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SPOTLIGHT ON NEW ZEALAND

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REMUNERATION TRENDS

Movements sitting at 2.8% in November 2017

Executives and Management receiving highest increases

Waikato/BOP awards highest pay rises

Transportation Equipment industry records highest movement

Companies with parent location in Asia pass on highest increases

Reported throughout this document is the employment cost (EC). Also referred to as total package or fixed remuneration, employment cost includes base salary, cash allowances, benefits and FBT but excludes variable reward.

ALL DATA MOVEMENTSThe median general market employment cost same-incumbent movement for New Zealand sits at 2.8% in November 2017. The forecast for New Zealand is currently also sitting at 2.8% for 2017/2018.

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CAREER STREAM MOVEMENTSEC movements for executives (3.0%) and management (3.0%) are above all other staff categories. Professional (2.8%) movements are at the general market, while para-professional (2.4%) movements are lagging slightly behind the general market and displaying the lowest movements of all staff categories in New Zealand.

EXECUTIVE MANAGEMENT PROFESSIONALPARA-

PROFESSIONAL

3.0% 3.0% 2.8% 2.4%

LOCATION MOVEMENTSWaikato/BOP (3.5%) recorded the highest annual increases. Other areas were on par with national movements, with the exception of Wellington (2.2%), which is well below the national rate.

Wellington 2.2%

Waikato/BOP 3.5%

Auckland 2.7%

Christchurch 3.0%

Other North Island 3.0%

Other South Island 2.7%

INDUSTRY MOVEMENTSIn the year to November 2017, transportation and equipment (3.9%), energy (3.5%) and high-tech (3.5%) recorded the highest movements, while chemicals (1.7%) and other manufacturing (2.0%) passed on the smallest increases and fell well below the general market movement.

1.7%

3.0%

3.5%

2.0%

2.9%

2.4%

Che

mic

al

Ener

gy

Hig

h-te

ch

Life

Sci

ence

s

Oth

er

Non

-Man

ufac

turi

ng

Tran

spor

tati

on E

quip

men

t

Serv

ices

(N

on-F

inan

cial

)

2.4%2.4%

Con

sum

er G

oods

3.5%

Reta

il an

d W

hole

sale

Logi

stic

s

Oth

er

Man

ufac

turi

ng

2.6%

3.9%

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JOB FAMILY MOVEMENTSMost job family movements hovered around the overall market movement (2.5%-3.0%), with jobs in research and development (4.0%) and human resources (4.0%) awarded well above average increases. The lowest movements recorded were for the communications (1.8%), legal (2.0%), finance and administration (2.0%) and marketing (2.0%) job families.

Com

mun

icat

ions

Con

tact

Cen

tre

Cor

pora

te A

ffai

rs

Engi

neer

ing

Fina

nce

Hum

an R

esou

rces

Info

rmat

ion

Tech

nolo

gy

Lega

l

Life

Sci

ence

s

Man

ufac

turi

ng

Mar

keti

ng

Proj

ect

Engi

neer

ing

Qua

lity

Rese

arch

and

Dev

elop

men

t

Reta

il

Sale

s

Sale

s an

d M

arke

ting

Supp

ly a

nd L

ogis

tics

Top

Man

agem

ent

Adm

inis

trat

ion

3.0%

1.8%

2.3%

2.8%

2.5%2.7%

2.0%

4.0%3.8%

3.0%

2.0%

3.4%

2.2%2.0%

3.0% 2.9%

2.5%

2.9%

4.0%

2.7%

Con

sult

ing

Repa

ir a

nd M

aint

enan

ce

3.3%

3.0%

Fina

nce

and

Adm

inis

trat

ion

IT A

naly

sis

and

Des

ign

IT D

eplo

ymen

t an

d Su

ppor

t

3.0% 2.9%

3.5%

MOVEMENTS BY PARENT LOCATION Organisations with the parent company located in Asia recorded the highest increases (4.0%) and sit well above the overall market median. Organisations with the parent company located in the UK (2.2%) and Europe (2.3%) recorded the lowest movements. Australia/NZ headquartered organisations sat above the general market at 3.4%.

USA 2.8%

UK 2.2%Asia 4.0%

Europe (excl. UK) 2.3%

Australia 3.4%

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NEW HIRE PAY RATESMeasures the relativity between salaries offered to hire new staff compared to existing employees within an organisation. A negative value indicates the market is hiring at salaries below that being paid to existing employees, while a positive figure indicates that ‘new hires’ are attracting salaries above employees currently in the role.

Job market conditions within the New Zealand market indicate that the new hiring pay index is currently sitting at -2.7% in November 2017. This indicates the market is offering a discount compared to existing incumbents. New employees are being remunerated at -2.7% below existing employees already in the role.

All staff categories were offering salaries below existing employees. Management roles performed best, with new employees in those positions being hired -0.4% lower, on average, compared to existing employees. Staff in professional positions followed next, with staff being hired at a discount of -1.7% to existing employees already in the role. The para-professional (-6.7%) staff category offered new hires salaries well below existing incumbents already in the role.

