crackerjacks new zealand's skills shortage issues
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A report investigating the skills shortages impacting on New Zealand and possible measuresthat can be taken to overt the negative impacts of this.TRANSCRIPT
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New Zealand's skills shortage issues
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New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
Page 1 of 10
New Zealand's skills shortage issues
Contents
Introduction………………………………………………………………………....................... 2
New Zealand’s current skills shortages………………………………………………………… 3
New Zealand’s long term skills shortages…………………………………………………. 5
Effect of the skills shortage on the economy…………………………………………………. 6
Forecast for New Zealand’s skills shortages – ICT Sector…………..…………………….. 7
Government-funded initiatives to resolve long term skill shortages……………………….. 8
Immediate solutions to fill skills gaps………………………………………………………….. 9
Conclusion……………………………………………………………………………………….. 10
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
Page 2 of 10
Introduction
New Zealand has suffered widespread skill and labour shortages for the past two years. In 2007, only 54% of the advertised
vacancies included in a 2008 Department of Labour report were filled within 10 weeks of advertising. 1 The 2008 labour
market showed no significant easing of the skills shortage. Even though the country’s unemployment rate has risen to a
five-year high of 4.7% in the December 2008 quarter, this was from an historical low in 2007. 2
The New Zealand government has seen the importance of addressing skills shortage issues and has implemented a
number of initiatives to address these problems in the long term. One of these initiatives is the Magnet campaign that is
aimed at attracting skilled migrants to New Zealand who are experienced and qualified with the various occupations listed
on the skills shortage list. The campaign is aimed at marketing New Zealand as a desirable location to live in, as a bid to
attract talented professionals to settle here.
Even though these initiatives resolve long term issues of attracting talent to New Zealand, we are still faced with the
obstacle of finding talent now. For businesses to remain productive it is crucial to have access to professionals and the
skills they bring to an organisation. Particularly at present – as we operate through a severe economic downturn - the need
for skilled professionals is paramount.
As mentioned in a recent report published by the Human Capital Institute (Jan 09), hiring contractors is one way to
overcome skills shortages. “To succeed today, most organisations depend on their ability to attract the contract talent they
need” (HCI, Jan 09, p.4). 3
This report will further investigate the current skills shortages that are impacting on New Zealand and possible measures
that can be taken to overt the negative impacts of this.
1 Department of Labour. (2007). SERA 2007, skill shortages: occupations in shortage in New Zealand.
2 Statistics New Zealand. (Dec, 2008).
3 Human Capital Institute. (Jan, 09). The state of contract talent management and the role of hr.
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
Page 3 of 10
New Zealand’s current skills shortages
New Zealand is currently experiencing a number of ‘skills
shortages’; before discussing these further it is important
to understand exactly what this term means. According
to the Department of Labour (DOL) a skills shortage is “A
situation where there is a genuine shortage in the
accessible external labour market of the type of skill
being sought, and which leads to difficulty in recruitment.”
The major occupational groups listed below recorded
severe shortages of talented professionals in recent
years.
Legislators, Managers and
Administrators
Corporate managers were on the margin of a moderate
to severe shortage. Within this group, vacancies for
restaurant or tavern managers, catering service
managers and construction managers were particularly
hard to fill. In 2006-2007, employers found it harder to fill
administration management positions, but easier to find
sales and/or marketing managers and IT managers.
Professionals
There was a shortage in most professional occupations
in 2007. Structural engineers, mechanical engineers and
civil engineers were in extreme shortage in 2007, and
with just 40% of vacancies filled within ten weeks of the
position being advertised, architects were on the margin
of a severe shortage. Skills shortages for computer
application engineers eased considerably compared to
2006, but employers found it difficult to find systems
managers, and resource management planners.
Fewer than half the vacancies for registered nurses and
principal nurses were filled in 2007 indicating a severe
shortage in these occupations; however, skills shortages
for psychiatric nurses improved markedly.
Teaching professionals such as early childhood,
secondary and tertiary positions were on the margin of a
moderate and a severe shortage, however, there was no
shortage of primary school teachers; nearly nine out of
every ten vacancies were filled within ten weeks of the
position being advertised. There was no shortage of
teacher aides - almost nine out of every ten positions
were filled within ten weeks of the position being
advertised.
Meanwhile psychologists and auditors were in extreme
shortage, and employers had severe difficulty finding
suitable accountants, financial advisers and policy
analysts.4
Technicians and Associate Professionals
The overall vacancy fill rates for technicians and
associate professionals showed a severe shortage in
these occupations in 2007. Employers seeking quantity
surveyors, draughting technicians and mechanical
engineering technicians filled only about 40% of their
vacancies, although the fill rate for quantity surveyors
increased a little from 2006.
