As we navigate the beginning of 2024, the landscape of the workplace is evolving, presenting both challenges and opportunities for employers and employees alike. Here’s a closer look at what to anticipate:
1. Heightened Employee Expectations
The prevailing reality of escalating living expenses is casting a shadow over the workforce and the burden of rising costs continues to weigh heavily on employees’ minds. This leads to heightened expectations in terms of compensation and benefits. The workforce is increasingly prioritising fair remuneration and improved working conditions, making it essential for employers to consider these concerns as part of the strategy.
Be prepared for the fact that bargaining may take longer to conclude as part of this!
2. Cost Containment Strategies
In response to economic uncertainties and the imperative of long-term sustainability, companies are focusing on containing costs wherever possible. This may translate to measures such as streamlining operations, optimising resources, and reassessing discretionary spending. While these efforts are essential for financial resilience, they are certainly at odds with the expectations of employees when they come to a collective bargaining round.
3. Union Priorities and Negotiations
Unions are actively engaged in advocating for their members’ interests, including securing unfinished Labour Party agenda items or election promises through collective bargaining. The intersection of political agendas and workplace policies always adds a layer of complexity to collective bargaining. As in the past, this requires a delicate balance between organisational objectives and employee perceptions.
4. Premium on Specialised Skills
Despite efforts to control costs, certain specialised skills remain in high demand, commanding a premium in the labour market. Companies seeking to retain these skills must be prepared to offer competitive compensation packages to attract and retain top talent. Strategic investments in upskilling and talent development may also prove beneficial in addressing skill shortages internally. This market-driven reality underscores the value placed on expertise that is essential for the sustained growth and innovation of organisations.
5. Collective Agreement Settlements
Our prediction for the range for collective agreement settlements in the first half of 2024 is between 3.5% and 4%. Settlements within this range reflect a balance between expectations for increases to balance CPI and companies’ objectives of managing costs prudently.
In conclusion, 2024 promises to be a year marked by a delicate equilibrium between organisational sustainability measures, union/member/employee expectations, and the strategic retention of critical skills. Navigating this terrain will require a nuanced approach, as organisations strive to balance financial prudence with the imperative of fostering a resilient and skilled workforce.
Both employers and employees must remain adaptable and responsive to changing circumstances. By prioritising open communication, mutual respect, and a shared commitment to sustainable growth, organisations can foster productive work environments conducive to long-term success.
As we navigate the ever-changing landscape of New Zealand’s job market, it’s important to stay informed and adapt to the shifting tides. Keep an eye on the market, as understanding these trends will help you make smart choices for your collective bargaining strategy.
If you need any assistance to apply the broad trends to your organisation’s situation, please reach out for a confidential discussion.
Anna Holmes is a collective bargaining and industrial relations specialist extraordinaire. For the past 15 years she’s worked with companies of all sizes both here in New Zealand and Australia.