Mercer: NZ salary increases slip to GFC levels

Mercer: NZ salary increases slip to GFC levels

Mercer: NZ salary increases slip to GFC levels

  • 15 December 2013
  • New Zealand, Auckland
  • Lowest salary movement in five years: 2.6 per cent movements same as during GFC

  • Lower business confidence has driven tighter salary budgets

  • Organisations need to look toward employee benefit strategies to retain staff

  • 31 per cent of organisations will reduce headcount over the next 12 months


Salary movements in New Zealand have slipped significantly to 2.6 per cent – a level recorded during the global financial crisis – compared to an average fixed pay movement of 3.2 per cent across the last five years.

Mercer’s latest Total Remuneration Survey and New Zealand Benefits Review results also found provisions of benefits are at record high levels and have been trending upward across the last few years, with organisations offering flexible working hours (87 per cent), non-financial rewards (95 per cent), health and wellness programs (95 per cent) and the ability to work from home (64 per cent).

Senior Associate of Mercer’s Talent Business in New Zealand, Sarah Barnaby, said the figures indicate a more conservative approach to remuneration and staff retention than we have seen in the last decade.

“The results indicate that while we have seen an improvement in economic confidence, recovery post GFC has been slower than expected inside businesses and this increase in positive sentiment is not reflected in wage or salary increases by New Zealand companies.

“Smaller pay increases require employers to get more from their workforce for less – placing greater pressure on organisations to become innovative with employee rewards and benefits in order to grow productivity in an already relatively high cost environment. It is for this reason that organisations should not neglect the positive impact that effective remuneration can have on an organisations’ bottom line,” said Ms Barnaby.

The Mercer Total Remuneration Survey also demonstrated cross-country variations, with organisations in regional areas and Wellington showing lower salary increases, while Auckland is the only location in the country paying on average above the NZ general market median. Increases are also being observed at non-executive levels such as function heads. 

Additionally, 31 per cent of New Zealand organisations indicated they will decrease their headcount in the next 12 months, compared to 44 percent in Australia.

“Market competition and benchmarks remain the most important consideration for organisations when setting remuneration budgets. Despite the tightening budgets and downsizing, employers know they have to remain competitive to attract and keep the best talent,” Ms Barnaby added.

The Mercer Total Remuneration Survey is conducted among more than 1,260 organisations around the world, representing a wide variety of industries – looking at the effect of salary increase data and what organisations can expect to see in coming years.

For further information or to arrange an interview with Sarah Barnaby, please contact Bronte Tarn-Weir.

About Mercer

Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @Mercer_NZ