4 Department of Labour. (2007). SERA 2007, skill
shortages: occupations in shortage in New Zealand.
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
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New Zealand’s current skills shortages
Clerks
The vacancy fill rate for clerical positions decreased 18%
from 2006 to 2007, indicating a severe shortage in this
area. Office clerk vacancy figures showed a moderate to
severe shortage, but employers had extreme difficulty
finding transport clerks, and despatch and receiving
clerks. Information clerk and receptionist positions were
also difficult to fill; the vacancy fill rate dropped 42% for
these occupations from 2006 to 2007. Meanwhile,
personal and protective service workers were in severe
shortage; just over half of vacancies were filled within ten
weeks of being advertised. Caregivers and security
officers were also in severe shortage.
Trades workers
Of the listed occupational groups, trades workers
suffered the lowest vacancy fill rate overall. All 21 trades-
related occupations surveyed were in shortage and more
than half were in extreme shortage. Building trades
workers were in extreme shortage overall, while
carpenters and joiners, painters and decorators were on
the margin between severe and extreme shortage.
Employers found it markedly more difficult to fill jobs for
bricklayers, plumbers and electricians in 2007 than the
previous year; vacancy fill rates for these occupations
had decreased 20%. A shortage in the boatbuilding
industry eased in 2007, however this occupation remains
on the margin between severe and extreme shortage;
only 42% of vacancies were filled.
Skill shortages in the metal and machinery trades appear
to have worsened since 2006. Fitter turners showed the
most marked decrease in fill rate from 79% in 2006 to
just 40% in 2007. Fitter welders, sheet metal workers,
heating ventilation and refrigeration mechanics and
electrical fitters were all in extreme shortage.
However, after suffering an extreme shortage in 2005,
employers found it considerably easier to fill vacancies
for bakers. Other occupations were not so easily filled;
the vacancy fill rate for butchers fell 29% from 2006 to
2007, and only one-quarter of cabinet maker vacancies
were filled, a marked decrease on 2006 when half were
filled. 5
Accountants
The demand for accounting professionals is influenced
by the number of enterprises in the economy, economic
growth and the financial regulatory environment. Even
though we are currently operating in a financial down-
turn, there is still a shortage of experienced Accountants.
From 2002 – 2007 the strong economy and changes to
accounting regulation largely impacted on the demand
for accountants’ services. In 2007, all businesses which
had not already adopted the NZ IFRS were required to
do so. The inception of these new accounting standards
lead to the increased scrutiny of company finances and
significantly enlarged the demand for accountants.
Looking at today, despite the growth of accounting
graduates, this increase is not enough to eliminate the
current shortfall of accountants. Consequently, the
shortage of accountants persists in the short-term.
5 Department of Labour. (2007). SERA 2007, skill
shortages: occupations in shortage in New Zealand.
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
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New Zealand’s long term skills shortages
A recent research report conducted for the Equal Employment Opportunities trust (2009) indicates there is a need
for employers to be more open minded to hiring staff to cope with major skills shortages. As referenced in this
report the major Long-term skills shortages New Zealand faces are listed below:6
• Auditors
• Construction Project Managers
• ECE, Secondary and Tertiary Educators
• Engineers, Professionals and Technicians
• Environmental Researches
• Food Technologists
• Health; Anaesthetists, various specialist Doctors, Surgeons, Dieticians, Medical Scientists, Nurses,
Midwives, Occupational Therapists, Pharmacists, Physiotherapists
• ICT Professionals
• Multimedia Designers
• Project Managers
• Social Workers
• Surveyors
• Trades; Electricians, Mechanics, Fitters, Carpenters / Builders, Joiners, Boat Builders, Cabinet Makers,
Plumbers, Chefs
• Urban and Regional Planners
• Various Farmers
• Veterinarians
6 Source: EEO Trust, Dr Mervyl McPerson. (2009).
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
Page 6 of 10
Effect of the skills shortage on the economy
It’s no surprise that New Zealand's economy
slumped in 2008; high interest rates, a strong
exchange rate, drought conditions, falling house
prices and rising fuel prices all took their toll on the
nation’s wealth. Gross domestic product fell thanks
to a drop in consumer spending and residential
investment. As a result the labour market softened
and unemployment rose to a five-year high of 4.6%
in the December 2008 quarter.
