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What are your staff worth?

Wages typically make up more than half of a retailer’s outgoings, so it pays to take a little care when you’re allocating them. NZ Retail has teamed up with Frontline Retail to provide some guidance.

December 13, 2018 | Sponsored Content

Retail has New Zealand’s second-largest workforce, with 374,900 people employed in the retail trade as of May 2018.

Frontline Retail has compiled a set of data on current retail wages by analysing the new base salaries and verified salaries prior to changing jobs of candidates it’s placed over the last 12 months. Peter Davis, managing director of Frontline Recruitment Group, says these insights will help both employers and staff understand the recruitment market.

He says candidates are now very well-educated with regards to what they’re worth, reporting that last year, the difference between the average salary candidates asked for and what they received was only $350.

“This is an incredible figure,” Davis says. “It indicates that they have very realistic expectations about what they should be earning, and that they are not willing to accept much less than that.”

What does the data say?

According to the data, nearly a quarter of retail employers across Australia and New Zealand intend to increase their full-time staff over the next 12 months, but 40 percent expect to stick to the same staffing levels. Around 11 percent predict their staff levels will decrease.

As for salaries, 58 percent of retailers reported to Frontline Retail that they expected salary levels to be impacted by performance. The changes to minimum wage legislation will also impact salary levels for 45 percent of retailers. Other factors expected to impact retail salaries on a lower level are domestic economic conditions, inflation, competition and global economic conditions.

Forty percent of respondents forecast no salary increases for employees over the next 12 months. Of those who did expect to offer a payrise, a little under 25 percent planned to vary their increases according to performance. A further 17.8 percent would only offer increases to the best-performing, and another 17.8 percent spread their increases evenly across everyone.

Applicants seeking jobs are increasingly taking longer to be placed, with the average number of days from application to placement creeping up from 25 days in 2008 to a little over 30 days this year. The length of placement time is also informed by salary bracket – applicants seeking up to $70,000 take 29 days, but those in the $100,000 plus bracket take an average of 37 days to be placed.

Retailers responding to Frontline Retail’s survey rated both assistant manager and casual staff roles as being the hardest to fill, with salespeople the next most difficult. Store managers responsible for turnovers of more than $15 million were also rated as tough roles to fill.

What’s happening in Auckland?

Asked what’s affected the Auckland retail recruitment environment lately, Frontline Retail’s Auckland agency manager Samantha Martch says Auckland’s key challenge right now is a market that’s short of candidates. Staff are so scarce that the official unemployment rate has hit an eight-year low of 4.5 percent.

“The General Election not only affected the New Zealand dollar and consumer confidence, but employers put the brakes on while they waited to hear the outcome of the increase of minimum wage and reducing net migration,” Martch says. “The market slowed but remained steady, labour demand had improved and employment was up by 2.2 percent.”

Other challenges Martch mentions include: increases in wages affecting budget spend; unrealistic salary expectations from candidates; clients not being as open to candidates on work visas, limiting their pool of candidates; and an increase in petrol prices limiting the distance candidates are willing to travel for a role.

Martch advises retailers looking to manage these challenges to make sure they offer a supportive culture with comprehensive training and succession planning. The most important factor in securing quality talent is giving recruitment partners such as Frontline Retail exclusivity to roles, Martch says.

“Focus strategy around long-term recruitment – succession planning – and work within realistic timeframes, especially with hard-to-fill roles.”

On the positive side, international players have recently entered New Zealand and opened new stores, creating new retail jobs. The luxury and design sectors are continuing to grow, and shopping centres including Commercial Bay, 277 in Newmarket and Tauranga’s The Crossing are renovating or opening.

Frontline Retail’s Auckland executive agency owner Tania Grieg says the executive market has also reacted to recent changes in the political climate, resulting in candidates seeking security in their current roles.

However, Greig notes several retailers are in growth mode right now, describing an increase in ecommerce opportunities as the biggest trend of the last 12 months.

“The growth in ecommerce has had a huge impact on our market, opening up many new employment opportunities across the digital marketing, graphic design, website management and ecommerce management space.”

