Lack of skills hampering growth
Like a pressure cooker on a flaming stove the case for paying skilled workers more is building. Years of depressed wages and a growing skills shortage means employers will have to either bite the bullet and pay up; or lower their expectations of growing their business.
The first signs of a technologydriven mis-match between what people can do and what employers need is starting to emerge. An early indication perhaps that robotics, automation, and AI is forcing change.
According to employment firm Hays’ Global Skills Index the talent mismatch is at its highest levels in eight years. Published in collaboration with Oxford Economics, the index shows employers are finding it harder to get the right talent than a year ago. Investment in training may be part of the answer.
Adam Shapley, managing director of Hays in New Zealand says evolving AI technology is playing a part in the talent mis-match.
“This can partially be explained by the rapid growth of technology, which does widen the gap between the skills employers need and those available in the labour market since people aren’t able to upskill fast enough to keep up with the pace of change.
“Another factor is the general mismatch between the skills employers need and the areas people elect to study. For example, if there are 100 digital marketing experts and 250 bankers, but jobs for 250 digital marketing experts and 100 bankers, there’s a mismatch. This points to the need for closer alignment between universities and employers regarding the skills employers need.”
Fiona Kingsford, CEO of industry training organisation Competenz, says automation is changing the nature of work; and the country is short of thousands of mechanical engineers. However, she says automation is not a job killer.
“In fact the opposite is true,” she says. “Automation will create new jobs and opportunities as we head into a more digitised future and will play a big role in the skills future engineers need. The workforce needs to adapt, upskill and re-skill in response.”
Kingsford says New Zealand needs an additional 8000 mechanical engineering apprentices to meet demand over the next five years.
“Apprenticeships are an integral and traditional part of the career pathway. There is an increasing need to continuously upskill — both in response to technical changes as well as business sustainability.”
Shapley agrees saying the talent mismatch is most obvious in high-skill industries and for roles that require highly-skilled professionals, such as technology, engineering, construction and sales.
The problem for employers then is retaining the skilled people they already have; because filling vacancies for high-demand skills is not going to get any easier.
Shapley says employers need to step up now.
“They can provide staff with ongoing learning and development opportunities and more challenging work,” he says. “This is a win-win because professionals want to upskill and are more likely to remain with — and value — an employer who allows their skills to advance.
“It’s also a strategy employers can use to help overcome current or predicted skill gaps in their team since they can offer training and development in areas that are currently experiencing skill shortages.
“Employers can also look at the flexible work practices they offer their staff and ensure they put solid career progression pathways in place.”
Shapely says recent changes to immigration policy; such as with the minimum salary requirements of the Parent Resident Visa, will help retain skilled migrants.
“It should help with the retention of highly-skilled professionals from abroad,” he says.
“There are a number of changes under way at present around temporary work visas.
“New Zealand is seeing extreme skill shortages in many regions and sectors and the changes are in many ways aiming at enabling highly-skilled and in-demand skills to come to New Zealand and help overcome domestic skill shortages.
“It remains to be seen if the changes to the Talent Accredited visa (in removing the pathway to Permanent Residency) will prove a beneficial move in the long term in alleviating skills shortages.”
And for those wanting a pay rise to stay put?
“I think highly-skilled professionals are aware of the demand for their skills and are prioritising a pay rise, but employers are keeping their salary increase budgets firmly in check — despite well-documented skill shortages,” says Shapley.