Tight labour market creates new training challenge

12 September 2007

Tight labour market creates new training
challenges for hospitality industry

Hospitality employers are facing new training challenges as the industry continues to expand in New Zealand’s tight labour market.

The Hospitality Standards Institute (HSI) published two reports today (Wednesday September 12) on the growth of the industry and future skill and training needs.

The reports show the hospitality industry experienced unprecedented growth over the past five years, with a 20% increase in staff between 2001 and 2006 – well above the economy as a whole which showed employment growth of 14%.

The number of hospitality businesses grew by 27%, with more than 4,000 new businesses creating even greater demand for skilled labour. More than 135,000 people are now employed in New Zealand’s hospitality industry.

HSI’s Chief Executive, Steve Hanrahan, said the tight labour market meant the industry was now dealing with training issues resulting from greater use of non-skilled and migrant labour, Generation Y [staff born between 1978 and 1994] work ethics and poor basic literacy and numeracy skills.

With almost 40% of hospitality employees aged under 25, Mr Hanrahan said many employers were changing their management styles to successfully recruit, train and keep young staff. This included offering flexible roster options to help support work/life balance issues and providing value-added remuneration packages that included training and development.

Future labour shortages are expected to result in even greater reliance on immigrant labour. This is already beginning to show, with new statistics from HSI indicating that one in three hospitality employees last year was born outside of New Zealand, compared with one in four in 2001.

HSI is now developing key plans to ensure it has the capability to meet the changing hospitality environment. These include a strategic training plan that identifies HSI’s response to support employers in meeting the new skills needs, and an application to the Government via its Investment Plan process for tertiary funding to meet increased growth in demand for training.

“Our future challenge is to engage effectively with the increased number of employers who are demanding training support,” Mr Hanrahan said.

Mr Hanrahan said the past five years had seen a significant shift towards higher qualifications in the industry, with 22% of hospitality employees having vocational qualifications and a further 10% with degrees. “This is a positive sign that more and more people are treating hospitality as a profession and gaining qualifications to support building their careers.”

HSI’s Chair, Carol Stigley, said the two reports were timely, with even greater demand for skilled staff expected in industry over the next five years.

“The timing for these reports couldn’t be better as we’re expecting another 13,500 employees to be hired in the next five years through to 2011, and we need to prepare now to be able to help employers manage and support this growth,” she said.

ENDS

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