Overpaying just as risky as underpaying employees, says Hudson
Overpaying employees is just as risky as underpaying them, according to recruitment firm Hudson’s latest report, as no organisation wants to be represented by someone driven by price.
The key to effectively managing salary budgets is to adopt assessment methods that identify high performers who warrant additional investment and resource, Hudson said.
The firm found that seven out of 10 employees from New Zealand and Australia believed it would be easy to find a similar job, with comparable pay and conditions, while salary proved the biggest factor of retention for more than four out of 10 employees.
“All of the industries surveyed reported high levels of salary increases, compared to the 2 to 4 percent national average,” Hudson said. “Employees in ICT recorded the largest salary increase, with 27 percent of employees receiving a pay rise of more than 10 percent.”
“The sales, marketing & communications and HR industries also offered a high proportion of salary increases, with more than one in five employees receiving a pay rise of more than 10 percent.”
The report found the best way to retain staff though was to identify high performers prioritising their talents.
“Actively assessing candidates against criteria proven to predict high-performance helps organisations identify the most suitable fit by including assessments that measure candidates’ motivational and behavioural attributes,” Hudson said.
In New Zealand, employees need to move beyond assessing candidates solely on technical competence and experience. Businesses that took a more holistic approach proved 91 percent more successful when hiring staff, the report said.
The largest volume of salary increase was in the sales, marketing and communications industry, up 57 percent, followed by ICT, with 27 percent of employees receiving a 10 percent pay rise.
Senior talent remained a scare resource across most industries, apart from in accounting and finance, with 65 percent of organisations finding it difficult to source employees at the senior management level.
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