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Most New Zealand organisations experiencing skill shortages

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76% of employers anticipate labour scarcity to adversely affect operational and growth plans

A significant skills shortage is plaguing nearly 90% of organisations in New Zealand, as revealed by the latest Hays Salary Guide. This research conducted by the staffing firm highlights that 76% of employers in the country anticipate the skills shortage to adversely affect their organisational operations and growth plans.

The Hays Salary Guide is based on an extensive survey involving 1,904 organizations and 2,048 professionals across various sectors in New Zealand. Employers are particularly concerned about the detrimental impact of the skills shortage on productivity (66%), increased workloads for existing staff (66%), project delivery (59%), growth and expansion plans (48%), employee engagement and morale (47%), revenue and profit (45%), the ability to seize new opportunities (44%), employee turnover (43%), and customer service (41%).

Moreover, 38% of employers have reported an intensification of the skills shortage over the past year. According to these employers, the primary drivers of the shortage are the lack of individuals possessing the necessary qualifications or experience (80%) and heightened competition from other employers (64%).

David Trollope, the Managing Director of Hays in New Zealand, emphasised that the impact of New Zealand’s skills shortage continues to escalate across multiple industries. Trollope expressed growing employer concern regarding the scarcity of skilled professionals in today’s labor market. Despite the challenges posed by the shortage, there remains a remarkable resilience in terms of recruitment activity. While headcount expansion plans have normalized since last year’s historic peak, they indicate that the current economic uncertainty will not adversely affect all workforces.

Trollope cautioned that the country is heading toward a skills recession, as the dwindling talent pool increasingly threatens the effective functioning and growth aspirations of organizations. He emphasized that the skills shortage is predicted to persist well into the 2030s, and employers must take proactive measures to mitigate its long-term impact.

Further findings from the Salary Guide indicate that over 75% of employers have offered higher salaries than initially planned in order to attract skilled candidates. Additionally, 62% of employers are focusing on upskilling their existing staff to bridge skills gaps, while 44% are considering the recruitment or sponsorship of overseas candidates—an increase from last year’s 7%.

Hays suggests that employers have also adopted strategies such as promoting diversity, equity, and inclusion, streamlining the recruitment process, and enhancing employer branding to address the skills shortage. However, Trollope stresses that while individual initiatives are important for maintaining competitiveness, a collective effort is necessary to combat the skills shortage crisis. He asserts that skills shortages are not isolated to specific organizations or industries but represent a systemic issue that affects the entire labor market. Thus, a shift in mindset and collaboration among stakeholders are vital to effectively address the skills shortages.

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