NZ trailing Australia on pay rises

New Zealand continues to lag behind Australia when it comes to salary increases, a survey has found.

The Hays Salary Guide - which examined salary and recruiting trends for over 1800 job functions in 16 sectors across Australia and New Zealand - found 43 per cent of Australian employers were planning salary increases in their next review, compared with 33 per cent in this country.

Thirty-three per cent of New Zealand employers were also planning to take on new staff this year, the survey said, while the number across the Tasman was around 10 per cent higher.

Hays New Zealand managing director Jason Walker said Australia was four to six months ahead of New Zealand in terms of its economic recovery and there was a risk of losing workers across the Tasman where more opportunities were available.

New Zealand firms needed to concentrate on retaining staff now, he added, in order to lessen the impact of a future skills shortage that was looking increasingly likely.

"We believe in the next 12 months ... we'll start seeing skills shortages and candidates in higher demand probably having more control over the recruitment process."

Employers and Manufacturers Association advisory services manager David Lowe said a "level of uncertainty" still existed among New Zealand employers regarding the economic recovery.

Salary increases were a permanent investment, similar to buying machinery, he said.

"It really comes down to the confidence people have in the future, and I think one in three [New Zealand employers planning salary increases] is a reflection of the improving confidence, but also recognition that people are still a bit cautious."

Lowe said a strengthening Australian economy was positive for New Zealand as that country was our biggest trading partner.

The survey also indicated 80 per cent of employers in New Zealand's mining sector were planning salary increases of between 3 and 6 per cent in their next review.

Forty-seven per cent of employers in the professional services sector, and 42 per cent in IT & Telecommunications, indicated they would give pay rises in the same range.

Eighteen per cent of employers planned to increase temporary workers, up from 12 per cent last year.

By Christopher Adams