However, the skills shortage is still a major worry for
business. National accounting firm BDO Spicers’
March (2009) study of 400 small to medium-sized
enterprises showed the skill shortage rated highly as
a concern, despite the current economic conditions.7
IT / Telecommunications Industry
In the information and communications technology
(ICT) industry, many chief information officers and
ICT managers have been forced to search
internationally for skilled workers, while at home,
contact centre managers struggle to fill empty seats.
The competitive marketplace has seen some top-
level salaries rise even higher. Businesses looking
for good staff are competing not only with the
government, but the telcos as well. Telecom, for
example, needs ICT workers to implement
regulatory changes such as operational separation,
7 Department of Labour. (2009).
and build and maintain its Next Generation Network.
The Telecommunications Users Association of New
Zealand (TUANZ) has called the skills shortage a
“key barrier” to its aim of New Zealand becoming
one of the top ten countries in the Organisation for
Economic Co-operation and Development (OECD)
for communications technology. 8
Retail Industry
The country’s second largest employer, the retail
industry, has also suffered from the skills crunch.
A 2007 New Zealand Retail Association survey of 26
of its largest members showed retailers were
seriously affected by difficulties in recruiting. All
survey respondents agreed that the shortage had
lead to increased stress and decreased production.
One business commented specifically that it had
created “pressure on staff and lost sales
opportunities, a lack of focus in store that unsettles
the team.” Another said, “The business is not
operating as effectively as it could be and the
takings reflect this.”9
8 Department of Labour. (2008). Survey of IT Recruiters,
2008: IT Jobs that are hard to fill.
9 New Zealand Retailers Association. (2008).
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
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Forecast for New Zealand’s skills shortages - ICT Sector
The current situation
Local demand for ICT professionals has snowballed
since 2001; on average, about 4,000 new ICT jobs were
created each year between June 2001 and June 2006. A
2008 Department of Labour survey found that positions
in 36 out of the 50 ICT occupations surveyed were rated
by respondents as “difficult” or “very difficult” to fill.
Recruiters had the most difficulty finding suitable
applicants for Business and Systems Analysts and
Programmers, Database and Systems Administrators,
Security Specialists, Designers and Network and support
professionals.
A frequent comment from recruiters was that often the
most challenging part of recruiting ICT workers was
finding people both with good English language and
communication skills. It has been suggested companies
invest more in language training to fill skill shortages.
The second most common point was that there are not
enough skilled ICT professionals to recruit or even to
train. Several respondents suggested that this was due
to a lack of industry promotion at secondary school level.
Some recruiters noted that short-term contracting, as
opposed to long term employment, had increased in
popularity amongst ICT professionals – so hiring
contractors could be one tactic to fill skills gaps in the
short-term. 10
10 Department of Labour. (2008). Survey of IT
Recruiters, 2008: IT Jobs that are hard to fill.
Future demand of IT contractors
Demand for ICT professionals is expected to continue
based on occupational employment projections from
other developed countries such as Australia and the
United States.
The Australian Department of Employment and
Workplace Relations (DEWR) in 2005 projected an
annual 4.5% growth in the professional computing and
ICT industry between 2005-2006 and 2010-2011.
Computing and ICT occupations is one of the five
occupational groups with the highest employment growth
rate prospects, and the increasing importance of
computer applications within businesses, including
internet and e-commerce, shows no sign of slowing
demand for these occupations.
The United States Bureau of Labour Statistics (BLS) in
2005 predicted that employment of ICT professionals
would increase by 4% a year between 2004 and 2014.
The adoption of increasingly sophisticated technologies,
businesses’ integration of these new technologies, and
the falling prices of computer hardware are some of the
reasons influencing the predicted strong growth in the
number of employed ICT professionals.11
11 Department of Labour. (2005). Information
Technology Professional: Occupational Skill Shortage
Assessment. JVMP Report.
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
Page 8 of 10
Government-funded initiatives to resolve long term skill shortages
Magnet Campaign
Many New Zealand employers believe they don’t have
the resources to recruit offshore, however Immigration
New Zealand's skilled migrant marketing programme,
Magnet, attracts registrations of interest from potential
migrants. Over a one year period between 2007/2008,
nearly 20,000 people entered New Zealand under the
Skilled Migrant work visa category; however the
Government intends to increase these numbers further
as an ongoing measure to resolve long term skills
shortages.
The Department of Labour (DOL) and Immigration New
Zealand are conducting the Magnet campaign to attract
skilled migrants to New Zealand who are experienced
and qualified with the various occupations listed on the
skills shortage list.
