Battle for talent sees wages soar
Staff can ‘name their price’ in tight market
The battle for talent in the tight job market is seeing employers paying up to 33 per cent more in the hunt for new staff. According to job seeker website Seek, manufacturing, logistics and transport had the highest salary growths of 27 to 33 per cent in one year.
Across New Zealand, the largest annual salary increases were agriculture, fishing and forestry and construction and roading, which both had an 8 per cent increase in salaries, while automotive, trades and services and property saw salaries rise by 7 per cent.
Data from Seek reveals even larger shifts in salaries for some roles. Comparing salary growth between November 2019 and February 2020 with the corresponding period the following year, it found salaries for some manufacturing roles, such as production, increased by 33 per cent over the period.
Trade Me figures show the jobs market hit an all-time high number of vacancies with 81,984 vacancies listed on Trade Me Jobs for the quarter ending March 31, 2022.
In Bay of Plenty, identified as one of the regions with record-breaking listings along with Hawke’s Bay, Marlborough, Northland, Otago, Southland and Waikato, recruitment agents say employers are paying higher hourly rates to retain staff because vacant positions are so difficult to fill.
Northland saw a 34 per cent increase, followed by the West Coast and Marlborough on 29 per cent. Wellington and Auckland however saw small percentage increases in listings of 6 and 7 per cent respectively.
A recent survey by Beyond Recruitment, the country’s largest NZowned agency, found staff rewards, bonuses and perks were now critical to retaining talent.
In the survey, about 66 per cent of NZ businesses say it’s now harder to retain talent than last year and 55 per cent of businesses have noticed a rise in employees changing jobs.
“There is a clear talent shortage in New Zealand,” said Beyond Recruitment chief executive Liza Viz.
“The borders opening won’t help all businesses — Kiwis will see the border opening as an opportune time to move overseas for work and go on a delayed OE.”
Viz said the talent shortage created a dynamic where if a worker didn’t enjoy the job or career, they could easily find work somewhere else. “With the right skill set, you can even change careers to something you believe is more meaningful.”
For the March quarter, the official unemployment rate was steady at 3.2 per cent but wage growth soared.
Annual wage inflation measured by the labour cost index (LCI) rose to 3 per cent in the March 2022 quarter, up from 2.6 per cent in the December 2021 quarter, according to Stats NZ figures.
In the year to the March 2022 quarter, average ordinary time hourly earnings increased to $36.18 — up 4.8 per cent. Average weekly earnings for full-time equivalent employees in the March 2022 quarter also increased on an annual basis — up 5.7 per cent to $1406.12.
Kristen Bangs, of Top Staff Solutions, said the chronic labour shortage could even open up new opportunities for people with criminal records or past issues with drug addiction to enter the workforce.
Bangs, who has 100 vacancies on her books in Rotorua and Tauranga, is supporting candidates to become drug-free and overcome barriers to get work-ready.
“If people are honest and truthful we can help them. If you have been rejected before it is easy to get in that rut and give up. I just want to encourage people to keep on going.”
Bangs said finding workers to fill positions was difficult as demand in the labour market soared.
“We have had some movement in the last few weeks with candidates but we are not getting the high volumes. In the past we could get up to 50 applicants, now we are getting two.”
She said 60 per cent of the jobs on their books were in sawmills while other roles were in construction, logistics, manufacturing and painting.
“It's the worst I have seen it (the worker shortage) for entry-level positions. One employer said to me last week that staff could name their price and they would pay $24 to $25 an hour as a minimum.”
Personnel Resources/Temp Resources Rotorua manager Angelique Scott said experienced staff getting not much more than the minimum wage were seeking more money.
“We are finding the people who are paid anywhere from $22 to $24 are really the people who will be looking for an increase. You will have a junior coming in on the minimum wage earning as much as someone who has years of experience.”
She said employers were training, promoting from within and paying higher hourly rates to retain staff.
Human Resources and administration roles were popular while accounting and finance roles were the hardest to fill.
Most clients required a clear Ministry of Justice check and a lot of sites required a clear drug test.
Ryan and Alexander Recruitment
There is a clear talent shortage in New Zealand.
Liza Viz, Beyond Recruitment chief executive
Agency director Kiri Burney said job seekers could have multiple offers and were considering salary, benefits and future opportunities within each option.
Business support roles were still attracting a solid amount of applications and part-time roles were highly sought after.
However, technical roles like engineers, planners, surveyors and chartered accountants were difficult to find.
Burney said in terms of a criminal record some employers were willing to consider individuals, depending on the nature of the offence. Employers it dealt with also had drug policies for health and safety reasons.
Drake NZ marketing manager Alexandra Tidy said an increasing amount of candidates wanted to know the selling points of a job before they applied.
“Some of these could be salary, security, stability, flexibility, job location and career development.”
Factory and warehouse roles were paying more than minimum wage while fork hoist operators, warehouse assistants, production assistants and skilled technical roles such as service technicians had pay increases.
There was an increased demand in manufacturing and construction,
There will be a large number of Kiwis finally packing up and heading overseas after putting their OE on hold . . . Matt Tolich, Trade Me Jobs
warehousing, distribution, logistics and healthcare.
Trade Me Jobs sales director Matt Tolich said open borders would see a number of sectors, particularly hospitality and tourism, pick up.
“This will shake up the talent-short jobs market. On the flip side, there will be a large number of Kiwis finally packing up and heading overseas after putting their OE on hold for the past couple of years.
“Attracting and retaining talent will be essential for businesses looking to make the most of the inevitable influx of holidaymakers entering the country.”
Seek country manager NZ Rob Clark said the market was incredibly tight and job ads were at record levels. Job ads were higher than they were pre-pandemic for a full year.
“What is interesting is many of the roles that saw the largest growth in salaries were the essential workers — production assistants, grocery workers and healthcare — that kept businesses ticking over. These roles were and continue to be vital and evergreen.
“The rise in salaries is likely to be a reflection of businesses needing to retain and attract them in the tight job market.”
Across the Tasman, Drake Australia chief executive Christopher Quizeman said New Zealand was a hunting ground for talent. The higher the value of an industry reliant upon labour, the more extreme the salary creep. “Currently, in some sectors, we are seeing salaries increasing by 10 per cent to 30 per cent.
“Additional incentives in a market plagued by labour shortages include ‘sign-on bonuses’, the amounts can vary from a lump sum of tens of thousands of dollars to a large percentage of the first year’s salary package.
“Whilst cash was important, for some, flexibility is more valued and we have found that flexibility and the option of working from home to be an attractive inducement for some workers.”
Earlier this month, StatsNZ warned the highest wage growth since 2009 was no win for workers. “Wage increases have typically exceeded consumer price increases over the past 10 years,” said StatsNZ business prices delivery manager Bryan Downes.
— Additional reporting, Lincoln Tan