Possible slowdown in employment market

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Heading into the second half of the year we are still experiencing a difficult candidate market.

The first half of the year really has highlighted ever increasing labour shortages – there is definitely a shortage of NZ candidates, and although we are receiving a huge increase in international applicants, there is not a lot we can do with them right now.

This has caused challenges, but also allowed us to do what we do best and that is finding the right candidates that not only can do the job but can also add value and fit the team.

With the borders about to open as we write, this will hopefully help with some of the skills shortages we have been seeing, but we recommend you read up on becoming an accredited workplace if you’re planning on hiring internationals.

It is possible that we are starting to see a slowdown in the employment market with reports showing job boards are starting to see a decrease in advertised vacancies. Reports are also showing flexible opportunities have decreased more than permanent opportunities.

The context around this, which of course needs to be taken into account, being that for a period of time now we have seen record highs, so even with a softening of the marketing, the figures are still significantly higher than a year and even two years ago.

Therefore, a slight slowing of the market isn’t a real cause for concern right now.

As the country starts to really struggle with rising inflation, interest rates and cost of living we are seeing employers respond to business and economic conditions with caution. Whilst there is still some optimism in the market, for both employers and employees, the demand in the recruitment sector is largely being driven by the public sector.

Reports indicate that those in junior to mid-level roles are now not as likely to look at new roles, possibly choosing stability of their current employment situation ahead of a potentially unstable economic conditions. It also seems that smaller employers are opting out of the wage race, which for now, still seems to be forging ahead.

Prior to Covid, NZ had approximately 90,000 people coming into the country; Over the past year there has been a net outflow of more than 7,000. It’s easy to see why the labour market has tightened significantly.

These supply and demand issues, along with cost of living increases means that candidates are looking for better pay and working benefits – which has led to a high market turnover and the steep increase in wages we are currently experiencing.

There is a demand for staff across every sector at present. Those that we are seeing the highest increases in wages over the past two years include manufacturing, transport and logistics.

Advertised salaries for production workers have increased on average 33%. Another sector with high salary growth is the retail and consumer products sector with some roles experiencing increases of up to 30%.

So for now, it certainly is still a candidate’s market. We may see some relief when the borders open, however I suspect that this will take some time to have any real effect on employment figures.

Related: Redefining the employment relationship

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Kellie Hamlett
Kellie Hamlett
Director, Recruitment & HR Specialist, Talent ID Recruitment Ltd. She can be contacted on kellie@talentid.co.nz or 027 227 7736. Talent ID are Recruitment Specialists and can support you through your recruitment process.

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