This initiative has been running for over 12 months now
and Immigration New Zealand / DOL have successfully
advertised and attracted registrations of interest from
more than 40,000 potential migrants, all of whom are
seeking to work and live here. The campaign is
progressing well, as 60% of these potential migrants
have skills listed on our long term and short term skills
shortage lists.
The DOL have also been working with New Zealand
businesses to ensure these migrants can find jobs before
re-locating. To ensure that these overseas skilled
candidates can be utilized in New Zealand businesses,
the DOL have set up a number of standards to ensure
this process runs smoothly. The companies who are
involved in this campaign have to adhere to a number of
standards as listed below:
• An up to date list of vacancies must be
displayed on their website
• There must be correct immigration information
posted on their website that will be useful to
potential migrants
• There must be a timely response rate to all
migrant enquires in relation to job opportunities
• Interviewing of overseas candidates who pass
the screening process and help them settle into
New Zealand.
The success of this initiative is dependent on our
business communities’ attitude towards hiring overseas
candidates. Immigration New Zealand is working closely
with selected companies to dispel any negative
connotations surrounding hiring migrants. These key
companies are pivotal to debunking the myths
surrounding the recruitment of migrants who do not yet
have Work Visas. These ‘pilot’ companies are effectively
setting an example to other organisations, who in time
will need to adopt this recruitment measure to attract
needed talent.12
12 Immigration New Zealand. (2008). Skilled Migrant
Marketing Campaign (Fact Sheet).
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
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Immediate solutions to fill skills gaps
Contracting?
A skills shortage and an economic downturn can really
play havoc with your budget. How do you maintain
productivity and relieve workplace stress while keeping
talent acquisitions costs down? Many New Zealand
businesses are trimming their budgets and putting
pressure on the human resources departments to find
creative ways to source and manage talent with limited
financial resources.
HR Professional and past CEO of Sheffield Consulting,
Tony Forsyth, says the past decade has seen an increased
recognition of the value of contractors. “Hiring contractors
is a flexible option and does not carry the same risk as
hiring permanent staff”, Forsyth says. He estimates the
local contracting industry is worth about $350 million a year
– which is a substantial market.
Contracting appeals to both employers and employees,
says Employment and Human Relations specialist, Helen
Sedcole. “Employers are keen to have cost-effective ways
to manage talent on tap, either for specific projects or for
fixed periods of time. Also, exploring the contracting option
opens employers up to a market of skilled professionals
who wouldn’t be found through traditional permanent
recruitment.”
Meanwhile, the country’s labour market is adjusting well to
the global recession, according to a February (2009)
Department of Labour household labour force survey. The
head of labour market information, Monique Dawson says;
“unlike previous downturns, we entered this one from
record low levels of unemployment, giving the labour
market more flexibility. We are not faced with large stocks
of unemployed, and there remain to be skill shortages
across the labour market.” The recession has caused the
demand for labour to fall, but this has been managed by
increased part-time work rather than a large increase in
unemployment, says Ms Dawson. While unemployment
rose from 4.2% in the September quarter to 4.6% in the
December quarter, there is more part-time employment.13
According to a recent Hudson report investigating
Employment and HR Trends issued in April 09, there was
a 15.7% increase in employers who were looking to
increase their contracting / temporary workforce during the
Jan – June (09) period in NZ. This research had 2,285
respondents on a national level. 14
Furthermore, the Human Capital Institute recently released
a Report in January 2009 investigating contract talent
management. This report investigated the key motivators
that drive employers to use contractors. The main point
raised was that the contracting option provides flexibility to
employers who want to be agile and save costs. It also
noted that contractors can be used to fill skills gaps. As
quoted in the report, “To succeed today, most
organisations depend on their ability to attract the contract
talent they need. To succeed in the future, organisations
will need to do so at the right price, in the right numbers
and in alignment with corporate objectives.”15
13 Department of Labour. (Feb, 2009). A new type of
downturn.
14 Hudson Report. (April, 2009). Employment and HR
Trends.
15 Human Capital Institute. (Jan, 09, p.4). The state of
contract talent management and the role of hr.
New Zealand’s skills shortage issues. Crackerjacks NZ ltd ©
Page 10 of 10
Conclusion
The skills shortages that have been affecting New Zealand have a flow on to the economic environment – it is critically
important this is addressed. For companies to remain productive, especially in this current market, they need the human
resources to do so. With a number of professions being affected by skills shortages, for example the ICT sector, it is
important for companies to have plans to combat skills shortages. Between the New Zealand Governments initiatives of
recruiting skilled migrants and short-term measures - such as investigating the prospect of utilising part-time workers and
contractors – companies can start to decrease the impact of the nation’s skills shortages.
