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New Zealand – Huge lift in recruitment firms in Christchurch but concerns demand will slow

07 October 2015

None of the bigger staff hire companies are admitting yet to any work slowdown yet, saying they have more temporary staff on their books than ever.

One labour hire specialist, Christchurch-based Scott Brittenden, this week combined 12 recruitment branches under one brand, OneStaff, creating a national organisation with a forecasted turnover of NZD 70 million (USD 45.5 million) in the year to March 2016.

Mr Brittenden said that there were half a dozen hire companies in Christchurch in 1997. However, that number had ballooned to more than 150, although many of those firms were smaller, specialist operations.

Unions have warned that a larger labour hire industry means lower pay for workers, especially migrants.

The Ministry of Business, Innovation and Employment's (MBIE) Labour Inspectorate found last year that 70% of an initial batch of 23 companies it audited were in breach of employment laws. None of those companies have been publicly named, and the MBIE says any issues have now been dealt with. 

Stu Lumsden, the southern regional manager of the Labour Inspectorate, said work continued to help treat rebuild workers well. Behaviour among labour hire firms in the Recruitment and Consulting Services Association (RCSA) had improved.

“We keep a very close eye on the labour and hire sector, obviously because they do have a lot of migrant employees whom we consider might be quite vulnerable during the rebuild in Christchurch; to exploitation, not having proper contracts and occasionally [to having] unlawful deductions taken [from wages]", Lumsden said.

The latest area of concern was making sure that employers made new staff aware if they were employed on a permanent or contract basis because that could impact on their conditions.

Ian McPherson, of Christchurch and Auckland-based Enterprise Recruitment and RCSA New Zealand council member, said while some firms were working in specialist areas such as IT or hospitality.  "A number have come to market since the earthquake specialising in that construction space".

The generalist and most specialist firms should continue to do well, but "if you were just focused on the rebuild then I guess there is a sunset (finish) to that", he added.