If you’d asked me this time last year what salary increases in 2024 would look like, I’d have said they needed to be in the region of 7% to retain staff in a red-hot market. What a difference a year makes!

Today we find ourselves in a very different place. The country is in a recession and the feeling, at least in Wellington, is that you’re lucky to have a job, let alone expect a pay increase. For some in the private sector business looks uncertain, and they are wondering how they will manage this year’s salary increases. So, what are the options?

This year you can’t just rely on salary survey data as the market has changed. With an oversupply of talent in some areas, you will need to think about which roles or people in your organisation are critical and require an increase in pay, and which roles or people are lower priority.

But it’s not all about pay. A good remuneration and reward strategy sets out how you will attract, reward, and retain your top talent. Now more than ever it’s important to think of remuneration in terms of a ‘total rewards strategy’, especially if the prospect of a salary increase is looking unlikely or lower than employee expectations (which is likely the case!).

Employees don’t just join an organisation for the pay. They value a great culture and work life balance. When advertising for new employees, be sure to describe your office environment and mention any additional benefits that your business offers, such as flexible working opportunities, additional leave provisions, and/or paid time out of the office to give back to the community. These can be great draw cards for attracting new recruits.

Benefits are another way to retain staff and are often viewed as more valuable to an employee than the equivalent in a salary increase when they are thinking of leaving a business. Benefits such as medical insurance give employees access to group schemes and levels of cover that they would not normally be able to afford and can provide a great retention tool.

And when it comes to recognising achievements, this doesn’t need to be expensive. Shout outs, thank you cards, and morning teas can be used to reward achievements and make your staff feel valued.

If you need help navigating this minefield, Intepeople can help. We are experts in developing remuneration strategies and frameworks that are practical, flexible, and affordable. Reach out if you’d like to know more – amy@intepeople.co.nz.

- Thought piece by Amy Boldy, People & Capability Partner at Intepeople