Crackerjacks New Zealand's Skills Shortage Issues


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A report investigating the skills shortages impacting on New Zealand and possible measures
that can be taken to overt the negative impacts of this.

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Crackerjacks New Zealand's Skills Shortage Issues

  1. 1. New Zealand's skills shortage issues Bringing professional contractors and businesses together
  2. 2. 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 1 of 10
  3. 3. 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 2 of 10
  4. 4. New Zealand’s current skills shortages New Zealand is currently experiencing a number of ‘skills shortages’; before discussing these further it is important Fewer than half the vacancies for registered nurses and to understand exactly what this term means. According principal nurses were filled in 2007 indicating a severe to the Department of Labour (DOL) a skills shortage is “A shortage in these occupations; however, skills shortages situation where there is a genuine shortage in the for psychiatric nurses improved markedly. accessible external labour market of the type of skill being sought, and which leads to difficulty in recruitment.” Teaching professionals such as early childhood, secondary and tertiary positions were on the margin of a The major occupational groups listed below recorded moderate and a severe shortage, however, there was no severe shortages of talented professionals in recent shortage of primary school teachers; nearly nine out of years. every ten vacancies were filled within ten weeks of the position being advertised. There was no shortage of Legislators, Managers and teacher aides - almost nine out of every ten positions were filled within ten weeks of the position being Administrators advertised. Corporate managers were on the margin of a moderate Meanwhile psychologists and auditors were in extreme to severe shortage. Within this group, vacancies for shortage, and employers had severe difficulty finding restaurant or tavern managers, catering service suitable accountants, financial advisers and policy managers and construction managers were particularly analysts.4 hard to fill. In 2006-2007, employers found it harder to fill administration management positions, but easier to find Technicians and Associate Professionals sales and/or marketing managers and IT managers. The overall vacancy fill rates for technicians and Professionals associate professionals showed a severe shortage in these occupations in 2007. Employers seeking quantity There was a shortage in most professional occupations surveyors, draughting technicians and mechanical in 2007. Structural engineers, mechanical engineers and engineering technicians filled only about 40% of their civil engineers were in extreme shortage in 2007, and vacancies, although the fill rate for quantity surveyors with just 40% of vacancies filled within ten weeks of the increased a little from 2006. position being advertised, architects were on the margin of a severe shortage. Skills shortages for computer application engineers eased considerably compared to 4 2006, but employers found it difficult to find systems Department of Labour. (2007). SERA 2007, skill shortages: occupations in shortage in New Zealand. managers, and resource management planners. New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 3 of 10
  5. 5. New Zealand’s current skills shortages Clerks most marked decrease in fill rate from 79% in 2006 to just 40% in 2007. Fitter welders, sheet metal workers, The vacancy fill rate for clerical positions decreased 18% heating ventilation and refrigeration mechanics and from 2006 to 2007, indicating a severe shortage in this electrical fitters were all in extreme shortage. area. Office clerk vacancy figures showed a moderate to severe shortage, but employers had extreme difficulty However, after suffering an extreme shortage in 2005, finding transport clerks, and despatch and receiving employers found it considerably easier to fill vacancies clerks. Information clerk and receptionist positions were for bakers. Other occupations were not so easily filled; also difficult to fill; the vacancy fill rate dropped 42% for the vacancy fill rate for butchers fell 29% from 2006 to these occupations from 2006 to 2007. Meanwhile, 2007, and only one-quarter of cabinet maker vacancies personal and protective service workers were in severe were filled, a marked decrease on 2006 when half were shortage; just over half of vacancies were filled within ten filled. 5 weeks of being advertised. Caregivers and security officers were also in severe shortage. Accountants Trades workers The demand for accounting professionals is influenced by the number of enterprises in the economy, economic Of the listed occupational groups, trades workers growth and the financial regulatory environment. Even suffered the lowest vacancy fill rate overall. All 21 trades- though we are currently operating in a financial down- related occupations surveyed were in shortage and more turn, there is still a shortage of experienced Accountants. than half were in extreme shortage. Building trades From 2002 – 2007 the strong economy and changes to workers were in extreme shortage overall, while accounting regulation largely impacted on the demand carpenters and joiners, painters and decorators were on for accountants’ services. In 2007, all businesses which the margin between severe and extreme shortage. had not already adopted the NZ IFRS were required to Employers found it markedly more difficult to fill jobs for do so. The inception of these new accounting standards bricklayers, plumbers and electricians in 2007 than the lead to the increased scrutiny of company finances and previous year; vacancy fill rates for these occupations significantly enlarged the demand for accountants. had decreased 20%. A shortage in the boatbuilding Looking at today, despite the growth of accounting industry eased in 2007, however this occupation remains graduates, this increase is not enough to eliminate the on the margin between severe and extreme shortage; current shortfall of accountants. Consequently, the only 42% of vacancies were filled. shortage of accountants persists in the short-term. Skill shortages in the metal and machinery trades appear 5 Department of Labour. (2007). SERA 2007, skill to have worsened since 2006. Fitter turners showed the shortages: occupations in shortage in New Zealand. New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 4 of 10
