A new study gauges New Zealand firms’ plans for salary increases over the next 12 months.
Most New Zealand law firms expect to increase salaries by the same amount as the consumer price index or greater, a survey reveals.
Ninety-three percent of the 62 New Zealand firms surveyed in the inaugural ALPMA/McLeod Duminy New Zealand Legal Industry Salary & HR Issues Survey planned to pay increases on or above the CPI over the next year.
According to Statistics NZ, from the March 2014 quarter to the March 2015 quarter the CPI increased a mere 0.1 percent.
The survey results have surprised McLeod Duminy research partner and legal recruitment consultant Kirsty Spears.
“I thought there would be a few more [salaries] remaining static as that’s been the trend for the past few years,” she told NZLawyer.
“It is good to see firms are responding positively to market demand.”
Nearly half (48 percent) of firms surveyed expected individually negotiated increases above the CPI for staff salaries, while 45 percent anticipated to pay increases equivalent to the CPI.
Four percent of respondents, all from small firms, were planning partial wage freezes, with some individual pay increases below CPI; while three percent of firms planned to implement a total wage freeze.
Since the GFC, pay rises across the board had been pretty flat, with only star performers receiving increases – many of which were just “going up a band” for their PQE (post qualification experience), Spears said.
“What’s been interesting for us just over the last six to twelve months is that salaries come back onto the agenda for people.
“Everyone had sat on their hands long enough. They were prepared to be patient, and that patience is starting to run out a little bit.”
Salary was always a conversation that was quite far down the list for candidates compared to other aspects such as in the quality of work, colleagues and clients.
“But salary was creeping up and becoming a higher priority. It was the second or third conversation we were having, as opposed to the fourth or fifth.”
It’s not just pay packets going up. A number of firms are looking to recruit in bid to expand business.
Eighty-one percent of firms surveyed planned to recruit lawyers in the next financial year and 60 percent planned to hire secretarial staff. Thirty-five percent of firms also planned to recruit legal executives, and 30 percent expect to hire administrative staff.
Sixty-three percent of firms planning to recruit said they were replacing existing staff, while over a third (37 percent) indicated they were hiring with the goal of growing their firm.
Of those recruiting for expansion, 52 percent planned to grow by hiring lawyers and legal executives, 13 percent by hiring new legal secretarial staff, 12 percent by hiring legal executives and 10 percent were planning on boosting their business development and marketing staff.
The legal recruitment space overall was strong this year, Spears said.
“There seems to be a good number of roles on and what’s even better about that is we haven’t got 20 intermediate commercial property roles; we’ve got all sorts of everything – a broad spread of seniority, a broad spread of disciplines, a broad spread of types of firms. There’s not just one area that is particularly buoyant.
“It’s definitely the first time for a while that we’ve seen all the stars aligning to make a good market, particularly for job seekers. And I think, potentially for firms as well. You could argue it’s good for both, as candidates who have been sitting on their hands for a while and might have the appetite to move – law firms could take advantage of that and get their hands on some good people.”
