NZ’s skill shortage may be broader than we realise

A recent survey to understand what roles have been most affected by the shortage of skilled workers has thrown up a surprising result. By Cathy Hendry.

The shortage of skilled workers and the great resignation has become a widely reported and debated topic in New Zealand over the last 12 months.

 New Zealand has traditionally relied on global labour supply to fill technical and specialist roles and with the closed borders it is unsurprising that we have experienced significant talent shortages.

Strategic Pay has run several pulse surveys to understand which roles have been most affected and our latest survey completed in January showed a surprising result.

In our previous surveys completed in August and November last year, we found that organisations were experiencing skill shortages across a wide range of positions and industries.

When we looked at the most difficult to fill job functions, the results were unsurprising, with ICT, health, engineering, trades and human resources featuring.

These are the functions which New Zealand will often fill with a global labour supply. However, the unexpected function reported in our January survey was administration and support. Both the private and not for profit sector reported this function in their top three most difficult to recruit.

Administration and support roles are traditionally positions that are easy to recruit for. There is typically a good number of candidates available, and skills are transferrable. So why then are we seeing these roles featuring in the top three most difficult functions to recruit?

The December 2021 quarter showed record low unemployment again, figures not seen since December 2007, under-utilisation rates are also low.

At these low rates, we would expect all roles to be difficult to recruit for. While the opening of the borders can help ease some of the higher skilled positions, the minimum hourly rate of $40.50 per hour will likely mean organisations looking for admin and support roles will be restricted to our local workforce.

One other interesting impact of the pandemic is an increase in employees leaving the workforce. A global study by Deloitte in 2021 found that with school and day-care closures women have been pushed out of the workforce and into gendered carer roles, with 23 percent of the women surveyed considering leaving the workforce.

We know that traditionally administration and support roles are female dominated, it is possible workforce participation is also having an impact on skill shortages.

Finally, the high inflation and wage pressure is likely also impacting these roles. Many of the pulse survey participants noted that salary expectations of potential candidates were over and above what they were willing to offer.

It is important to recognise the impact of significant year-on-year minimum wage increases on lower-level roles. Salary market movement figures are typically aggregated to show overall market movement. In reality, the remuneration market does not move uniformly and because of minimum wage increases, roles at the lower end of the market have moved at a higher rate than other roles.

Therefore, it is possible that organisations which haven’t been regularly benchmarking against the market have fallen out of step of actual increases at this level.

With no easy quick fixes to this issue, it is clear that staff shortages, wage pressure and retention are going to be high on managers lists of concerns for some time. 

Cathy Hendry is the managing director at Strategic Pay.

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