PROFESSIONAL

-1.7%

PARA-PROFESSIONAL

-6.7%

MANAGEMENT

-0.4%

High-tech (2.4%) fared highest overall this month when viewing results by sector, followed by energy (1.5%) and transportation equipment (0.7%). In contrast, incumbents hired in the remaining sectors were offered salaries at a discount to existing employee pay with Other non-manufacturing (-15.5%), and services (non-financial) (-8.8%) offering the most discounted salaries.

BY INDUSTRY

-2.3%

Chemicals-3.9%

-3.0%

-3.7%

Consumer Goods

Life Sciences

Logistics

Finance

Other Manufacturing

Other Non-Manufacturing

Retail and Wholesale

Services (Non-Financial)

-3.5%

-15.5%

-5.3%

-8.8%

2.4%

Energy 1.5%

0.7%

High-Tech

Transportation Equipment

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PAY INCREASE BAROMETERThe pay barometer measures the extent to which salaries are passed on at, below or above market rates in the past six months. The terms ‘contraction’, ‘stable’ and ‘expansion’ are used to define the proportion of individuals that in the past six months have received below, at or above market rates, respectively.

Results for the New Zealand pay barometer in November 2017 show pay increases over the past six months have stabilised with 33.0% of all individuals in the sample receiving ‘at’ (stable) market increases. The proportion of individuals awarded ‘above’ (expansion) market rates is 31.0%, while the proportion of individuals awarded ‘below’ (contraction) market rates is currently sitting at 36.0% in November. Industry results this month showed the highest proportion of individuals receiving ‘above’ market increases were employed in the non-financial services sector (51.0%), while incumbents employed in the other manufacturing sector (57.0%) were more likely to receive increases significantly below the overall market movement.

BY INDUSTRY

Services (Non-Financial)

Retail and Wholesale

Other Non-Manufacturing

Other Manufacturing

Logistics

Life Sciences

High-tech

Consumer Goods

Overall 36%

27%

31%

22%

57%

34%

45%

33%

28%

33%

24%

28%

19%

45% Stable

Contraction

Expansion

27% 17%56%

41%8% 51%

52%

18%

51%

51%13% 36%

53% 42%5%

38%

19%

37%

33%

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GENDER PAY INDEXMeasures the relativity between salaries offered to male and female staff working in the same role within the same organisation. A positive value indicates the market is offering female employees salaries below that being paid to male employees in the same role, while a negative figure indicates that female employees are attracting salaries above male employees in the role. Please note: the global standard and WGEA standard is for a positive value to indicate where males are being paid more.

Job market conditions indicate the New Zealand gender pay index is currently sitting at 1.2% in November 2017. Overall, the market is currently offering female employees salaries 1.2%, on average, below male employees.

Female staff across most categories were being remunerated at lower rates of pay compared to male employees, with executives being the only staff category to offset the trend. The largest gender pay gap existed within executive positions, where female employees are currently being remunerated at 7.2% above male employees. This is in stark contrast to conditions within the Australian jobs market, where female executives are at a pay disadvantage (3.2%). Female employees in management (1.4%) and professional (1.6%) roles were earning salaries, on average, below male incumbents. Para-professional (0.8%) roles followed closely behind, but are still falling short in terms of pay compared to their male counterparts in the same roles.

BY CAREER LEVEL

EXECUTIVE MANAGEMENT PROFESSIONALPARA-

PROFESSIONAL

-7.2% 1.4% 1.6% 0.8%

Sectors mostly contributing to the negative result this month are other manufacturing (3.1%), mining and metals (2.9%), and life sciences (2.3%). The energy staff category (-6.4%) was able to offset this overall trend, offering female incumbents higher salaries compared to male employees in the same roles.

BY INDUSTRY

-6.4%

-0.4%

-1.9%

Energy

Logistics

Other Non-Manufacturing

Finance

1.3%

Chemicals 1.5%

2.3%

1.1%

2.9%

Consumer Goods

High-Tech

Life Sciences

Other Manufacturing

Retail and Wholesale

Services (Non-Financial)

3.1%

1.7%

1.4%

Mining and Metals

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TOP BEST AND WORST JOBS

-7.2%

Warehouse Clerk - Experienced-9.6%

-4.1%

-6.4%

-3.3%

Account Manager - Specialist/Key Account Manager

Account Management Manager (Key & Non-Key Accounts)

Customer Service Representative - Senior - Contact Centre

Warehouse Clerk - Entry

Administrative Assistant - Experienced

Customer Service Representative - Experienced - Contact Centre

Sales Representative - Experienced

Prod. Worker(Entry)

FinanceOfficer

-3.3%

-1.1%

-0.5%

6.9%

Technical Sales Representative - Senior - Pre-sales Engineering 12.5%

4.2%

4.8%

3.6%

Production Worker - Experienced

Product/Brand Marketing Professional - Experienced

Finance Manager

Production Line- Team Leader

Account Manager - Senior/Jr. Key Account Manager

Sales Representative - Senior

Account Manager - Experienced

3.4%

3.3%

2.7%

2.1%

1.7%

Product/Brand Marketing Professional - Senior

Sales Manager - Regional

The information and data contained in this report are for information purposes only and are not intended nor implied to be a substitute for individual professional advice. In no event will Mercer be liable to you or to any third party for any decision made or action taken in reliance of the results obtained through the use of the information and/or data contained or provided herein.