2022 is already off to an eventful start.
Even if you had a restful break, it may feel difficult to return to work amidst the current turbulence. It’s a mental adjustment, and if you were struggling before the break, returning to a place that doesn’t spark joy probably isn’t appealling.
Data suggests New Zealand could be on the cusp of something similar to the Great Resignation seen in the USA and UK – in sentiment, anyway. A 2021 nationwide study from AUT indicates a growing number of Kiwis are thinking of leaving their current jobs. And with the labour shortage we’re currently facing (partially driven by the borders remaining closed), they just might have options open to them.
It’s supply and demand – we have more work than workers, making their labour more valuable. The average salary per filled job rose 7.6 per cent in the year to November 2021, reaching a staggering 20-year high. The total amount paid to workers rose in conjunction a record-breaking 9.6 per cent. We’re also in the middle of a record low 3.5% unemployment rate, which is creating a very tight labour market.
From Brad Olsen, the principal economist at Infometrics:
“This figure is a strong signal that businesses are facing higher wage and salary pressures. People are making it known that they have other options they want to explore. If companies want to keep their employees they are going to have to think very carefully about their pay level.”[1]
The great poaching
Accompanying these higher wage stats is a high labour turnover, which suggests employees are using their improved bargaining power to score bigger paychecks when switching jobs. With job vacancies higher than pre-Covid and the labour turnover expected to hit a 50 year high, it’s a tempting notion.
Unfortunately this does mean businesses are being caught out, and even those who are able to keep up with these offers are having trouble finding employees – particularly skilled ones – as the competition grows more fierce.
This reported labour drought is widespread with industries like IT, engineering and construction, and various admin positions being flagged in several articles on the subject.
Recruiters, including companies based overseas looking for skilled remote workers, have mid-level employees in the $80,000 to $200,000 bracket firmly in their sights. Anectdotally, poaching seems to be the only way some fields can populate vacancies.
With borders potentially reopening this year we can expect to see Kiwis leaving, even as we finally have migrant workers again – which could increase the gap in mid-level workers we’re already starting to see.
For businesses, it may be worth looking at how you can add value to roles in your company beyond salary offerings. This could include things like offering a comprehensive group insurance scheme and long run annual leave (offering more leave at regular intervals to reward loyalty) – both of which can be contingent on time spent with the company, to help with retainment.
Other non-salary perks could include free parking, gym membership, making free food available in the office, flexible hours, or making a point to offer effective maternity/paternity leave. A focus on career progression is also appealing, including mentorship and/or education opportunities.
In search of greener pastures
While the odds of finding a new job are currently in your favour (within reason), it’s worth taking the time to seriously consider your situation first before you make any decisions. You don’t want to take a risk and end up in a situation that doesn’t benefit you.
1.) The issue
What is it about your current role that’s making your job unappealing? Is it something which could possibly be rectified by speaking to senior management, like a pay increase or a reshuffle of your duties?
If the issue is more around toxic behaviours it can throw a spanner in the works - but if you can do so, it may be easier to give your current employer a chance to rectify the situation before you jump ship.
2.) The opportunity
Before you leap, it’s always a good idea to do research. If you have any mentors or people in your field you can trust to keep your confidence, try to get an outside perspective on your potential move.
You can also research online to make sure you’re getting the full scope of what’s on offer in your industry currently.
3.) The logistics
Finally, you should consider whether you have the financial security to change jobs. Do you have savings to support a changes in your pay cycle (e.g. from fortnightly to monthly), or any gap between finishing your previous role and starting your new one? What costs do you need to cover during this time, and what will you do if something unexpected happens?
While it can be tempting to start fresh in the New Year, being pragmatic will help you in the long term. Signs are pointing to it being a jobseeker’s market at the moment, and to this not changing in the immediate future. You have time to assess and make a plan.
And if you want to go further and make getting your financial house in order a priority in 2022, start by calling the trusted professionals for a chat about your situation and goals.
Nick Stewart is a Financial Adviser and CEO at Stewart Group, a Hawke’s Bay-based CEFEX certified financial planning and advisory firm.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
[1] https://www.stuff.co.nz/business/127482768/wages-rises-are-setting-new-records-as-employers-compete-for-workers?rm=a
