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New Zealand’s tight labour market and low unemployment are forecast to ease slightly but certain sectors say they are still in severe difficulties.
On Wednesday the government moved to loosen up immigration rules to allow up to 5000 people, particularly those from the Pacific Islands, into the country for temporary work.
The scheme would allow people to make return trips to New Zealand for seven months in a year.
Peter Silcock, Horticulture New Zealand’s chief executive, notes the plan won’t take effect from April next year, and it will have to work harder to promote the jobs at home this season.
But “It’s a step in the right direction”, and also raises the odds of getting trained staff back.
“There’s certainly a lot of money being lost as a result of those labour shortages and essentially because we’re not picking, packing, pruning, harvesting at the optimum time,” he says.
“We estimate in the last year that there’s something like $30 million of losses incurred within the industry because we didn’t have sufficient labour.”
The good news for Mr Silcock, according to economists, is New Zealand’s labour shortage is on an easing cycle.
“Skilled labour has been getting easier since the last quarter of 2004,” Brent Layton, a director of the New Zealand Institute of Economic Research (NZIER), says.
The institute’s latest quarterly survey of business opinion shows that about 21 per cent of firms were having difficulty finding skilled workers in the September quarter, compared with 25 per cent in the June quarter.
Unskilled labour was marginally harder to find in the September quarter, a net 7 per cent compared to minus-4 per cent in June. More than 40 per cent of firms were having difficulty in March 2005.
But as redundancies begin to kick in, the survey shows the number of firms reporting labour as being their most limiting factor is falling.
They dropped from 26 per cent in March 2005 survey to 14 per cent in September.
This is backed by an August government report showing skills shortages have fallen sharply over the past 18 months to the lowest level since 1999.
Sectors that are still concerned about labour have issues with worker availability and price, Mr Layton says.
“There’s no question at all that there has been wage pressure, we have 3.6 per cent unemployment and we have people able to have some selection over jobs for people who previously may not have had too many choices.”
However, recruitment agencies and the tourism sector see no respite from the labour shortage.
“If they can find the candidates and send them up to us, then brilliant,” says Jacqui Barratt, president of the Recruitment and Consulting Services Association in New Zealand.
She says demand for workers is right across the board and more so in some cities than some of the regional areas.
Key shortages from the office sector include accountants, receptionists, customer services, and sales.
“There’s a huge amount of sales opportunities out there but to find good, talented, experienced sales people are very difficult.”
Fiona Luhrs, chief executive of the Tourism Industry Association, says it is too hard to tell just how short of staff her sector will be as the high season approaches.
But “if it’s like any other year, it’s going to be tough”.
Some jobs are harder to fill than others, including bus drivers. She has heard of some companies which “reward” staff if they manage to lure a driver from elsewhere.
Frontline roles in adventure tourism are also plentiful . She says Queenstown operators have “done a smart thing” and arranged a fast track process for people to get visitor or working visas.
Ms Luhrs says tourism’s unsociable hours and often comparatively low pay make it difficult to attract workers, particularly those with a different work ethic .
“We are grappling with Generation Y — which is those born between 1978 and 1994 — and how to attract them and manage them.”
Her problem is not unique to New Zealand.
In Australia, unemployment is at its lowest level in more than 30 years and the tourism industry is approaching the peak summer season without enough workers.
A booming mining industry is luring workers with top wages and Australia’s Tourism Export Council (ATEC) is worried the industry is at risk.
” We’re hearing of tour operators shutting tours not for want of tourists, but want of staff,” ATEC’s managing director Matthew Hingerty said.
The Australian government has moved to help by relaxing working restrictions on backpackers and introducing a scheme to help unemployed people move to regions with labour shortages.
Recently it also launched a package offering older workers who left school early education vouchers, or to take on an apprenticeship without reverting to a beginner’s wage.
For the Australian tourism industry, however, Mr Hingerty believes the only long-term solution is to relax tough restrictions on foreign workers.
Horticulture New Zealand’s Peter Silcock agrees.
“The fact is … the number of school leavers that there are is reducing quite significantly. So the number of people coming into the workforce versus the number of people going out of the workforce is changing quite a bit as well.
“So we do feel we will have shortages for quite some time to come.”
Economists here say the tight labour market and rising wages are lagging behind an already slowing market.
But it is difficult to know whether New Zealanders will jump the country if the economy turns down, thus creating a greater need for more immigrants.
Dr Layton is predicting “a relatively slow easing.
“Do we have a need for more people in than out? I would have thought that New Zealand migration policy is better run on longer term strategies.”
(Posted on October 27, 2006)