Underpaid Kiwi executives

There are a few million dollar earning executives in NZ – and the Herald’s Owen Hembry believes that we are now on par with Australia, but that there is a gap underneath that.

While we have a handful of CEO level people being paid well, there is a big payment hole in the next two layers down. Look around the advertisements online or in the papers – and count how many jobs there are for over $200k per year. How many over $400k? Not many. Indeed Trade Me Jobs salary ranges max out at “over $120k” (174 jobs) and while Seek doesn’t let you search by income, it’s executive section starts at just $80k, and there are only 25 listings in Auckland and 5 in Wellington. (That’s right – Trade Me has more top end jobs than Seek).

I would guess (or hope) that many of the mid tier ($200k+) jobs get placed by headhunters, but this is not a great way to attract back expats, who would not be plugged into the networks here.

When Government jobs are paying more than private sector jobs, that shows we have a real issue with our private sector. The Sheffield survey says that the median CEO income here is $250k, which is $185k USD, or about what year 2 consultant or lawyer in a top US firm would earn. That doesn’t leave a lot of headway for the year 6 consultants or lawyers, or senior corporate types.

Now Boards and CEO’s may think this underpaying is ok, as it keeps costs down viz a viz overseas, but it is not. It slows their medium and long term growth as there is a talent gap between them and their overseas competition. That talent gap is hard to quantify, but looking at the state of our various industries versus their overseas counterparts is an easy place to start. Customer service is generally pretty good, but strategy and growth are not.

There is a prodigious amount of Kiwi born talent scattered throughout the world – the ones that went on their OE and never seemed to come back. Many of these folk try to come back, or at least visit and scope out the scene every so often, but the problem is that there is nothing here.

Companies believe they can get away with it as there is the ever-present ‘Kiwi lifestyle’ that means you can underpay people here. In the short term that may be true, but companies are crippling their growth by not attracting and retaining the best people, and to do that they need to open their checkbooks.

Underpay at your peril