Companies being 'more selective' with pay hikes amid economic challenges
Employers across New Zealand are "favouring top-performing talent" when it comes to salary increases due to economic challenges, according to reports.
Radio New Zealand reported on a new survey from Robert Half among 250 hiring managers and 501 employees.
It found that 24% of respondents froze salaries, while 70% increased salaries to keep pace with the cost of living, according to the report.
Megan Alexander, managing director at Robert Half NZ, attributed the findings to organisations grappling with rising costs and tighter profit margins.
"As a result, companies are being more selective with who they give salary increases to, favouring top-performing talent rather than giving a rise to everyone," Alexander said as quoted by RNZ.
Employers' close watch on compensation will likely continue, as Alexander said employers aim to make profit and sustain their business.
"They have to be prudent about managing their cost structure. It's not a case of just continuing to increase salaries, they've had to really look at where they're going to spend and what value they're getting from each of those salaries," Alexander said.
Motivator for career moves
To make up for the hiring freezes, employers are likely turning to non-monetary benefits to retain talent, according to Alexander.
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But she warned that this will be a "sustainable long-term solution" to the problem, as salary remains the top motivator for career moves among staff.
In terms of non-salary factors, employees will likely move for flexibility (12%), benefits (10%), and company culture (9%).
Alexander suggested regularly reviewing and benchmarking compensation policies against market trends.
"By striking a balance between competitiveness and financial sustainability, businesses can successfully navigate the demands of the current job market," she said.