By Strategic Pay Managing Director Cathy Hendry and EMA Employment Relations Consultant Lisa Oakley
In today’s climate, workforce planning is less about long-term certainty and more about building capacity for agility.
Many businesses are maintaining current headcount while anticipating the need to flex up or down rapidly, depending on how market conditions evolve.
In this environment, HR plays a critical role in scenario planning – not just identifying skills gaps, but understanding which capabilities are core, what can be scaled, and how to resource differently if business models shift.
To assist with this planning, every six months Strategic Pay conducts a survey of market pay data and industry trends from New Zealand’s most comprehensive remuneration database.
The latest results from April show a significant change in the top issues that HR managers are confronting in their staffing and rewards programmes.
At the end of last year, employee retention was the number one concern, whereas now the lacklustre economy and budget constraints dominate. These concerns are amplified by developments offshore and the uncertainty generated by US tariff policies.
But the New Zealand economy itself is still struggling, which feeds into the second major issue for HR managers: market pressures and salary adjustments.
While this concern has stayed constant, previously there had been greater pressure on pay increases as companies were faced with the challenge of staff retention. Now, these same concerns are more to do with how businesses are adjusting to tough economic conditions and balancing competing pressures.
This brings us to the third-ranked issue that concerns HR managers: strategic alignment and future workforce planning. Even though many companies face declining revenue, some are choosing to maintain existing headcounts for a bit longer.
But how do organisations determine an appropriate size for their workforce at a time of market uncertainty, and how do they plan for their workforce in the future?
In order to improve your workforce planning, it’s critically important to understand your competition and the remuneration market in which you compete.
There have been big changes in data over the past 12 months, so unless you’re in the practice of annual benchmarking, it’s quite possible you’ve fallen out of touch with market rates.
If you are implementing across-the-board increases based on inflation, rather than actual labour market movements, you might find that you’re paying too much for certain skills, or not enough for other skills – so make sure you are spending wisely.
HR managers should be aware of where the key talent is in their organisation, and which skill sets have the greatest market pressures. If you have a small remuneration budget, allocate it wisely.
Reviewing and reshaping the total reward offering doesn’t always mean spending more. It’s about understanding what employees value most. This might include flexibility, development opportunities, or even improved clarity around role expectations.
Regular listening and transparent dialogue help ensure benefits are aligned with what matters – and that you’re not investing in perks no one is using or noticing.
There are some great tools available, such as the Strategic Pay Excel-based tool RemWise, which helps managers distribute salary movements in a considered way. There are also cloud-based systems such as ELMO’s Remuneration Software, which can really help executives focus on key talent and high performers.
Effective internal communication can also play a big roll. Sometimes, organisations forget that they’re already providing a lot of benefits, which may or may not be valued by employees, simply because those benefits have not been communicated effectively. So, take the opportunity to communicate clearly.
Strategic workforce alignment also includes honest conversations about where the organisation is heading and what will be required in 6–12 months’ time.
Involving leaders early in these discussions creates ownership and helps ensure that future workforce decisions aren’t made in a crisis, but as part of a broader resilience strategy.
Be as transparent as you can about what’s going on. If the business is struggling, be clear about how you’re making decisions on budgeting, and communicate to employees what the total remuneration on offer is. And if you’re worried that some staff might get offered roles elsewhere, make sure that they’re aware of what their current total remuneration package is.
Don’t forget that performance incentives can actually be retracted. A good incentive scheme aligns to the company performance, so you have the ability to give high upside when the economy is going well and retract when the reverse occurs. This gives you a greater level of flexibility.
HR teams should consider how they’re equipping managers to hold human-centred conversations, especially when explaining tough business calls or limited pay adjustments.
Look into what else you can be offering in terms of flexible benefits on top of base salary. It’s important to ask your employees what they value in terms of benefits – there are some interesting offerings available.
It’s worth acknowledging that when salary increases aren’t on the table, other aspects of the employee experience rise in importance. We’re seeing a growing emphasis on the psychological contract – the unwritten expectations employees have about how they’ll be treated and what their experience will feel like. In tight budget times, it’s this emotional and cultural layer that can sustain engagement.
Finally, take the opportunity to recognise and celebrate success. Small recognition schemes can really make employees feel valued and improve your employee value proposition – visible support from leaders carries significant weight.
To further help you with your workforce planning, over the next 12 months the EMA will be presenting six practical webinars to upskill HR managers on a range of critical topics, with interactive discussions and practical case studies. The Hire to Retire HR Webinar series will cover: Recruitment and Onboarding, Culture and Wellbeing, Learning and Development, Performance and Succession, Transformation and Change, as well as Offboarding and Exits.
You can book all six webinars now to receive a bundle discount. Register now for the HR Webinar Bundle: The Hire to Retire HR Webinar Bundle – EMA – Employers and Manufacturers Association.
If you need help in building a positive workplace culture, improve staff retention and reduce costs, contact the EMA People Experience and HR consultants for export solutions and support at: Services: People Experience.
Strategic Pay is a key partner of the EMA, offering EMA Members expert advice on remuneration, performance development and performance improvement. EMA Members can receive a complimentary NZ Employment Policies and Practices report, which includes key remuneration data and insights across multiple sectors to guide Members to make well-informed workplace planning decisions for their staff. More information at Strategic Pay – Trusted Advisers in Remuneration.