  6. 6. 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 5 of 10
  7. 7. Effect of the skills shortage on the economy It’s no surprise that New Zealand's economy and build and maintain its Next Generation Network. slumped in 2008; high interest rates, a strong The Telecommunications Users Association of New exchange rate, drought conditions, falling house Zealand (TUANZ) has called the skills shortage a prices and rising fuel prices all took their toll on the “key barrier” to its aim of New Zealand becoming nation’s wealth. Gross domestic product fell thanks one of the top ten countries in the Organisation for to a drop in consumer spending and residential Economic Co-operation and Development (OECD) investment. As a result the labour market softened for communications technology. 8 and unemployment rose to a five-year high of 4.6% in the December 2008 quarter. Retail Industry The country’s second largest employer, the retail However, the skills shortage is still a major worry for industry, has also suffered from the skills crunch. business. National accounting firm BDO Spicers’ A 2007 New Zealand Retail Association survey of 26 March (2009) study of 400 small to medium-sized of its largest members showed retailers were enterprises showed the skill shortage rated highly as seriously affected by difficulties in recruiting. All a concern, despite the current economic conditions.7 survey respondents agreed that the shortage had lead to increased stress and decreased production. IT / Telecommunications Industry One business commented specifically that it had In the information and communications technology created “pressure on staff and lost sales (ICT) industry, many chief information officers and opportunities, a lack of focus in store that unsettles ICT managers have been forced to search the team.” Another said, “The business is not internationally for skilled workers, while at home, operating as effectively as it could be and the contact centre managers struggle to fill empty seats. takings reflect this.”9 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, 8 Department of Labour. (2008). Survey of IT Recruiters, 2008: IT Jobs that are hard to fill. 7 9 Department of Labour. (2009). New Zealand Retailers Association. (2008). New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 6 of 10
  8. 8. Forecast for New Zealand’s skills shortages - ICT Sector The current situation Future demand of IT contractors Local demand for ICT professionals has snowballed Demand for ICT professionals is expected to continue since 2001; on average, about 4,000 new ICT jobs were based on occupational employment projections from created each year between June 2001 and June 2006. A other developed countries such as Australia and the 2008 Department of Labour survey found that positions United States. in 36 out of the 50 ICT occupations surveyed were rated by respondents as “difficult” or “very difficult” to fill. The Australian Department of Employment and Workplace Relations (DEWR) in 2005 projected an Recruiters had the most difficulty finding suitable annual 4.5% growth in the professional computing and applicants for Business and Systems Analysts and ICT industry between 2005-2006 and 2010-2011. Programmers, Database and Systems Administrators, Computing and ICT occupations is one of the five Security Specialists, Designers and Network and support occupational groups with the highest employment growth professionals. rate prospects, and the increasing importance of computer applications within businesses, including A frequent comment from recruiters was that often the internet and e-commerce, shows no sign of slowing most challenging part of recruiting ICT workers was demand for these occupations. finding people both with good English language and communication skills. It has been suggested companies The United States Bureau of Labour Statistics (BLS) in invest more in language training to fill skill shortages. 2005 predicted that employment of ICT professionals would increase by 4% a year between 2004 and 2014. The second most common point was that there are not The adoption of increasingly sophisticated technologies, enough skilled ICT professionals to recruit or even to businesses’ integration of these new technologies, and train. Several respondents suggested that this was due the falling prices of computer hardware are some of the to a lack of industry promotion at secondary school level. reasons influencing the predicted strong growth in the Some recruiters noted that short-term contracting, as number of employed ICT professionals.11 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 11 Department of Labour. (2005). Information Technology Professional: Occupational Skill Shortage 10 Assessment. JVMP Report. Department of Labour. (2008). Survey of IT Recruiters, 2008: IT Jobs that are hard to fill. New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 7 of 10
  9. 9. Government-funded initiatives to resolve long term skill shortages Magnet Campaign Many New Zealand employers believe they don’t have this process runs smoothly. The companies who are the resources to recruit offshore, however Immigration involved in this campaign have to adhere to a number of New Zealand's skilled migrant marketing programme, standards as listed below: Magnet, attracts registrations of interest from potential migrants. Over a one year period between 2007/2008, • An up to date list of vacancies must be nearly 20,000 people entered New Zealand under the displayed on their website Skilled Migrant work visa category; however the • There must be correct immigration information Government intends to increase these numbers further posted on their website that will be useful to as an ongoing measure to resolve long term skills potential migrants shortages. • There must be a timely response rate to all migrant enquires in relation to job opportunities The Department of Labour (DOL) and Immigration New • Interviewing of overseas candidates who pass Zealand are conducting the Magnet campaign to attract the screening process and help them settle into skilled migrants to New Zealand who are experienced New Zealand. and qualified with the various occupations listed on the skills shortage list. The