'Stand-off' looming between white-collar workers and employers over pay

Friday, 2 December 2022

There’s a gulf emerging between what some workers want and what bosses are willing to pay.

The gap is widening between the proportion of professional workers expecting inflation-beating pay rises and the proportion of employers intending to offer that, says Robert Walters.
Anecdotally, sentiment among employers has shifted since the Reserve Bank’s hawkish monetary policy statement last week.
It believes an apparent turnaround in migration may be a sugar-hit from working holiday arrivals and still expects a net loss of young professionals from NZ next year.

A gulf is growing between the pay rises that white-collar workers expect over the year ahead and the increases that employers are willing to pay, according to one of the country’s largest recruiters.

Recruiter Robert Walters said its annual survey of more than 1000 professionals and employers showed a growing disconnect, and signs of a “looming salary stand-off”.

About 79% of white-collar workers it surveyed warned they expected to start looking for a new job if they did not get a pay rise that beat inflation over the next 12 months, but about 70% of employers were not prepared to offer that, it said.

Shay Peters, managing director of Robert Walters in Australia and New Zealand, said white collar workers’ awareness of high inflation and their demands for matching pay rises had been gradually building over the past six to 12 months.

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But the negative turn in employers’ sentiment had been more sudden, he said.

“They are looking at global trends and what's coming from a macroeconomic perspective over the next 12 to 24 months and starting to see a change in the market.

“Our offices in America have definitely felt this first but we know it'll come our way eventually.”

ANZ reported in a separate survey on Wednesday that businesses’ hiring intentions had turned negative for the first time in two years.

ANZ said its survey was held too early in the month to have been significantly influenced by the Reserve Bank hawkish monetary policy last week that signalled it was engineering a recession next year.

Robert Walters Australia and NZ managing director Shay Peters says the talent coming in to NZ next year may not match the talent going out.

But Peters said he was aware of anecdotal evidence that employers had hardened their attitudes since that statement.

“We're starting to see key metrics such as ‘time to hire’ increase which means employers are thinking a lot more carefully about what their business is going to be facing over the next 12 to 24 months.”

But the outlook was complicated as Robert Walters was still seeing global talent shortages, he said.

Peters said he also expected a net loss of young professionals from migration next year.

That could be expected to assist those who remained in their pay negotiations.

Stats NZ has reported an apparent turnaround in migration, estimating the number of people arriving in New Zealand who will stay for more than a year outnumbered those departing for a year or more by 4559 between July and September.

But Peters believed that could be a sugar-hit from people on working holiday visas arriving in the country, rather than a turnaround in long-term migration.

Immigration Minister Michael Wood said on Friday that more than 20,000 people had arrived on working holiday visas since the border reopened earlier this year, with almost 6000 arriving in November alone.

Peters said the working holiday community was an important workforce across a number of different sectors.

“But one of my major concerns is the fact that we're going to be losing young professionals overseas next year. There’s pent-up demand for people wanting to do ‘OE’s and we can’t hide from that as a country.

“I don't think that the talent coming in is necessarily the same match that's going out.”

That left employers between “a rock and a hard place”, he said.

“They know they need talent to be able to grow and to continue their operations, but they can't necessarily afford to pay to match inflation.”

“Non-monetary solutions” included improving their workplace culture and working environment, and offering more flexibility and potentially more annual leave, he said.

“One of the things that we're doing at the moment is putting on breakfast in the mornings. It's simple toast and cereal and stuff, but it all helps.”