Employment on hold: EMA survey confirms trend

Media statement Thursday 10th July, 2008

Employment on hold: EMA survey confirms trend

Business is in plainly in decline but employers are soldiering on, and even planning modest pay increases this year.

These are among findings from the 932 respondents to the inaugural online survey of employment plans conducted by the Employers and Manufacturers Association (Northern) last month.

"While most businesses aren't planning to downsize, they are putting up their prices and not taking on new staff," said David Lowe, EMA's Manager of Employment Services.

"But they seem more uncertain about the future rather than expecting a rout; no one is expecting to crash and burn," he said.

Disregarding the contributions to their employees KiwiSaver accounts, 81 per cent of employers say they will increase staff wages this year.

The most common increase band is 2-3 per cent (for 36 per cent) then 4-5 per cent (for 26 per cent), followed by 1-2 per cent (for 12 per cent). Seven per cent say they will give more than a five per cent pay rise.

Some businesses are coping by putting their prices up.

"But as a third of businesses are not planning to raise their prices the increases seem responsible, and to take note of the Reserve Bank's caution about inflation," says Mr Lowe.

"In all 70 per cent of businesses say they will raise their prices: 37 per cent by less than five per cent; 26 cent expect to raise their prices between five and 10 per cent; just seven per cent plan prices rises more than 10 per cent.

"Only 11 per cent (106) are making definite plans to put off staff, though another 20 per cent (187) are uncertain or fairly sure they will. Over half (52 per cent) are definite they won't be making redundancies and another 11 per cent probably won't.

When staff leave, 50 per cent of employers won't replace them. Only 21 per cent say they would definitely replace them.

The level of resignations has been stable - neither increasing nor decreasing - in the three months to June. They were at the same level for 56 per cent of employers and for the others they were as likely to have increased as decreased.

"On this point the survey indicates employees still feel secure in their jobs," Mr Lowe said.

Staff being made redundant or not replaced are just as likely to be skilled (for 27 per cent of respondents) as unskilled (28 per cent), or both skilled and unskilled (45 per cent).

But employers report they had noticed in the previous three months it has been easier to hire skilled staff (71 per cent) though slightly harder to hire unskilled staff (for 52 per cent).

Overall a general downsizing is not planned in most cases, 54 per cent definitely not. Only 10 per cent have definite plans to downsize.

Business success has been static (for 26 per cent) or declined (46 per cent) compared to three months earlier. As usual success for some had improved (24 per cent) and even improved rapidly for four per cent.

Till the end of the year most respondents forecast a steady state of business success (23 per cent) or a decline (35 per cent).

But 42 per cent anticipated improved success.

ENDS

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