On average, around forty percent of departmental costs are staff employment related, including wages and salaries, superannuation, performance pay, redundancy and retirement. Agencies also have costs associated with their HR function, which run the people policies and processes to effectively recruit, develop and manage staff.
Remuneration of employees is an important employment condition that is necessary to support an organisation's workforce to achieve its business objectives. Annual remuneration adjustments are done through a combination of collective agreement bargaining and organisational remuneration system review processes.
All State sector agencies, except state-owned enterprises, must take into account the Government's expectations for pay and employment conditions including all processes for adjusting remuneration and conditions, including collective bargaining. Adjustment must be affordable and sustainable within baseline funding, and should not lead wider labour market movements and trends. The section below on sector wage movements indicates that in general the Government's expectations related to pay and employment conditions have been met. For further information on the Government's expectations refer to: https://www.publicservice.govt.nz/govt-expectations-pay-employment