Show me the money and the perks

Employers are being warned to expect the current tight labour market, which is making it increasingly difficult to recruit and retain staff, to continue for the foreseeable future.

"We are on the cusp of a skill shortage and labour shortage," Employers & Manufacturers Association (Northern) employment relations manager David Lowe said.

"And not just at the very top levels. We are talking about people with good, solid skills such as tradespeople.

"I think the natural state of the New Zealand labour market is one of being quite tight. This is what the labour market looks like for the foreseeable future. That's the advice we're giving businesses."

Not surprisingly, that shortage is pushing up wages.

The latest EMA National Salary and Wage Survey showed that it wasn't just the bosses who got the big pay rises over the year to August.

Although managing directors of companies with 50 to 199 staff did very well for themselves with average pay rises of 9.5% for the year, they were eclipsed by shop assistants, who achieved average pay rises of 9.9%.

Other jobs which provided pay rises well above the average 4.5%, were registered electricians (9.2%), registered nurses (9.1%), diesel mechanics (8.4%) and general clerks (6.3%).

However, that may be just the tip of the iceberg.

A survey of pay and conditions by remuneration consultants DSD Consulting showed that companies were having to do much more than just increase pay to attract and retain staff.

The survey of 65 organisations, ranging from corporates like Air NZ, ASB Bank, Farmers Trading and Fletcher Building, to law firm Kensington Swan, TVNZ and the NZ Fire Service, found that the non-pay benefits companies provided were often the determining factors in how well they retained staff.

"Pay is not the answer any more," said DSD director Susan Doughty.

"Employees are being more proactive about going to employers and asking `Hey, what will you do to retain me?' And employers are realising that they can't even get people to come and answer their advertisements any more, so they are asking themselves what they can do to retain people.

"Pay is still fundamental and the expectation by employees is that it will be set at a level that is equivalent to what other companies are paying and employers need to get that about right.

"But what's going to attract and engage and retain people is a compelling offering that looks at all the factors, both financial and non-financial, that are going to press people's buttons."

These could include:

Training and career development.

Flexible working arrangements.

Career breaks such as sabbaticals.

Extra parental leave.

Onsite facilities such as a gym, massage service or childcare.

Duvet days to help manage stress.

The increasing importance of non-cash benefits is reflected in the Labour Cost Index compiled by Statistics New Zealand. This shows that in the year to June, salary and wage rates rose by 3.2%, while non-wage labour costs rose by 8.1%.

One of the companies facing a constant battle to get the staff it needs is Auckland-based software developer Orion Health. The company exports its health sector management programs around the world, employing 190 people in this country and another 85 overseas.

And rapid growth means it constantly needs to recruit new staff as well as retain the ones it already has.

Orion chief executive Ian McCrae said it was becoming more difficult to fill vacancies across the board, from specialist areas such as computer science and engineering to administration staff.

On top of that, the company faced a constant threat of key staff being poached by competitors.

"We pay more than the market average, but we still lose the occasional person because another company will have a massive problem and will pay an astronomical rate to solve it. We've had instances where people have left us for double what we've paid them," he said.

"Sometimes we have to outsource work to consultancies because we can't find the people to do it ourselves."

And that could be a very expensive option.

Orion provides benefits ranging from fresh fruit in the office to high-quality ergonomic designer furniture, to offering flexible hours.

And if staff wanted to travel, Orion would try and arrange jobs for them at its offices in Australia, the UK or Spain, which would broaden their experience and allow them to return to this country after a couple of years.

However McCrae believed the most important element in retaining staff was making sure their job was as stimulating as possible.

"We try and make the office accommodation as attractive as possible, but what staff really like to do is work with the newest technology and do really innovative things.

"So we try to ensure they are doing that because it's the quality of the work they do which often determines whether we keep or lose them," he said.

"So generally we try and promote internally and our people get pushed up pretty quickly."

And McCrae doesn't see the situation changing.

"I don't see it improving. There's a possibility it could get worse.

"It's not getting any better, that's for sure."

 

- © Fairfax NZ News