Recommendations
Short-term skill shortages:
Organisations looking at ways to attract talent can implement some short-term strategies to achieve this. As highlighted in
this report, the following measures have proven successful when attracting hard-to-find professionals:
• Using professional contractors to fill short-term skills gaps.
• Offer part-time/flexible employment as a means to attract hard-to-find professionals.
Long-term skill shortages:
The DOL have a number of strategies in place to counteract the impacts of long-term skills shortages in New Zealand. By
developing a working relationship with the DOL and supporting their various initiatives, such as the Magnet campaign
outlined above, organisations can be positioned as an ‘employer of choice’ when considered by skilled migrants. Creating a
platform to streamline skilled migrants into New Zealand organisations is crucial to addressing our on-going skills shortages
in the future. Please see the following page for more information how your organisation can attract talent into the future.
We are told daily of the stress across all business sectors of
finding skilled staff. Yet one obvious, and often overlooked
source, is recruiting from overseas.
Just under 20,000 people entered New Zealand’s workforce last year
under our Skilled Migrant work visa categories. It’s a valuable way
for us to grow our workforce as many companies struggle with the
ongoing talent shortage.
Of course, many companies do not believe they have the resources
to recruit talent offshore. Until now.
We are pleased to tell you about – and invite you to take advantage
of – our Skilled Migrant Marketing Programme:
In the past 12 months Immigration New Zealand has successfully
advertised and attracted registrations of interest from more than
40,000 potential migrants, all of whom are seeking to work and
live here. And more than 60% of whom are on either our long
term or short term skills shortages lists.
Each has completed an extensive registration form, telling us a great
deal about their experience, education and so on.
And now we’d like to offer you access
to these qualified candidates, free of charge.
Simply contact Kirsty Ryan at the Department of Labour on
(04) 915 4138 or email Kirsty on [email protected]. She’ll
advise you of opportunities to email only those candidates of most
interest to you, and of upcoming job fairs around the world that you
may choose to participate etc.
Here’s how we can help generate qualified candidates for your key vacancies.
A quick snapshot of our 40,000 Skilled Migrant Candidates
• Average Age 36
• Education 13,704 have a tertiary degree
• Vocational Experience:
- On the long term or short term skills list 26,218
- Have an ICT background 4,080
- Have an engineering background 4,545
- Have specified skills such as:
• Plumbing 382
• Roofing 46
• Accounting/finance 2,085
• Nurses 1,504
More than 300 job titles are registered on our database.
An invitation to participate – free of charge – in Immigration New Zealand’s
Skilled Migrant Marketing Programme
Skilled MigrantMarketing Programme
How to make your company look attractive to migrants
Start with your website:
a. List up-to-date vacancies and details. If we send out an email on your behalf, it will send interested candidates to your website.
b. Ensure you have the correct immigration information. YES, you can offer employment to overseas candidates. That does not
guarantee, of course, that a work visa will be offered as each application to Immigration NZ is judged on its own merits. However,
if your role is one within the long or short term skills shortages lists, or you are an accredited employer, or the candidate falls within
any number of acceptable categories, the chances will be good that a work visa will be issued.
The Skilled Migrant Marketing Programme:A Mutually Beneficial Partnership
Immigration NZ YOU1. Advertises to find qualified/interested candidates 1. Update your website
2. Hosts trade fairs around the world 2. Ensure the language regarding hiring of overseas candidates is correct
– this applies to all written collateral, as well as what your team communicates
Immigration NZ YOU1. Offers you access to our 40,000 candidates 1. Respond
2. We will help work with you on work visas etc 2. Interview (It’s easy – even remotely!)
if necessary 3. If you offer a job, and are accepted, help candidates settle into New Zealand
What’s required of you:
• Contact us – unless we hear from you,
we cannot help!
• Help us debunk the myths – yes, you can,
for instance, offer a job to a migrant
without them first having a work visa!
• Treat any potential migrants you choose
to interview with respect – their
impressions of you will form their
impressions of New Zealand!
- Respond to the questions quickly –
within days, not weeks
- Inform them of the outcome of your
search efforts
- If you do make an offer, recognise they
will have lots of questions about your
company, your region, New Zealand
- And if they decide to accept, help them
with their necessary visas and
paperwork (we can help here, too!)
- Offer them and their families help
settling into New Zealand