Almost nine in ten organisations (88%) in New Zealand are now experiencing a skills shortage, according to the latest Hays Salary Guide.

The staffing firm’s research also found 76% of New Zealand employers believe the skills shortage will impact the effective operation or growth plans of their organisation. 

Hays’ Salary Guide is based on a survey of 1,904 organisations and 2,048 professionals in New Zealand.

The employers say the impact will be greatest on productivity (66%), increased workloads for existing staff (also 66%), project delivery (59%), growth and or expansion plans (48%), employee engagement and morale (47%), revenue and profit (45%), the ability to take advantage of new opportunities (44%), employee turnover (43%) and customer service (41%).

At the same time, 38% of employers say the impact of skills shortages has intensified in the past 12 months. The key drivers of the skills shortage, according to employers, are a lack of people with the necessary qualification/s or experience (80%) and increased competition from other employers (64%).  

Managing director of Hays in New Zealand David Trollope said, “New Zealand’s skills shortage narrative is well entrenched in our labour market, but this year our survey shows its impact continues to intensify in many industries.”

Trollope said, “There’s growing concern among employers about the lack of skilled professionals in today’s labour market. Despite these challenges, vacancy activity remains remarkably resilient. After normalising from last year’s historic peak, today’s headcount expansion plans suggest current economic uncertainty will not impact all workforces.”

“It’s clear we’re heading for a skills recession as a shrinking talent pipeline threatens the effective operations and growth plans of organisations,” Trollope added. “With the skills shortage predicted to last well into the 2030s, employers must guard against the long-term impact.”

Further research from the Salary Guide showed that over three quarters of employers have offered higher salaries than planned to attract skilled candidates. In addition, 62% are upskilling staff to help overcome skills gaps, while 44% are considering employing or sponsoring overseas candidates, up from last year’s 7%.

According to Hays, Diversity, Equity and Inclusion initiatives, streamlining the recruitment process and improving employer branding are other strategies employers have adopted.

“While investing in their own strategies is crucial to remain competitive, employers must take a wider view and work together to address the skills shortage crisis,” said Trollope said. “The issue of skills shortages isn’t specific to one organisation or industry but is a systemic problem impacting the entire labour market. We must shift mindsets and collaborate to address skills shortages collectively.”