Are you getting paid what you are worth?
In my accounting practice, we have been having conversation after conversation with business owners & HR experts about finding staff
The business owners tell us that finding staff is proving extremely testing. Labour supply has been restricted with our borders being closed (fewer workers coming to NZ)
The HR experts tell us that every placement is met with a counter offer from the current employer. What this means is that people are going for jobs and when they get an offer, they go to resign from their job and their current employer offers them more money to stay.
Some big corporates are offering large pay increases to keep staff from moving to competitors.
The simple solution for most employers is to offer staff more money, hoping that they will stay. People enjoy progress & progress in income is no different. They are tempted by the higher pay.
We know that house prices are rocketing up. Our prized possession and goal in New Zealand of home ownership, means people go after a rate of pay in line with the ability to achieve their goal - buying a home.
We can look to the banks to see what their economists predict (take it with a grain of salt as always). On this one, ANZ says that the economy is rapidly approaching “full employment”.
Full employment is when everyone that can work has a job.
ANZ think unemployment will drop from 4.7 per cent to below 4 per cent by 2023. This would be a new 16-year low.
What about ASB? "Difficulty of finding labour and labour as a limiting factor are at record highs. Labour turnover surged in Q2, evidence that firms are now poaching staff off each other''.
What does that mean for you?
Employers can expect wage pressure from their staff. (See the HR experts' experience above).
The noise on this is getting louder, so much so that I nearly sent this out to you on Monday.
You need to pay attention to it as there may be an opportunity to speak to your employer and see whether there is room for you to be paid more. You need to think about your last pay-rise.
Remember previously I've said that your biggest asset is yourself and this is the sort of environment where you need to remember that.
Of course, just because something is scarce doesn't make it 'good'. However, scarce labour means more competition, which usually means a bigger cost to secure the labour.
Don’t approach your employer without a well-thought out story as to why you deserve to be paid more. Try to understand what will help them as an employer and what they are trying to achieve.
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No employer enjoys a staff member threatening them that they'll leave if they don't get more money.
You need to actually be valuable to your employer to be paid more in value. Have an honest conversation with yourself first - are you worth more in this labour market?
Of course, you could always approach similar employers and ask them what your skillset and experience is worth to them or whether they are hiring. From what ASB said, that is happening a lot so the chances are, they are looking for good labour.
ANZ also reported that job vacancies had risen “way above pre-Covid levels”. This is across every industry. The total number of job vacancies is “well above previous record highs”.
We are in interesting and unusual economic times. I suggest you spend some time thinking about how you can become more valuable to your current or future employers.
Time to have a brave conversation,
Luke
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Did you know: If your bank fails, your money is not safe. The government will guarantee up to $50,000 of your funds. This will move to $100,000 in the future (protecting over 9/10 NZers).
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