RECRUITMENT

The End of Skills Shortages?

By Kevin Eder, founder and managing director of Tradestaff

Unemployment is tipped to go as high as six per cent in 2009, so that must mean the end of skill shortages mustn’t it?
Well actually, no.
There is a real danger that we confuse short term rises in unemployment with our ongoing employment needs.

I consider that the economic downturn and subsequent unemployment increase to be nothing other than a blip and potentially only a two year blip that could easily see an even greater skill shortage in 2011 and beyond than we have experienced in the last three or four years.

Firstly, we have an aging population like never before. In 1991 the average age of a New Zealander was approximately 31 years old, but by 2007 that average age was 36. So in just 16 years the average age increased by five years and that rate of aging is getting faster and will continue to grow for the next ten to 15 years.

What does that mean? Quite simply we have people retiring at a rate much faster than we have them entering the work force, so much less workers!

Recently I attended a forum in the transport and logistics’ industry. That industry has traditionally had a high average age work force and so as an industry they recognise the need to attract young people into their workforce now.

The new staff required in order just to maintain the status quo of business services provided in five years’ time demands that the transport and logistics industry employs 20 per cent of all school leavers in the next five years. That is one out of every five school leavers!

Secondly we have to get real about immigration. During the election campaign Winston Peters was spouting the popular line that we should stop immigration to ensure that there were jobs for New Zealanders. The Labour government, seemingly oblivious to the fact that record numbers of Kiwis have been leaving the country to work and live overseas, cautiously agreed that immigration numbers may need to decline. I suggest that we should be aggressively setting targets to increase immigration numbers and taking advantage of rising unemployment in other countries to snare good workers who may be disillusioned with their lot at home. Unemployment in Australia is tipped to go as high as nine per cent which must create an opportunity for NZ.

But it’s not just more people we should be looking at, but also the quality of those people. Let’s target professionals and qualified trades people and start bringing them here now. We will need them in three or four years’ time and by then the opportunity will be lost as unemployment begins to drop in other countries too. So why not identify what types of skills will be required and ‘head hunt’ people with those skills in other countries now and assist them to come to NZ?

Thirdly our tertiary education and the costs associated with that are a mess. I welcome the National policy of voluntary bonding medical staff but I feel it doesn’t go anywhere near far enough. Here’s my radical plan.

When setting tertiary fees take into account what shortages are forecast in the medium term, say three to five years and subsidise those occupations that NZ will need. For example, if we know that there will be a severe shortage of engineering graduates in NZ from 2011 onwards and that we will need them for infrastructural growth, how about having 50 FREE university spots up for grabs on a bonded basis.

For simplicity’s sake imagine a bonded degree could cost $60K and that under my plan the bond period was for six years. If the graduate stays in NZ for six years then the loan is written off but if the graduate leaves NZ during the six year period they are required to instantly pay the balance off on a pro-rata basis. For instance, moving to Australia after three years would have a get out cost of $30K.
All industry sectors could be regularly measured to see where the likely shortages are going to be and fees set accordingly. In the healthcare industry, for instance, it may be obvious that we are likely to have plenty of child care workers but a severe shortage of aged care workers (remember that aging population). So in order to meet those needs charge more for child care training (so the keen ones still do it) but provide subsidised, or even free, training to the aged care training.

And lastly, as employers we need to take advantage of the blip, or breather, and up skill our own people. I have heard from many businesses over the last few years that they have simply been too busy to train their staff. If things are as quiet as forecast over the next year or so then we should be making use of that time and training like mad now.

Like it or lump it, skill shortages are here to stay and those companies and countries that recognise it and do something about it now will be in a much stronger position in 2011 and beyond than those who think it is all over.

For further information contact: Kevin Eder,
Email: Kevin@tradestaff.co.nz or visit: www.tradestaff.co.nz