success of this initiative is dependent on our business communities’ attitude towards hiring overseas This initiative has been running for over 12 months now candidates. Immigration New Zealand is working closely and Immigration New Zealand / DOL have successfully with selected companies to dispel any negative advertised and attracted registrations of interest from connotations surrounding hiring migrants. These key more than 40,000 potential migrants, all of whom are companies are pivotal to debunking the myths seeking to work and live here. The campaign is surrounding the recruitment of migrants who do not yet progressing well, as 60% of these potential migrants have Work Visas. These ‘pilot’ companies are effectively have skills listed on our long term and short term skills setting an example to other organisations, who in time shortage lists. will need to adopt this recruitment measure to attract needed talent.12 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, 12 Immigration New Zealand. (2008). Skilled Migrant the DOL have set up a number of standards to ensure Marketing Campaign (Fact Sheet). New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 8 of 10
  10. 10. Immediate solutions to fill skills gaps Contracting? of unemployed, and there remain to be skill shortages A skills shortage and an economic downturn can really across the labour market.” The recession has caused the play havoc with your budget. How do you maintain demand for labour to fall, but this has been managed by productivity and relieve workplace stress while keeping increased part-time work rather than a large increase in talent acquisitions costs down? Many New Zealand unemployment, says Ms Dawson. While unemployment businesses are trimming their budgets and putting rose from 4.2% in the September quarter to 4.6% in the pressure on the human resources departments to find December quarter, there is more part-time employment.13 creative ways to source and manage talent with limited financial resources. According to a recent Hudson report investigating Employment and HR Trends issued in April 09, there was HR Professional and past CEO of Sheffield Consulting, a 15.7% increase in employers who were looking to Tony Forsyth, says the past decade has seen an increased increase their contracting / temporary workforce during the recognition of the value of contractors. “Hiring contractors Jan – June (09) period in NZ. This research had 2,285 is a flexible option and does not carry the same risk as respondents on a national level. 14 hiring permanent staff”, Forsyth says. He estimates the local contracting industry is worth about $350 million a year Furthermore, the Human Capital Institute recently released – which is a substantial market. a Report in January 2009 investigating contract talent management. This report investigated the key motivators Contracting appeals to both employers and employees, that drive employers to use contractors. The main point says Employment and Human Relations specialist, Helen raised was that the contracting option provides flexibility to Sedcole. “Employers are keen to have cost-effective ways employers who want to be agile and save costs. It also to manage talent on tap, either for specific projects or for noted that contractors can be used to fill skills gaps. As fixed periods of time. Also, exploring the contracting option quoted in the report, “To succeed today, most opens employers up to a market of skilled professionals organisations depend on their ability to attract the contract who wouldn’t be found through traditional permanent talent they need. To succeed in the future, organisations recruitment.” will need to do so at the right price, in the right numbers and in alignment with corporate objectives.”15 Meanwhile, the country’s labour market is adjusting well to the global recession, according to a February (2009) 13 Department of Labour. (Feb, 2009). A new type of Department of Labour household labour force survey. The downturn. head of labour market information, Monique Dawson says; 14 Hudson Report. (April, 2009). Employment and HR “unlike previous downturns, we entered this one from Trends. record low levels of unemployment, giving the labour 15 Human Capital Institute. (Jan, 09, p.4). The state of market more flexibility. We are not faced with large stocks contract talent management and the role of hr. New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 9 of 10
  11. 11. 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. New Zealand’s skills shortage issues. Crackerjacks NZ ltd © Page 10 of 10
  12. 12. Skilled Migrant Marketing Programme An invitation to participate – free of charge – in Immigration New Zealand’s Skilled Migrant Marketing Programme Here’s how we can help generate qualified candidates for your key vacancies. We are told daily of the stress across all business sectors of In the past 12 months Immigration New Zealand has successfully finding skilled staff. Yet one obvious, and often overlooked advertised and attracted registrations of interest from more than source, is recruiting from overseas. 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 Just under 20,000 people entered New Zealand’s workforce last year term or short term skills shortages lists. under our Skilled Migrant work visa categories. It’s a valuable way Each has completed an extensive registration form, telling us a great for us to grow our workforce as many companies struggle with the deal about their experience, education and so on. ongoing talent shortage. And now we’d like to offer you access to these qualified candidates, free of charge. Of course, many companies do not believe they have the resources Simply contact Kirsty Ryan at the Department of Labour on to recruit talent offshore. Until now. (04) 915 4138 or email Kirsty on She’ll advise you of opportunities to email only those candidates of most We are pleased to tell you about – and invite you to take advantage interest to you, and of upcoming job fairs around the world that you of – our Skilled Migrant Marketing Programme: may choose to participate etc. 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.
  13. 13. 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 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 YOU 1. 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 YOU 1. 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