Employers often have the upper hand in pay negotiations.

This is because of 'asymmetric information' – bosses can easily find the going rate for a job. It's like a card game where your opponent sees the cards in your hand while you can't see theirs.

Companies rarely allow staff to talk to each other about salaries. In some workplaces sharing salary information is an offence.

Employers compare your pay with that of other employees. They also usually have access to wider industry pay information either through organisations or by buying third-party salary reports.

You'll struggle to find this information. Some recruitment advertisement offer clues.

However, recruiters are often coy about exact salaries. They don't want existing staff to know what they pay newcomers.

Even when you are the recruit, employers often won't tell you the salary until later in the recruitment process.

When you apply for a new job, you need to get as much salary information as possible before negotiating. You also need to know if it is worth negotiating.

Likewise, if you want a pay rise from your existing employer, you need to know what others doing the same job elsewhere earn. This gives you useful ammunition. It also lets you know whether you should stay or move if your negotiation fails.

Resources for New Zealand knowledge workers wanting to compare pay rates.

• Hudson has good pay data for IT, finance, accounting and office workers.
• Absolute IT has a tool for finding pay rates in IT jobs, but you have to give personal details to use it.
• Hays offers NZ salary information from its Australian site – but again you have to give personal data.
• Frog recruitment has basic pay information for a range of knowledge worker roles.
• TradeMe's salary guide covers the widest range of jobs.
• Seek's salary centre uses information from Robert Walters.

Knowledge workers make a living by dealing purely with ideas and information.

The term has only been around for 50 years. Writer and management expert Peter Drucker first used knowledge worker in his 1959 book "Landmarks of Tomorrow".

Drucker modestly said he was only the second person to use knowledge worker. He said it came from Fritz Machlup a Princeton economist.

Either way, Drucker popularised knowledge worker spending years expanding on the original idea and its wider implications.

Today's knowledge worker

Knowledge worker is widely used today. While people generally understand the term's meaning, there is still misunderstanding about its exact definition — even among knowledge workers.

Some think knowledge worker only applies to people working in information technology or elsewhere in industry using tools created by IT workers.

IT workers are only a subset. Anyone who makes a living out of creating, handling or spreading knowledge is a knowledge worker.

This covers a wide range. Teachers, trainers, university professors and other academics are clearly included. Writers, journalists, authors, editors and public relations or communications people are all knowledge workers. Lawyers, scientists and management consultants can also all be described as knowledge workers.

Educated workers

One key difference between knowledge workers and other white-collar workers is the level of education and training. Some knowledge workers don't have a formal tertiary education or high-level training – but they are a minority.

As a rule, knowledge workers have at least a university undergraduate degree, but that's not always the case.

Older knowledge workers may have fewer formal qualifications. That's partly because higher education was less available when they started out — and, anyway, university isn't the only path to knowledge.

Another reason is practical experience counts for a lot. But the key here is knowledge workers
each have a personal knowledge store they apply in their work.

Knowledge workers are well paid compared to other groups of workers – some are extremely well paid. Some knowledge workers join unions, but they are not usually organised in that sense.

This can lead to forms of genteel exploitation: few knowledge workers get paid overtime yet most are expected to voluntarily work for considerably more than the basic 40 hours a week.

Knowledge skills are mobile

Knowledge workers are more mobile than industrial workers. They can take their expertise elsewhere at the drop of a hat. This happens all the time.

An employer who abuses knowledge workers' professionalism is likely to see their most important assets walk out of the door one evening and never return. This applies as much today as it did when there were more jobs around.

Few governments have come to terms with the implications of having a highly mobile, highly educated, knowledge workforce. Just as knowledge workers can quickly find a new employer if necessary, most can move freely between countries. Any nation that doesn't look after knowledge workers can expect – over the long-term – to lose them.

This applies in New Zealand, which operates a progressive income tax system that, at times, appears deliberately designed to alienate knowledge workers. To understand this, compared the marginal and absolute rates of income tax paid by most New Zealand knowledge workers, they are noticeably higher than in most competing nations.

When I wrote the first draft of this post (it originally appeared in a different format in 2001) the same could be said of Australia. Since then Australia has moved to correct its tax system and is attracting 40,000 New Zealanders each year, most of those emigrants could be classed as knowledge workers.

In the 1960s there was a lot of talk about a 'brain drain'. If anything the flow of knowledge workers migrating to more benign economies is accelerating.

Drucker distinguishes between various classes of knowledge worker.

High-knowledge workers include professional groups such as doctors and teachers deal mainly in the realm of the mind while the knowledge technologists work with their hands and brains in the IT industry, medicine and other areas. Although both categories of knowledge worker are growing, the bulk of growth comes from this second group.

The National Business Review reports  Self-employment can be "a life of misery".

I wish I knew this before embarking on my new life as a freelance journalist. Apart from dealing with taxes – the word misery doesn’t capture the nightmare – my experience is more of loneliness than anything else. I miss being able to bounce ideas around with co-workers.

Many of us work in the part of the economy where there are no jobs, just clients and projects. We market our services, try to find interesting opportunities and finance our larger interests with the revenue. We’ve been out of the hierarchy for so long that it’s become unappealing.

John Sumser writing on the joys of being unemployable explains life as a modern knowledge worker.

