The employers’ National Wage & Salary Survey released this week confirms pay rates are rising fastest for skilled workers.

The average wage increase for all employees was 4.5 per cent for the year ended August, but wage increases for unskilled employees averaged only 2.4 per cent. Pay for skilled administrators and management increased 6.6 per cent.

This year 745 employers provided pay data for 48,477 employees across 214 job types in 19 industry sectors.

David Lowe, Employment Relations Manager for the Employers & Manufacturers Association (Northern) commented:

“Overall the biggest increases tended to be in office jobs, with lower rates of increase in areas such as production supervisors, fitters, and skilled warehouse work.

“Since unskilled people averaged wage increases of 1.7 per cent less than everyone else in 2006, its obvious that over time lower skilled people do fall behind.

“The good news is the incentives to people to up skill themselves are evident in terms of higher wage packets.

“The biggest movers in the pay stakes this year were: skilled shop salespeople (up an average 9.9 per cent); Managing directors with 50 to 199 staff (up 9.5 per cent); registered electricians (up 9.2 per cent); registered nurses (up 9.1 per cent); and diesel motor mechanics (up 8.4 per cent).”

Some key points from the survey are:

• Employers under-estimate how much they need to pay to attract the right staff. Employers end up spending about one per cent a year more in pay than they estimate they will.
• Senior managers often have about 20 per cent of their remuneration package related to the performance of their businesses and delivered in the form of performance bonuses.
• Over a third of employers specifically say they do not offer redundancy compensation. For those that do the 4 + 2 formula (four weeks pay for the first year of employment and two weeks pay for every year thereafter) was the most common.
• While KiwiSaver is still new, employers are ditching their own superannuation scheme, (68 per cent in 2005 down to 50 per cent in 2007) with a further 12 per cent saying they will discontinue their own schemes.
• Only 8.5 per cent of workers are getting five weeks holiday; 2.4 per cent get more than five weeks. 89.1 per cent of employees get four weeks holiday, demonstrating the increase in the statutory minimum holidays earlier this year has not produced an extra week’s holiday for those already on four weeks.
• The average amount of annual leave being accumulated has doubled since last year. Many staff seem unable yet to take the extra leave they are now entitled to.
• Using annual leave to recognise long service has fallen dramatically. Last year, nearly half the work force was getting extra leave based on service, which has fallen to 22 per cent this year.

“Increases taken from just the latest year in isolation can be misleading; we recommend looking at the actual dollar value of a position and noting its average percentage trend increase over three years,” Mr Lowe added.

“For instance, salary for HR managers went down by 0.4 per cent this year, but in 2006 the increase registered 9.7 per cent whereas the average annual increase over the past three years has been 3.9 per cent.”

Average wages for 2007 in twenty five occupations.