So, where's the payoff ?

23:56, May 16 2014

Financial experts predicted 2014 would be a golden year for the New Zealand economy.

In January, Finance Minister Bill English said that workers should be rewarded for their efforts after years of belt-tightening. The Labour Party added that workers should expect pay rises of about 4 per cent this year. And Labour MP Andrew Little said that if workers did not get pay rises, it would suggest employers were not passing on the benefits of the boom.

Fast forward to May and drivers at Toll Carriers in Whangarei, workers from Steel & Tube across the country, logistics officers from the Lyttelton Port of Christchurch (LPC) and hospital maintenance and distribution staff in Canterbury are all striking or threatening to take action to obtain a pay rise. All were offered pay increases below 3 per cent.

Union organisers say rosy predictions have given false hope to employees across the board, and recruitment agencies warn that employers might "learn the hard way", with employees jumping ship if they do not see their salaries rise.

"The reality is that workers are not getting those sort of wage increases," First Union organiser Jared Abbott says.



Hudson recruitment executive general manager Roman Rogers says New Zealand employees were "very supportive of their organisations" when the global financial crisis hit in 2008.

"Employees were not demanding in terms of pay increases because they knew [their company] was going through tough times."

When it became clear in the second half of last year that the future looked more promising, employees expected to see an end to the belt-tightening.

But companies "have been inconsistent", and wage and salary rises across the board are only slightly above inflation, Rogers says.

"Even though businesses are getting in better shape, they are still very much focused on managing their costs."

This inconsistency, along with reports of a booming economy, has led to workers around the country taking action.

Karl Andersen, from First Union, says unions have seen a spike in industrial action over the past few months.

In an ongoing dispute over pay, 47 Canterbury District Health Board staff this week gave notice of planned industrial action, after they were offered a 0.8 per cent increase.

Meanwhile, pickets at BP service stations in support of striking Northland Toll/BP drivers have spread nationwide this week.

Supporters took the protest to BP's headquarters in Wellington and at service stations in Auckland and Christchurch.

They want a "decent pay increase", First Union's Abbott says, and big oil companies can afford it. "Senior management and chief executives don't bat an eyelid if they get a 10 per cent to 30 per cent pay increase on already ridiculous salaries, while low-paid workers have to fight to get anything upwards of 3 per cent."


To add insult to injury, the gap between top chief executives' pay and the staff they manage is growing.

Last year Fairfax's annual survey of pay rates at listed companies revealed the average pay of chief executives in 2012 was 26.4 times that of the average employee in the same companies. That was up from 22.5 times in 2011.

About 75 per cent of the companies surveyed paid their chief executives more in 2012 than in the previous year. Pay rises for staff were on average lower than those for chief executives.

The widening gap breeds discontent. Lyttelton Port logistics officers David Craig and Ben Gallagher went on strike earlier this month, demanding their "fair share" of the port's $17 million profits. They pointed at chief executive Peter Davie's $1m plus annual salary and asked for a 4 per cent pay rise. "We just wanted a fair bite of the apple," Craig says.

Davie rejected striking staff"s claim that they should share in the rising fortunes of the company and offered a 2.85 per cent increase, which was just above Canterbury's inflation rate of 2.4 per cent.

"Different people are rewarded for doing different things. That's an irrelevant argument if I'm quite honest," Davie said at the time of negotiations.

The statement incensed Craig, Gallagher and their colleagues. They said increased profits had happened through more work, more stress, and longer hours across the board.

"We've taken on a lot more work since the quakes and this has resulted in a higher turnover."

The negotiation ended last week with a promise from management to renew the 2.85 per cent pay increase for the 11 logistics officers next year.

Data provided by First Union this week shows ANZ chief executive David Hisco was paid 120 times more than a teller at entry level, and 81 times more than an experienced one. At BNZ and Westpac, chief executives were paid 49 and 56 times more, respectively, than an experienced teller.