Challenges Greig has noticed include the increasing difficulty of placing skilled migrants due to the tightening up of visa processes, despite a shortage of skilled applicants. Clients are missing out on some quality candidates through reluctance to engage in the processes.

“Uniquely on both sides, the market has been very competitive in regard to attracting top talent, and for candidates securing new roles.”

She recommends that retailers aiming to secure quality talent be open-minded when reviewing resumes, and consider offering extras such as flexibility of hours and competitive vehicle allowances.

“It’s also critical to move fast to ensure you don’t miss out on candidates,” Greig says. “Creating a strong, positive and aspirational company culture within your organisation is a key factor.”

Martch highlights the ongoing conflict between ecommerce and bricks and mortar when asked about industry trends:

“The growth in online is in the ‘buying space’. This activity of buying is more about best price, range, assortments and maximum convenience. This is the platform for ecommerce and where the likes of Amazon and Alibaba play, and also where online growth is coming from.

“However, shopping is human, tactile, social, interactive and the shops are crucial, so retailers who can’t see the difference will struggle and won’t survive.”

Other trends Martch identifies include click and collect, and flexible money solutions for consumers. She says this shows that retailers are choosing to direct their investment budgets towards technology and ecommerce.

Greig and Martch both feel optimistic about the next 12 months with unemployment low and consumer confidence up. The new shopping centres are opening doors for candidates beginning their retail careers, says Martch, and stores providing unique experiences are trading “really well”.

“As retailers continue to identify top talent in the market, we will continue to work alongside employers and our passive candidates who are ready to hear about new exciting roles as they come up. We remain excited to work within the retail sector with its changing landscape as we are adaptable and we love what we do.”

How about down south?

While Wellington has been a hive of activity with national and international retail chains opening up, Frontline Retail’s South Island and Wellington agency owner Kiri Henare says the biggest changes in the South Island are to do with closures. Especially in fashion, Henare says a number of retailers have failed to adapt to the changing market as international retailers open across the country in the last 12 months.

Henare says the retailers who are flourishing are “working really hard to enhance their customers’ experience.”

“Most retailers have now adapted to either click and collect, online check out or a buy now pay later for retail consumers, which is a huge game-changer.”

Christchurch’s ongoing resurrection has also had significant impact. Henare says the quake-hit city is beginning to stabilise from mass development into growth as consumers slowly return to the CBD. The addition of more international flights leaving from Christchurch should make it more attractive to tourists and “create a buzz” in the central city, she says.

The retail landscape in Queenstown and outlying regions across the South Island is shifting as retailers look to new sites to expand their businesses, but this has created difficulties in smaller regions where there’s a shortage of candidates.

“Places such as Dunedin and Nelson tend to have a very stable long-standing staff tenure, resulting in a resistance to changing to the new and unknown.”

Queenstown is the one exception in a landscape where residential housing tends to be affordable, meaning the South Island is seeing an increase in candidates looking to relocate from Auckland.

“Queenstown always remains a challenge for the retail space,” Henare says. “Working with a high volume of international candidates who are travelling to New Zealand, there tends to be a higher risk when recruiting for management roles where long-term tenure is important.”

Attracting the right candidate is proving especially difficult in Wellington this year, Henare says. She notes the majority of candidates have stopped applying for roles, instead preferring to be passively headhunted.

 Henare’s advice for retailers seeking quality talent is to show the benefits of their business over the competition, demonstrating succession planning, future business opportunities, and the kind of culture they’re instilling in their teams.

“Candidates commonly leave their current roles due to reaching the peak they feel the role can offer, or they are unhappy with the current company culture.”

The next 12 months will continue to be a “candidate’s market”, Henare believes, so retailers will need to be much more vigilant when securing new talent for a role. Speaking about retail as a whole, Henare believes we will see many more social media influencers partnering with retailers; buy now pay later services will continue to expand; and a heightened appreciation of in-store design and ambitious fit-outs will continue to enhance the importance of the customer experience.

For more information visit; www.frontlineruitmentgroup.com

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