30 Jan 2022

'The shoe's on the other foot' - demand for workers spurs moves for more pay

5:40 pm on 30 January 2022

The low unemployment rate and high inflation is prompting jobseekers to ask for more money from current and prospective employers.

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Trade Me says job advertisements have increased for all sectors except property and architecture - with record listings in 2021. Photo: 123rf

During December and January Frog Recruitment has had contact with many more people considering changing jobs than usually during that time, managing director Shannon Barlow said.

And many employees have been raising their asking price.

Barlow said job seekers realise the power dynamic has shifted, and they can afford to ask for more.

"Job seekers are realising that actually, we're in a talent shortage, it's really hard to find good people. So the shoe's on the other foot - I can afford to look for different options and to ask for what I'm worth.

"Advice that we give to job seekers is to expect at least a payrise of at least 5 percent, it wasn't unusual to see increases of up to 40 to 50 percent."

Interest rate rises should lead to pay rise requests - analyst

Expat and Singapore-based financial analyst Jeffrey Halley said globally, increased interest rates and higher costs for basic items should prompt workers to consider what they're worth and take action.

Halley said after a visit home to New Zealand in recent weeks he was shocked at how expensive the cost of basic items had become.

"I was very shocked at how expensive things have got, and the cost of living for just small things has risen markedly.

"There will be pressure for that to be reflected in higher pay - it'll be interesting to see how that plays out."

Halley said it's likely increased interest rates will make an impact for some time.

"When we look at the data coming in and the forecast from the OECD, the World Bank and other suchlike organisations, they are all predicting that inflation will peak somewhere around the mid-year and then start tracking down gently.

"I do believe that post-pandemic we're going to be in more of a 90s scenario rather than a 2000s scenario, where inflation is going to be elevated for quite some time."

If wages don't go up, it won't just be individual households that feel the impact, it could cause more far reaching problems, he said.

"The people that get hurt in scenarios like this are people on lower and middle incomes, because inflation and high prices erode their ability to spend.

"When you see that happening on a wide scale you're usually saving up social problems further down the track. So it'll be very interesting to see whether wages move to reflect this.

"If they don't, it'll probably end New Zealand's inflation issue faster rather than later, because we would probably move into some sort of recession scenario."

Trade Me reports record job listings

Trade Me Jobs sales director Matt Tolich said employees considering bettering their working conditions or pay hold a stronger position in the market than ever.

"2021 was truly the year of the job hunter, with record-breaking listing numbers and salaries... this is still very much the case as we enter the new year. We're still facing a massive candidate shortage which will not be alleviated until the borders are open again.

"Job hunters are still very much in the driver's seat. There has never been a better time for Kiwis to check out the market and explore their options, or ask for a pay rise."

During 2021 job listing numbers with the site increased by 51 percent compared with the year before, and the national average salary went up 5 percent.

"2021 was a remarkable year... listing numbers outperformed the most optimistic of predictions made at the beginning of the year," Tolich said.

The highest demand was for workers in science and technology, accounting, automotive, customer service, and human resources. Whereas architecture and property were the only sectors where demand for workers decreased.

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