Skills shortages-not just a New Zealand problem

By Kevin Everett (as advised by Andy King (LIA 200800912) of Network Migration Services in Henderson

With consents now as high as recorded in 2004 and the forecast for further growth, where do we go from here?

We have residential, commercial, civil and infrastructure sectors all at extremely high levels of activity based on demand, with the recent natural disasters adding further pressure.

These issues have been spoken about to death so I won’t go over them again.

However, I am keen to talk about how we deal with the skills required to keep up with the demand and explain why New Zealand businesses need to be more open, more flexible, more proactive and certainly more structured in their HR processes.

Demand is greater than the current resource, and the New Zealand government is putting a spanner in the works for the Auckland market by driving skilled labour out as a direct result of the increase of points needed to gain residency from 140 to 160, and applicants being offered additional points if they move outside of Auckland.

This may be great for those companies outside of Auckland, but with the highest demands being in Auckland, where does that leave us?

The other issue Auckland is facing is affordability of houses. Many are just not able to survive which is placing pressure on employers to increase salaries. This is not sustainable long-term as all it does is drive prices of new builds higher.

As a result of the record-level house prices, people are selling up and moving to locations which offer better lifestyles, be mortgage free and have money in the bank. Why wouldn’t you if you could?

So where do we go from here and how as a business do you attract the much needed skills?

I thought I would look at what skill shortages are like around the world and what other countries are doing. Can we learn from them?

In the USA they are struggling to attract skilled labour as construction is on the increase. It is the same in the UK and Ireland where they forecast a 20 percent increase in construction work in 2017.

The UK and Ireland have been a great source to our market, but with their sectors showing growth and also suffering from a skills shortage, we are facing considerable competition for these people.

In other regions of Europe there is a massive skills shortage and not just in construction. In fact half to two thirds of employers of EU firms are finding it difficult finding skilled workers.

What has been identified in this research which I feel needs to be considered here in New Zealand, is that the shortage is not just about the lack of skills. Unattractive job offers, poor job quality, precarious job contracts, and a lack of employer commitment to talent management are other key factors.

These are the main reasons for EU firms being unable to find skills, while others are genuinely finding it’s a skill shortage based on the increase in the markets.

It is time for New Zealand employers to look at their businesses and whether they are in one of these categories. If you are, then you need to review your policies immediately, as this is not going to help you attract new employees and may leave you exposed to losing staff too, especially if your competitors are offering better conditions.

Training is key. Recent research in 2014 by Cedefop (European Commission, 2014) found that firms that treat their human resources as an intangible asset are more likely to reap substantial benefits from training activities. By contrast, organisations that regard labour as a cost to the firm are likely to enjoy fewer benefits, or even a zero or negative return from their investment in training.

The research also found that the difficulties in recruitment faced by employers could be tackled better if firms adopt an alternative mix of human resource policies.

This strategy should rely on several factors including the offer of better and more stable jobs to skilled applicants and high quality apprentices; investment in strengthening talent from outside and inside the firm; hiring applicants on the basis of their potential; and having a superior design of learning intensive jobs and workplace practices.

Developing a greater reliance on sourcing relatively unexploited talent including female and older workers is another great strategy, which we will discuss in a subsequent column.

Firms who value their employees, invest in them and offer a stable work environment definitely have the edge when it comes to attracting and retaining great people.

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