Employees from the Briscoe Group, speaking anonymously, say the starting wage there is 30 cents above the minimum rate, and most sales assistants' wages are between $14.55 and $16 an hour, even with long service.

At the other end of the spectrum, Briscoe chief executive Rod Duke's salary has almost doubled over the past five years. The company's latest annual report shows Duke was paid $891,000 for the year ending January 2014. In 2009, his pay was $458,000.


Even the booming sectors do not seem to increase workers' wages much.

A senior personal banker at ANZ in Auckland, who asks not to be named, says bank profits are sky high, but that does not mean employees get more.

"People are asked to do more and more work each year for the same money," he says.

Fewer employees are having to do more work under increasing pressure while salary rises remain just above inflation.

"Profits keep growing and growing but we are still fighting to get increases of about 2 to 2.5 per cent. Some people are fed up and are leaving the industry because of the extra pressure."

Ron Angel is in charge of the construction sector at EPMU and says wages in Canterbury's construction industry have gone up only in areas suffering skills shortages.

Employees did not see such increases in other cities, and most Cantabrians working in construction still had to fight to get raises.

"In Canterbury, we're not seeing employers dishing out bucketloads of money to our members. We're still going through hard negotiations every time."

Jason Walker, managing director of recruitment agency Hays New Zealand, says high pay rises are still the exception and are in highly demanded roles in IT, commercial construction, sales and marketing, and engineering.

Employers remain cautious, he says. Statistics released last week back the trend. They showed strong employment and a higher number of people in the workforce, but wages have not increased as much as expected.

Annual wage inflation, as measured by the labour cost index (LCI), was 1.6 per cent nationwide - hardly above the annual consumer price inflation of 1.5 per cent.

Economist Robin Clements says wage increases "ought to be picking up about now".


Despite economists' predictions, Walker says employers are in no hurry to give raises to their staff. "Employers tell us that they expect salaries to increase by 3 per cent or below in the next 12 months."

This is a risky attitude, he warns, as workers get more confident and won't hesitate to jump ship if they are offered better conditions or more money.

"If [employees] don't have a way to generate more income through their own performance or the performance of the business, then they won't be driven to higher performance . . . and feel disengaged."

Rogers of Hudson agrees. He says it might not be long before employees start to "stamp their feet and show their concern".

He reckons that wage increases will ultimately come from people changing jobs rather than organisations substantially increasing the pay of their existing staff. "Employers will learn the hard way if they don't recognise the performance of people and increase their salary."

Council of Trade Unions president Helen Kelly says only a change of legislation supporting a better collective bargaining system could bring pay better increases.

She says wages are on the decline with 46 per cent of New Zealand employees not getting a pay rise last year. "In our most productive sectors - forestry, farming and construction - wages are not increasing."

With New Zealand's biggest sectors mostly de-unionised, "collective bargaining is impossible", she says.


How to get a pay rise in seven steps:


1. List your recent achievements and any rising work volumes or duties you've taken on. Then list the benefit of these for the company. The aim is to provide strong evidence of the value you provide.

2. Research the salary you feel your performance and results are worth by reviewing a recent salary guide to back up your request with evidence that the salary you are asking for is in line with market rates.

3. Ask your manager for a meeting to review your performance.


4. Ask your manager to describe in specific details what a good performance for an employee in your position looks like.

5. Then ask whether your performance is in line with what your manager just described. The aim is to find out whether your boss thinks you're doing a good job before asking for a rise.

6. Use the previous points as a catalyst to discuss your salary. Use your accomplishments and the value you add to the organisation as the basis of your negotiation. Do not become emotional and do not talk of how much money you need for rising bills. Keep it professional.

7. Have a fall-back position. If your employer does not want to increase your salary, can you agree on a date for another pay review in three or six months? What about additional annual leave, study or other benefits?

Source: based on a combination of tips from Hays and Hudson

The Dominion Post