Avoiding Skills Shortages In Business

Media release

23 May 2013

New research on firms’ demand for skills and recruitment difficulties

New Zealand businesses can avoid skills shortages if they plan ahead, new research has found.

The Ministry of Business, Innovation and Employment has released two reports that investigate how employees’ skills contribute to business growth in New Zealand and the hiring difficulties firms face.

Nuran Çinlar, Head of Science, Skills and Innovation Research, says the reports offer some interesting insights that challenge commonly accepted beliefs about skills shortages.

“The research suggests that skills shortages are a real issue for some New Zealand firms and the impact on business performance can be significant.”

“We have found that firms who anticipate their future skills needs and begin the HR process early were much more likely to have the skills they needed, when they needed them. This contrasts with what we sometimes hear about, of businesses assuming they will be able to find the right people quickly, once they have an urgent need for new skills.”

Other findings include:

• recruitment difficulties are linked with higher performing firms, such as businesses that pay high wages, export, or undertake research and development. This suggests that recruitment difficulties are not being driven by businesses that simply can’t pay the market wage for the skills they need.

• skills shortages are often seen as a sign of growing economy, but the new research suggests that many businesses face recruitment difficulties in good times and bad, with reported recruitment difficulties persisting into the recessionary period after the global financial crisis.

Dr Çinlar says the research highlights the importance of tertiary education providers and businesses engaging with each other.

“We need our high performing businesses to have the skills they need to succeed. One way government can help is to get better information to students about what skills employers are demanding.”

Earlier this year, MBIE released the first Occupation Outlook report which examines 40 selected occupations to help students and parents better understand what jobs are needed in New Zealand. The report brings together a range of demand-side information, including feedback from industry and employment forecasts, to provide an assessment of future prospects for each occupation.

Other initiatives in place across government to deliver more skills in demand include the Vocational Pathways to help students make more informed decisions about their learning choices and the new Industry Training initiatives including New Zealand Apprenticeships. Additionally, Maori and Pacific trades training is expanding and the Skills for Canterbury contingency fund is focussing funding towards priority trades. The next Tertiary Education Strategy will seek further alignment between tertiary education provision and labour market requirements.

The reports -

The role of skills in supporting firm growth ambition is available at: http://www.dol.govt.nz/publications/research/role-skills-supporting-firm-growth-ambition/

Firm-level hiring difficulties: Persistence, business cycle and local labour market influences is available at: http://www.dol.govt.nz/publications/research/firm-level-hiring-difficulties/

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