A recent Hays survey has revealed that New Zealanders are more willing to sacrifice salary for variable rewards than Australians.
The survey conducted across 1,510 individuals found that 41% of Australians were not prepared to cut their base salary in order to potentially earn more though a performance-based bonus.
46% of Australians would take a base salary cut of up to 20%. A further 13% would take a cut of more than 20%.
This contrasts with New Zealand, where 60% of respondents said they would take a base salary cut of up to 20% and another 8% would take a cut of more. Only 32% would not be willing to take a base salary cut.
These results imply that Australians are more risk averse than New Zealanders and value a bonus less. New Zealanders on the other hand are more likely to believe in the potentially higher upside a variable bonus can provide. We note that in our research bonus opportunities in New Zealand are lower than in Australia.
The different attitudes towards bonuses will affect how residents of the two countries value their salary packages and may have implications for how companies with employees in both countries need to adjust remuneration for optimal results.
Australian employees may feel happier with a higher proportion of fixed remuneration while New Zealanders conversely could thrive under a higher level of variable pay.
The varying economic circumstances in the two countries may have had an effect on the results. The poll was conducted online in January and February 2015.
Australian consumer confidence in March 2015 was 99.50, which decreased from 100.70 in February, with both below its long-term average from 1974 to 2015. Consumer confidence is reported by Westpac.
Business Confidence in Australia decreased to 0 in February of 2015 from 3 in January of 2015, although it is far lower than the long term average from 1997 to 2015. Business Confidence in Australia is reported by the National Australia Bank.
The last measurement of consumer confidence in New Zealand was in the fourth quarter of 2014. It measured 114.80, a drop from 116.7 in the third quarter but higher than the long term average from 1988 to 2014. Consumer Confidence in New Zealand is reported by Westpac.
Business Confidence in New Zealand increased to 34.40 in February of 2015 from 30.40 in December of 2014, higher than the long term average from 1970 until 2015. Business Confidence in New Zealand is reported by the ANZ Bank New Zealand.
The New Zealand dollar has been rising against the Australian dollar for the last three years. In 2012, a New Zealand dollar bought less than 80 Australian cents. Now it will purchase almost a dollar.
New Zealand’s cash rate has risen from 2.5% in 30 January 2014 to 3.5% now. Australia’s cash rate was reduced in February 2015 from 2.5% to 2.25%. It had been stable at what was a record low rate of 2.5% since August 2013.
According to the Reserve Bank of New Zealand, since the third quarter of 2013, New Zealand’s real GDP growth has outpaced Australia’s, with the exception of the last quarter, when Australia’s GDP growth matched New Zealand’s.