New Zealand businesses have been feeling pressure since the pandemic’s beginning to source, hire and retain skilled workers.
In a recent report released by the Auckland Business Chamber, 57% of New Zealand businesses are experiencing skills shortages, record-high wage growth, employment levels, and demand for goods and services.
New Zealand economist Brad Olsen says businesses should expect to feel the effects of skills shortages for at least two years as the country experiences its lowest population growth in three decades.
These sentiments are echoed by BusinessNZ Chief Executive Kirk Hope. “There is no spare capacity in the labour market, and it has been made more acute by having our borders closed to immigration for so long. With borders now opening up, we also risk a net outflow of workers from New Zealand and an even bigger skills shortage crisis.”
Although the New Zealand government have lifted immigration restrictions and COVID-19 regulations have eased, the Reserve Bank has warned that the shortages will continue for years to come.
How to attract and retain New Zealand skilled workers in a labour shortage
Skilled workers have typically always been more challenging to recruit regardless of market conditions because the pool of expertise can be limited.
But every organisation needs a skilled workforce. Employing staff who are well-trained, knowledgeable in their roles and in your niche market, and able to adapt to changing working conditions are priceless assets to your business. They foster innovation and creativity, require less leading and training and promote growth. Because there is such high demand for skilled workers, they can also be difficult to replace.
To have the best chance of securing and retaining skilled workers in a challenging candidate-driven market in New Zealand, international businesses must understand what’s making skilled workers leave their roles in the first place.
Understand why do skilled workers leave in the first place?
Losing skilled workers hurts, not only because they’re valued team members but also because they can be very challenging (and expensive) to replace.
One study from SEEK found that the top reason workers left their job was that they didn’t like their bosses.
Another study found that 70% of workers won’t leave a job if they feel engaged in their role. Your top performers naturally want to achieve and feel like they’re making a difference both professionally and for the company.
Skilled workers might look for other roles if they feel their expectations aren’t being met, they’re bored or aren’t able to use their skills and experience at their full potential, they don’t feel valued, or there is simply not enough autonomy.
Consider what skilled workers value in a workplace
TradeMe’s Job Hunter Survey found that the most important factors in a workplace were:
- Job security: 58%.
- Work/life balance: 57%.
- Feeling valued: 54%.
- Development opportunities: 49%.
- Finding a company that’s a ‘good fit’: 49%.
- Their day-to-day duties: 48%.
When developing your job descriptions for New Zealand workers, consider all the essential aspects they’re looking for in recruiting companies.
Although salary didn’t make the above list, skilled workers generally get paid more than the average professional. You’ll probably find that skilled workers will set their expectations on what an ideal salary is according to industry benchmarks and their experience level. Keep this in mind when developing your role descriptions, and consider offering a negotiable salary.
Work with your skilled workers to ensure they achieve optimal work-life balance
Making a genuine effort by sitting down with your skilled workers to develop a tailored work-life balance plan will ensure they feel heard.
One way of doing this is by offering hybrid working-from-home arrangements. Although almost 90% of workers want to work partly or entirely from home in a post-pandemic world, one-third of New Zealand employers want their workers back in the office full-time.
In a candidate-driven market, employers must listen to the values of their staff when it comes to work-life balance to keep them as content as possible.
Focus on career development
A recent study by Microsoft’s latest Work Trend Index found that two-thirds of workers said they were unable to stay at a company for long if the company didn’t offer opportunities to grow and develop in their roles.
Make it clear to your skilled workers that there is a path to develop their role in the business by exposing them to different functions and offering them more responsibilities.
One way of doing this is to work with each employee on a personal development plan. Start by visualising their ultimate goal. What are their specialisations? What diverse skills can they use in other functions of the business?
Then, work out what their core career goals are. What do these goals look like? And how are you going to help them get there? They might be a content writer who wants to branch out into UX/product writing. Or, they could be a civil engineer who wants to take on more leadership responsibilities.
Keep it future-focused; how do they want their current strengths and areas for development to look in five years’ time? And set up monthly meetings to monitor the progress of each growth milestone.
Consider remuneration strategies
Remembering that skilled workers typically get paid more than the average professional and that salaries can often fluctuate with market conditions, you can take several steps to attract and retain skilled workers for several remuneration strategies
Short-term incentives
Cash bonuses and pay increases are simple to execute and can be flexible, providing you have the capital. However, consider that bonuses are subject to tax at your employees’ marginal rate and there are added costs such as payroll tax and WorkCover.
All things considered, bonuses increase job satisfaction for workers because they feel their efforts are being recognised.
Salary packaging
Salary packaging is a concept whereby employees accept certain benefits – car allowances, computers, gym memberships, health insurance – in return for a marginally lower salary.
Because of the concessional tax treatment of some benefits, employees can be in a better after-tax position by packaging their salary. For you as the employer, certain employment costs like payroll tax, workers’ compensation and superannuation will also be minimised. For this reason, it’s an excellent strategy to use when you don’t have a lot of capital to work with.
Shareholding
Offering your employees equity in the business via shares or options can help attract and retain skilled workers, align interests between business owners and workers, and improve their salary package without impacting cash flow.
