Higher salaries offered to attract new employees to fill the skills gap in 2022 could fuel a ‘loyalty tax’ businesses may be forced to pay to tenured employees, according to a survey by Hays.

According to Hays Salary Guide FY 22/23, of the 4,800 employees surveyed, 63% said they’d benefit financially from changing jobs.

This latest data adds to statistics Hays reported in a LinkedIn poll conducted late last year in which a small increase, or 8% of 18,045 respondents, was observed in the number of employees who received sign-on bonuses.

Hays New Zealand Managing Director Adam Shapley said a shortage in skills drove up salary offers in 2022. The report notes that 91% of employers are experiencing a skills shortage with 83% saying it will impact the effective operation or growth plans of their organisation.

“For skills in highest demand, employers offered a salary increase up to consumer price index to secure a candidate. This exceeded average salary increases for existing staff, financially penalising local employees who are acutely aware of the monetary benefit of changing jobs,” said Shapley.

According to the Hays Salary Guide, 77% of employers are anticipating increased activity and a majority of them at 61% intend to increase permanent staff levels.

Still, Hays reports, salaries are set to climb as employers prepare to combat skills shortages. Of the employers surveyed, 88% plan to increase salaries with 37% to increase above 3%, and 51% of employers to increase by less than 3%.

It seems increased salary offers and sign on bonuses have motivated employees to seek higher wages as data shows nearly half are expecting a raise of 3% or more and 84% believing their performance and demand for skills warrants a greater increase. More employees are also increasingly aware of their worth as 56% of employees note they are more confident to ask for a raise because of the skills shortage.