Expect a pay rise next year - expert

A recruitment expert says next year should see most Kiwis in line for pay rises.

And we have an election year to thank, Shay Peters of Robert Walters told The AM Show on Friday.

"What typically puts pressure on salaries is when we're in a tight labour market and things start to change - and we are seeing next year as being an election year, so what's going to happen there is we're going to see a slight change in focus with the Government trying to get a lot of projects over the line, and that's going to create job flow."

The other big factor he says is the tight labour market.

"What we can see right across the board is a lot of pressure on the labour market. We're almost at full employment - we're at 4 percent unemployment at the moment, which basically means everyone's in a well-paid job."

Over the past few years, new jobs have been easy to fill with record immigration. Although immigration is still high by historic levels it has come down a bit in the past couple of years,  though perhaps not quite as much as the Government promised when it came to power in 2017.

"The issue that we're going to have is obviously with tighter immigration laws in certain sectors... that's going to put pressure on the job market," said Peters.

In other words, with fewer potential staff to choose from, employers might have to offer better salaries to attract the good ones. 

Peters says immigrants are still needed however, as they bring "different ideas and suggestions" which also help businesses grow. 

As for how big next year's pay rises might be, Peters says expect 2 to 2.5 percent - that might not sound like much, but it's ahead of inflation, which hasn't been that high for eight years.