Talk of wage pressure doesn’t show in data

There’s been much talk of increased wage inflation in the consulting sector, with staff requesting hefty increases based on anecdotal market pressures.

At first glance, it seems plausible.

Our borders are closed, so our ability to access overseas talent is constrained, and talent constraints can often increase salaries. But in a post-COVID environment, it’s not that simple, and there are myriad factors at play.

Yes, we have constraints in some particular areas, but it’s certainly not universal.

So, we decided to look at the data from our most recent Pulse survey on salary movements to see if talk of large increases are real or imagined.

Pulse survey

In partnership with Strategic Pay, ACE New Zealand has conducted a pulse survey on salary movements since publishing the ACE New Zealand report in September 2020. The survey was conducted from December 2020 to January 2021.

Only direct participating organisations received a complimentary copy of the research findings, as that’s their reward for providing their data.

But, for the benefit of those who didn’t participate, here’s a quick summary of what we found.

Summary of results

This data comes from detailed information provided by 66 ACE New Zealand member firms.

Member firms were asked to provide the estimated percentage increase in base salary since 1 September 2020. The table below summarises the overall increases per region.


So, what does this table tell us?

Let’s look at Auckland as an example, as it’s the largest market and typically the one where we see tend to the most significant pressures and increases

  • 56% of firms have seen no increase in base salary.
  • Another 31% of firms have seen increases of between 1% and 3%
  • Only 10% of firms have seen a rise of 5% or more. While to the untrained eye, that might seem high, it is actually a decrease from 28% last year!

So, is there some upward wage pressure? Yes, there is.

Is it significant? Not at all when compared to this time 12 months ago.

So, talks of massive supply and demand challenges driving massive salary increases seem to an example of where the anecdata (in essence, peoples’ reckons) doesn’t play out in the facts.

If you participated in the survey, thanks for your input, I’d encourage you to make use of it as you undertake your remuneration reviews. If you didn’t participate, make sure you do this year, as this type of industry-wide data is critical to your business.

Paul Evans

Chief Executive, ACE