The 2016 Hays Global Skills Index has been published, highlighting New Zealand’s struggle to keep pace with labour demands.
The report, published in collaboration with Oxford Economics, shows that increased labour market participation is not keeping up with demand while skill shortages are acute for those equipped to work in high-skill industries.
According to Hays, this has primarily been brought about by more job opportunities in highly-skilled industries.
“We may no longer be a ‘rock star’ economy, but a construction industry building significant momentum, most notably in Auckland, and a growing services sector are creating new roles and keeping our job market buoyant,” explains Jason Walker, Managing Director of Hays in New Zealand.
“Yet as these findings show, our labour market participation is already on the high side. Jobs are absorbing the inflow of both migrants and Kiwi’s returning home from Australia, so demand exceeds even this increased candidate supply (as indicated by the ‘labour market participation’ score).
“At the same time, wage pressure in high-skill industries cannot get more acute. This shows that high-skill industries have enormous demand for highly-skilled talent (as indicated by the ‘wage pressure in high-skill industries’ score).
“We’re also seeing a gap starting to emerge between the skills employers need and those in the labour market (as indicated by the ‘talent mismatch’ score).
“Clearly new and creative strategies are required to identify and successfully attract the right candidates, especially in high-skill industries such as engineering, IT, financial services and professional services,” he said.
Meanwhile New Zealand’s increase from 5.1 to 5.2 on the overall Index shows increased pressure in the job market – i.e., it’s slightly harder to secure the right talent than it was a year ago.
The Index is calculated through an analysis of equally weighted indicators. Key indicator scores include:
• 6.8 for ‘labour market participation’. This is a moderately high-pressure score, suggesting that the available workforce isn’t increasing in great enough numbers to meet demand.
• 4.8 for ‘talent mismatch’. This score has slowly risen over the past two years, suggesting that there is a gap emerging between the skills employers need and those in the labour market.
• 10.0 for ‘wage pressure in high-skill industries’ is the highest score possible. This shows that for jobs in high-skill industries, wages are under extreme pressure and sector specific skill shortages (such as in engineering and technology) are acute.
• In positives, the education system is well equipped to meet future talent needs (‘education flexibility’ score of 4.7), our labour market legislation is fairly flexible (‘labour market flexibility’ score of 4.3) and real wages for all jobs are keeping pace with historic trends (‘overall wage pressure’ score of 2.7).
The Hays Global Skills Index is available at hays.net.nz/global-skills-index
For details of the particular skills in short supply, please see our latest Hays Quarterly Report.
For current salary trends, please see our 2016 Hays Salary Guide.