It is being dubbed the "year of the raise" as many employees could be expecting additional dollars added to their pay packets.
A whopping 95 percent of New Zealand employers are planning to increase salaries in their next review, data from recruitment company Hays found. This figure is up from 88 percent last year and 67 percent the year before.
Of those employers, 71 percent plan to increase salaries by above three percent, up from 37 percent of employers last year.
The majority of employers (78 percent) said the skills shortage is behind the pay rises, forcing them to offer higher salaries than planned.
"We're calling this the year of the raise, where the promise of higher salaries reflects the intensity of the skills shortage in today's jobs market," Hays NZ managing director David Trollope said.
The FY23-24 Hays Salary Guide is based on a survey of 1904 New Zealand organisations and 2048 New Zealand professionals.
However, despite the promises of pay boosts, employer and employee expectations still fail to align. The survey found many employees feel undervalued and underpaid with only 28 percent satisfied with their current salary.
It found this year 72 percent of professionals surveyed plan to ask for a pay rise, up from 58 percent last year.
Almost three-quarters said it is reasonable to expect pay rises to keep up with inflation, which remains high at 6.7 percent.
But for those unhappy with the amount they earn, Hays said an "emotional salary" can bridge a financial expectation gap.
"Salary is undoubtedly the most critical factor in attracting, rewarding and retaining employees today, but employers recognise that benefits also play a significant role," Trollope said.
Just 27 percent of employers were satisfied with their current benefits. Hays found most benefits employers offered were training (83 percent), ongoing learning and development (58 percent), career progression opportunities (52 percent) and mental and physical health and wellbeing programs (52 percent).
The most common benefits employees wanted from their employers were over 20 days of annual leave, more career progression opportunities and training.
"They are now placing greater value on emotional salary – the intangible benefits that positively impact their emotional wellbeing and job satisfaction, like more than 20 days of annual leave and wellbeing leave," Trollope said.
"As benefits expand in our post-pandemic world, the emotional elements can make or break the success of your overall package."
