The 12th Annual Frontline Retail Salary Guide has been released. Included in the Newsletter is a dedicated insert with all salary information taken from our annual survey of retail salaries across Auckland, Wellington and Christchurch.

In the last 12 months Frontline Retail New Zealand has placed over 400 candidates and interviewed over 2300 candidates for retail positions that Frontline has listed. The information contained within this survey is based on the data collected from both clients and candidates, through roles advertised by clients, and candidates placed by Frontline Retail. (A separate salary survey has been completed in Australia where Frontline Retail placed over 2226 candidates and interviewed over 11659 candidates)

The New Zealand salary figures are based on actual salaries for candidates who have been placed during this time and candidates’ salaries in their position prior to being interviewed by Frontline Retail New Zealand.

2008 – A Year In Review

• It is often said that if the US sneezes the rest of the world catches a cold. The other thing that we know from experience is that most things happen first in New Zealand and this is true of the economy.

• New Zealand experienced a downturn and subsequent recession well ahead of the rest of the world. The past twelve months has been particularly difficult especially in Retail which is so dependent on consumer confidence and discretionary spending.

• For most of 2008 it continued to be a candidates market with unemployment sitting at just below 4% which is on par with Australia.

• For clients it meant that attraction and retention had become priorities for most businesses as ways of dealing with the 'war for talent'. Flexibility surrounding packaging, flexibility, candidate experience and the consideration of transferable skills across sectors had enabled companies to expand the pool of available candidates. You can read more about this in our “War on Talent” article series in the Resources section of our website.

• For candidates it meant that there was room to move on salary negotiations but they had to beware the trap of being caught in the process of counter offers and reputation of job hopping. It was not uncommon for candidates to be made multiple job offers and to be counter offered by their current employer. This tight candidate market saw salaries increase over the past 12 months.

• The events and subsequent fallout from the Global financial crisis has seen the recruitment and employment market change quite dramatically since October 2008.

• Many businesses could see potential problems emerging and started to slowdown their recruitment efforts.

• Initially clients focussed on internal recruitment and bolstered their HR teams but when the crisis hit, some internal HR teams were made redundant because businesses were not hiring and therefore had no need for these individuals. (HR recruitment is down over 30% from the previous 6 months).

• This shake up from the financial crisis has meant both jobs and candidates have dried up in the short term. Businesses, because they are taking a wait and see approach and candidates because they are concerned about job security and what might happen if they leave their current employer.

• The early indicators are that the employment market will swing in favour of the client as the unemployment rate rises in the next twelve months and that this will see salaries stabilise for the next twelve months for the majority of employees.

• The client needs to be mindful that there will be more candidates in the market as unemployment rises but the level of passive candidate activity has not dropped off in spite of the uncertainty associated with the fallout from the financial crisis.

• The top performers will continue to be difficult to attract and retain in this changing marketplace. On one hand they want job security but also want to be recognised for their hard work and some of these individuals will be working harder because of redundancies within their businesses. Competitive salary will continue to be a key determinant for these top performers.

New Zealand Employment Statistics (Sept quarter)

• Seasonally adjusted employment increased by 3,000 to 2,172,000.

• The seasonally adjusted unemployment rate increased to 4.2 percent.

• The seasonally adjusted labour force participation rate increased to 68.7 percent.

• Seasonally adjusted total actual hours worked per week fell by 0.9 percent.

IN A RECENT GLOBAL SURVEY

• Nearly half of businesses in Australia and New Zealand are axing employees or freezing staffing levels - three times more than eight months ago - on expectations that business conditions will worsen.

• According to a worldwide survey of pay and staffing at more than 2,500 organisations by global consultancy Hay Group in November, 17% of organisations in Australasia are decreasing staff numbers, and 27% are freezing them.

• Twenty-seven per cent expect business results to be significantly worse than targeted levels, compared to 7% in March.
Nonetheless, 64% of local organisations expect results close to targeted levels in 2008.

• The global survey found that Africa and the Middle East have been the least affected by the economic downturn, with only nine per cent of African companies and 12% of Middle Eastern companies reporting business results significantly below target.

• Local results were in line with the overall global trend.
The oil and gas sectors had weathered the downturn better than other industries, with 19% of respondents expecting business results significantly better than targeted.

• The retail sector was one of the hardest-hit sectors globally, with 63% of respondents expecting poor business results due to lower consumer spending and tighter credit markets.

• The survey also found that organisations were concerned about retaining top talent and critical skills, maintaining and affording competitive pay, and maintaining employee motivation.

• Fifty-three per cent of local respondents were changing or considering changing their budgets for base salary increase for 2009, with 24% freezing or considering freezing salaries for all employees.

IMPORTANT POINTS

• The figures in the Survey are gained from real salaries and provide a reflection of what the Retail employment market is actually paying.

• Frontline Retail uses these figures as a guide when advising Clients and Candidates on salary levels.

• In the case of salary packages, where a car or car allowance is included (in the groups surveyed a car allowance is rare), we have not included the value of the car or allowance in the salary figure in the Guide.

• Performance based bonuses are generally on offer for all levels of management and are excluded from these packages.

• As a general trend the more senior the position, the higher the deviation.

Retail Salary Survey Download - New Zealand 2008

We would like to express our gratitude to all those people who made this Survey possible by providing invaluable feedback which we feel has made it one of the most accurate and up to date surveys of its kind addressing the retail sector in New Zealand.

We welcome any feedback or comments regarding this survey whether positive or negative to ensure that it continues to be relevant to the New Zealand marketplace. Please contact your local Frontline Retail consultant in New Zealand should you require any additional information about local market issues.