Sumser say knowledge work rarely aligns with jobs and companies haven't yet got their heads around the idea of employing people for projects.

We're moving to a world where people work on a series of short, independent gigs.

Recruiters are brutal when sifting through resumes and CVs. As Brad Remillard explains in  How Recruiters Read Resumes In 10 Seconds or Less it seems disrespectful, but from their point of view it makes sense.

He says his first pass over a pile of resumes is box-checking. He can quickly rules out many candidates in a matter of seconds. Here's an example of how he works:

Industry. If my client is in banking and your background is primarily manufacturing – goodbye.  These two often are so different that the client isn’t open to considering such different industries. This works both ways, if you have a manufacturing background I’m not going to consider someone with banking. 2-3  seconds to determine this.

I've hired many journalists in my time and I usually take a similar approach – at least with the first cut. If I advertise a job and it asks for X,Y and Z, then I toss out all the applications which don't have them.

And because I'm an editor, when I hire journalists I immediately cut applications or CVs with spelling or grammar mistakes. I'm unlikely to keep poorly written ones either.

Things might not look too hot now, but knowledge workers will soon be in demand again. Employers who showed a dark side during the recession will struggle to fill vacancies.

Despite the recession, New Zealand still has a severe shortage of building industry skills and there are pockets of the IT business where vacancies have remained since the global economic meltdown began.

Australia already shows signs a severe shortage of IT skills could hamper companies and government departments as early as next year.

In Demand for ICT professionals on the rise, bottom is in Stan Beer at iTWire reports; “The bottom in ICT employment has been reached and demand for skilled jobs is once again on the rise, according to the latest market survey from a major technology recruiter. The news adds to a growing list of evidence of a return to health of the ICT jobs scene.”

A week earlier ITNews covered a report from Australia’s largest recruiter Peoplebank saying the demand for contractors was rising. A similar story appeared in CIO magazine in June with Seek Employment noting the overall job market was stabilising with IT consultants in high demand.

Australia’s ITNews reprinted a story from Britain's Computing newspaper on July 7 saying the antipodean nation is busily recruiting IT specialist in the UK to meet a shortage.

The Australian reported on a skills shortage in research organisations in Upgrade ignores skills shortage (story no longer online). And the New Zealand Herald reports there are many shortages in engineering.

New Zealand CIO magazine carried a report suggesting most IT employers face a skills shortage despite the recession. Despite downturn, opportunities remain for APAC IT candidates suggests one in four tech employers expect to increase their headcount this year. The story singles out specific skills in business analysis, datawarehousing, ERP (Oracle/SAP), web development and infrastructure (architecture) as being of particular interest.”

Some shortsightedness is in evidence in IT training budgets slashed at ITNews which suggests employers have slashed skills spending and can expect to see a serious skills vacuum by 2112.

What does this mean?

First, it’s a safe bet the skills shortage will return to Australia in the next year or so and to New Zealand soon after – the two countries are effectively a single market for knowledge workers. If anything it could be worse than before for a couple of reasons. Many skilled workers will have drifted off into other occupations or even early retirement. At the same time employers have cut back on training during the recession. While there are increased numbers of people taking tertiary courses in technology and similar subjects, many won’t enter the workforce in time for the recovery and they’ll have knowledge, but little experience, which means only a handful will hit the ground running.

Employers who behaved cut back staff, skimped on training or held on to skilled workers and pushed them too hard during the recession will all suffer once the skills shortage kicks in again. Knowledge workers will be able to drive better bargains – and recent experience will teach people to look beyond the pay packet.

The optimistic interpretation of the latest Olivier Job Index information technology figures says while the number of job ads continues to fall – the rate at which job ad numbers are falling has slowed. In other words, things are getting worse, but not dramatically so.

Robert Olivier says things are stabilizing.

The Olivier Job Index measures the number of advertised job. In June the number of tech jobs fell 1.9 percent from May. They were down almost 57 percent from the same time a year ago. Both numbers represent a faster decline for tech jobs than for the overall job market.

According to a report last week in The Australian (Tech employment pool drying up (story no longer online) by Jennifer Foreshew) only 16 percent of senior managers in Australian corporations expect to hire staff in the next 12 months and about a third intend to reduce their headcount. Foreshew spoke to a number of companies who made similar comments about a lack of new work.

Official figures issued by Australia’s Department of Education, Employment and Workplace Relations (DEEWR) on Friday say the number of IT professional job vacancies dropped 7.5 percent in June compared with May. Year-on-year the total number of jobs declined by 63 percent.

New Zealand IT positive

A report in today’s Computerworld New Zealand (New Hudson survey shows IT more positive by David Watson) draws on quarterly figures from the recruitment firm Hudson. It says a net 16.4 percent of employers intend to increase permanent staffing levels in the June to September quarter. That’s up from the previous quarter’s 7.7 percent figure.

Computerworld Australia reports IT job advertisements continued their slide in May, which is bad news for tech-oriented knowledge workers. Overall job ads fell by 4 percent in May and 52 percent for the 12 month period ending in May. The number of IT job ads fell 58 percent over the 12 months. The numbers are taken from Olivier job index

The good news is the decline is is slowing down and part-time and contract positions were up during the month.

via IT jobs slump 5% in May: Olivier – Computerworld.