Crackerjacks New Zealand's Skills Shortage Issues

Until now there have been limits

to how you resource your offi ce.

But not any more. Crackerjacks takes

the hassle out of contract recruitment by

providing a talent management tool so

you can source and track professional

contractors online. We’re not a job

board and we’re not just a list of

names and CV’s.

We are contracting solution specialists

We realised there had to be a better way to connect companies and contractors. At Crackerjacks businesses get quick, easy access to a range of great contractors, and contractors have all the tools they need to manage and get great contracts.

Our business has been set up by business people for business people. We know what makes contractors and contracts fi t together and that is the foundation for our site. We developed some unique tools that give added depth to our contractor profi les, and we added some special features that allow you to speed up the searching process. It’s been packaged up nice and simply so hiring the best contractors has never been more straight forward.

Bringing professional contractors and businesses together

New Zealand's skills shortage issues

www.crackerjacks.co.nz

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


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.


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.


Page 4 of 10

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.


Page 5 of 10

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).


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).


Page 7 of 10

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.


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).


Page 9 of 10

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.


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

Crackerjacks New Zealand's Skills Shortage Issues

Documents

Transcript of Crackerjacks New Zealand's Skills Shortage Issues