2023 NZIFST Salary Survey

Employer and employee salary expectations are misaligned

In my 30 years in the employment sector, I have never experienced a time like now where employers and employees have such varied expectations around what salaries can or should be paid in the Food Industry.

The 2023 Lawson Williams, NZIFST and NZFGC employer Salary Survey has been released and shows some interesting trends around salaries and benefits.

It is no surprise that we report significant increases in salaries since our last survey in 2021, well beyond the more typical 3% annual CPI increase.

We have all heard about the pressure on salaries over the past two years. Recent reports have suggested that 72% of employees are currently feeling underpaid in New Zealand with 42% saying they will actively negotiate their salary in 2023. Over 52% believe they will benefit from changing jobs. (Hays)

Yet we have also read recently that many organisations are attempting to budget only a 3% increase in salaries in 2023 and 2024 – despite the high level of inflation and increasing cost of living and despite the continuing and increasing demand for skills. (Mercer)

How can this be?

Well, it is true that the New Zealand economy is slowing and as a result many companies are becoming more cautious. The numbers of job adverts on job boards have decreased but surprisingly, they remain at higher levels than 2019 and the persistent low unemployment rate underpins the ongoing shortage of skills.

Immigration levels are up. Are companies expecting that this will alleviate the pressure on skills and salary increases?

The immigration data however shows that most of the current migrants are filling roles in the tourism, hospitality, construction and logistics sectors, not the highly skilled roles that the New Zealand Food Industry needs.

We are seeing significantly lower interest in New Zealand from skilled migrants than expected. It appears they have all gone somewhere else!

Our survey has now grown to the size that we can show detailed data across location and company size among other variables.

When we look at the salary increases that have occurred against company size, the 2023 survey results present very clearly that the smaller the company the higher the percentage of salary increases since 2021.

Larger companies have more easily moderated the impact of the increases in salaries we have seen in 2021 and 2022.

Smaller companies have had to respond and increase salaries to higher levels to ensure attraction and retention of the skills they need. In future articles we will investigate these differences in more detail. What are large companies doing to respond to the changes in the employment market. What can employers regardless of size do to attract and retain staff.

Is it all about the money? The answer is no, but beware, it’s never been more important!

(You can find out more by visiting www.lawsonwilliams.co.nz/ surveys)