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New Zealand – ManpowerGroup warns of national skills crisis

03 December 2013

ManpowerGroup has warned that New Zealand is on the brink of a massive skills crisis with demand for some trade roles in the Canterbury region expected to triple in the next 12 months, report scoop.co.nz.

As the Christchurch rebuild finally ramps up, construction work has already absorbed most of the available labour in the Canterbury market. Statistics NZ reported that unemployment in the region was 4.2% in the quarter to September, with male unemployment sitting at 3.8%, which is generally considered full employment.

Matt Love-Smith, General Manager ManpowerGroup New Zealand, has warned employers that a skills shortage is looming. “It is crucial to start planning now for future workforce and talent needs. The rebuild has taken longer than anyone has expected to kick off, but now that it is imminent, many people don’t realise the magnitude of the task ahead and the labour force needed to execute it.”

“In the imminent future, the region’s employment issues will not simply be about the availability of labour, but more about the readiness of that labour to immediately participate in the rebuild. We’re concerned that the majority of the available labour does not hold the right skills to participate in the rebuild.”

“For example, we will start to see a bottle neck of work projects if we are unable to up-skill or attract an increasingly significant number of qualified and work ready trades workers to the region. This is a busy time for Canterbury, with growth in the region being driven by the rebuild already flowing into other industry sectors, however, organisations need the right staff to service growing demand or they will miss out on growth opportunities and risk being left behind,” Mr Love-Smith said.

The construction boom has only just begun and work is expected to pick up across civil, and in particular residential, and commercial projects. The Canterbury Employers' Chamber of Commerce has reported:

  • There are 25,000 houses with an excess of AUD 100,000 (USD 91,277) worth of damage still to be repaired, and 700 are currently under repair or have been repaired so far.
  • 10,000 homes have been destroyed altogether and work on replacement is only in its infancy. 
  • The Christchurch CBD infrastructure repairs are only 20 per cent of the way through.
  • Planning of the commercial or vertical build is still being finalised.

Against this background, Mr Love-Smith said, “At a macro level, there is very little capacity in the market to address more work, yet we predict the construction boom won’t peak for another 18 months.”

“This is already having flow-on effects to other sectors in the New Zealand market, including retail, accommodation and food services. As the pressure continues we can expect to start seeing wage inflation, where employers compete more aggressively for local skilled workers, as well as an increase in the demand for overseas workers,” he said.

According to Mr Love-Smith, the factors are aligning to create a ‘perfect storm’ in an already skills short market.

ManpowerGroup’s latest employment outlook survey showed that 27% of employers in New Zealand expect to grow staffing levels during the fourth quarter, in Christchurch that figure is at 33%.

The greatest demand in the short term is for skilled trade workers, carpenters and joiners, painting workers, concreters, and plasterers. Also in demand are implementation roles, project managers and engineers.

“According to forecasting, the number of carpenters and joiners in Christchurch will need to nearly triple, which also equates to a nearly 40% increase in the national number of carpenters and joiners. For painting trades workers the proportional increase is even larger,” Mr Love-Smith said.

“The concern is that these labour force issues have not been on the radar for most employers. Thinking one week or one month ahead will no longer be enough. There are a range of workforce strategies that must be considered to start building the labour force we will need in the region.

“We need to look at more comprehensive and targeted campaigns to attract workers from overseas, get better at identifying and attracting untapped talent in the New Zealand market and improve collaboration with education institutions to ensure trainees and graduates are work ready.

“We are currently at the tipping point of this skills crisis, and organisations need to act now to develop a workforce strategy that will ensure they have the talent they need in the coming year to succeed,” he said.

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