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

1. New Zealand's
skills shortage issues
Bringing professional contractors
and businesses together
www.crackerjacks.co.nz

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 ©
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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 ©
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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.
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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 ©
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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 ©
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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).
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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.
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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).
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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.
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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 ©
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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 kirsty.ryan@dol.govt.nz. 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. 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