compared with three per cent).

Salaries for human resources positions have been raised by a higher percentage than any other sector over the last 12 months, and although the average ordinary-time-hourly wage rate for the public sector is higher (see the side box), because public salaries are normally capped, the private sector is more lucrative in the long term.

When it comes to the really big money, remuneration specialists say wages and salaries between $150,000 and $200,000 are typically only available to the self-employed in New Zealand, or those in 'C-level roles' - board members, CEOs, CFOs, CIOs and country managers for international corporations.

"These salaries require at least 10 years experience in the same industry and the individual is going to need a significant record of achievement," says Harbidge.

Recruiters says the best-paying jobs available in volume in New Zealand usually occur in sales, and particularly in positions that often offer a variable commission package or fringe benefits such as super payments, a company car and medical insurance, above a base salary.

However, Harbidge says whether candidates will take a lower base salary for a higher commission component depends on their psychological makeup and financial status.

"If you have two mortgages or a family you will want a [package] with less risk," he says.


What we earn

Non-sector specific

* The minimum wage is $10.25 for people 18 years and over and $8.20 for 16/17 year olds and trainees.

* The average ordinary-time-hourly wage is $19.43 for the private sector and $26.92 for the public sector (however, public sector salaries tend to be capped).

* For females, the average ordinary-time-hourly wage is $19.97; for males it is $22.92 an hour.

* The average gross weekly earning for full time New Zealand employees is $826.08. When full time and part time work is combined, the average is $703.97.

* In the year to March, wage percent increases were driven by increases in earnings from sectors including transport, storage and communication (up 22.8 percent); health and community services (up 10.1 percent); and property and business services (up 5.9 percent).

Source: Statistics NZ Quarterly Employment Survey, March 2006


Who pays what

Sales and marketing: SEEK salary centre

Construction, Resources & Mining, Logistics & Procurement, Legal, IT, office support, banking and finance, HR and sales and marketing: Hays Salary Survey