New Zealand Workers Struggle To Meet Basic Living Costs As Prices Soar

• Two out of five employees in New Zealand (41%) are struggling to cover their basic living costs
• Petrol is the hardest item to afford, and the thing NZ workers are most likely to reduce spending on
• Remuneration is still the biggest motivator for employees in NZ in Q2
• Yet less NZ employees are anticipating a pay increase this year
• Taking a legitimate sick day and arriving at work feeling unwell has peaked this quarter

Auckland, New Zealand 21 July 2022:

Two out of five employees in New Zealand are struggling to cover their basic living costs amid soaring prices, according to the latest industry research from HR and payroll software provider, ELMO.

The ELMO Employee Sentiment Index Q2 2022 revealed that petrol, housing costs, groceries and fresh produce were the hardest things for employees to afford over the past three months. The majority of respondents (63%) said the cost-of-living pressures are negatively impacting their wellbeing and as a result of the price hikes, 47% of respondents plan to ask their employer for a pay increase.

Perceived economic security among Kiwi workers has also hit an all-time low. The research found only one in ten (9%) employees now feel secure with the economy, compared to more than double that this time last year.

Despite the economic uncertainty, more workers in New Zealand actively searched for a new role in another company last quarter (18%). There was also a slight increase in the number of respondents who applied for a new role, and those who interviewed in a new company. The talent shortage in New Zealand likely contributed to the uptick in job hunting, as employees continue to take advantage of the tight market and new opportunities.

Commenting on the findings, CEO of ELMO Software, Danny Lessem said: “What we are seeing in the Q2 ELMO Employee Sentiment Index is the macroeconomic factors, in addition to the social, political, and environmental issues impacting New Zealand and the world, are causing a shift in employee priorities.

“The overwhelming feeling of uncertainty is prompting workers to search for more, or fairer pay.”

Three quarters (74%) of employees in New Zealand support an increase to the minimum wage, with 62% believing a minimum wage rise would help ease the cost-of-living pressures.

Petrol was ranked as the most difficult item to afford in New Zealand in Q2, followed by groceries, housing (rent or mortgage repayments), fresh food and produce, and electricity, making up the top five. Petrol was the most difficult to afford in the regional areas of the North Island (40%) and Christchurch (42%) with housing the most difficult to afford in Auckland (37%) and Wellington (32%).

The insights are the latest findings from the quarterly ELMO Employee Sentiment Index commissioned by ELMO Software and conducted by independent research firm Lonergan Research surveying 524 geographically dispersed working New Zealanders. The ELMO Employee Sentiment Index offers insights into the actions, attitudes and behaviours of New Zealand workers, analysing the prevailing sentiment within the workforce, and tracking changes in perceived job security and the employment landscape each quarter.

The cold and flu season has dominated in New Zealand in Q2 with the number of workers taking legitimate sick days increasing by almost 10 percentage points to 40%, and who arrived at work feeling unwell, taken a mental health day, or taken carer’s or compassionate leave all increased. In addition, feelings of being overwhelmed with the amount of work needed to be done, taking on more responsibility at work and feeling ‘burnt out’ increased this quarter.

While most employers have encouraged the return to the office in recent months, it’s clear the cost-of-living pressures, which includes rising petrol prices, together with the colder winter months could reverse the conversation to negotiate more flexible, hybrid and remote working conditions, with working from home likely to be a preferred option in order to save money and remain healthy.

When looking at employee recognition and remuneration in April - June 2022, the number of employees anticipating a pay rise within the next year fell by almost 10% compared to the previous quarter. Just over half (57%) said they are remunerated for their work fairly, while 65% said there are recognised for their contributions. Remuneration continues to be number one priority for New Zealand jobseekers in Q2, followed by flexible/remote working and the stability of the organisation.

Lessem said executives who have taken note of the severe talent shortage in the market and implemented tailored strategies to reward and recognise top talent will reap the benefits over the coming months.

“The focus for business leaders in the second half of 2022 needs to be on empowering managers to understand the individual personal and professional drivers of their teams,” he said.

“It’s a key time for implementing strategy to maintain engagement while driving a continuous commitment to high performance, collaboration and celebrating successes in a hybrid, health-conscious world.”

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