A financial expert has revealed why Kiwis should ask for more money than they actually want when asking for a pay rise.
Workers in New Zealand are in hot demand at the moment with a skilled staff shortage hitting nearly every industry. Healthcare, agriculture, teaching, hospitality and tourism are being hit particularly hard with many employers crying out for help.
Worker shortages along with high inflation is pushing wages up and many employees are looking for more money or a new job - and there are plenty out there.
Figures from Statistics New Zealand show wage inflation, which is measured by the Labour Cost Index (LCI) which takes into account all salary and wage rates, has jumped to 3.4 percent in the June quarter, up from 3 percent in March.
Average ordinary time hourly earnings rose 6.4 percent. That compares to annual inflation of 7.3 percent.
"The June quarter had the largest increase in LCI salary and wages rates since late 2008. Over the year, a steadily increasing number of wages have been raised to better match market rates, as well as attracting or retaining staff," Statistics NZ business employment insights manager Sue Chapman said.
"Nearly two-thirds of roles surveyed in the LCI saw an increase in ordinary-time wage rates in the year ended June 2022 – the highest level since this series began in 1993."
Strong wage growth and a shortage of workers means now is the perfect time to ask your boss for a raise - but it can be a daunting prospect.
Finance expert Frances Cook told AM's Ryan Bridge on Monday there is an art to asking for more money.
"Set up a meeting with your boss, it's a great time for workers now. I don't want to freak anyone out because everyone does get nervous about this…you set up these meetings and you say you want to talk about career development, which everyone knows what that means [because] you don't want to take your boss by surprise," Cook told Bridge.
"Then you sit down at this meeting and I think the best way to go in with this is the old compliment sandwich… Good thing, request, then good thing. So say something like, 'I really love working here, I've noticed that other job listings are paying a bit more at the moment, it looks like the market has gone up a bit so I would like this amount of money instead. And I would really like to have a good chat with you so we all find a number we are all happy with'."
Cook said another key is to ask for the higher end of what you want, so even if your boss negotiates down you're still happy.
"You always want to ask at the high end because it's a negotiation and your boss is probably thinking of the budget and you can give them a little win if you are asking for the top end of what you have seen similar jobs advertised for. So the key thing is to check out other jobs similar to yours and what people are asking for right now."
Cook said using the website whatsthesalary.com can be a good way to see what other jobs are offering if it's not obvious in the listing.
"So have a little look at that and then ask for the top end, maybe you will get it, fantastic but maybe they will nudge you down just a little bit and you will still be happy.
She said bringing examples of successes you've had in the role can also help you negotiate a pay rise.
"Anything you can show that is a real win for the company is great."
It comes as many Kiwis are struggling with the basics with high inflation pushing the cost of essentials such as groceries sky high. In response to rampant inflation, the Reserve Bank has raised the Official Cash Rate (OCR) which has pushed mortgage costs up.
