Welcome 2024: here’s the outlook

- Advertisement -
- Advertisement -
Happy New Year. As we enter another year of business it is a good time to reflect on what has been and finalise planning on the year to come.

I’m big on practicing an attitude of gratitude – reflecting for me is also considering what I am grateful for. In business I am grateful for the team I have around me. They are always striving to achieve outstanding outcomes for our clients – they really do go above and beyond. It’s inspiring, motivating and an honour to work alongside them.

2023 has been a challenging year for many reasons. As a nation, just when we thought we were pandemic-free we were faced with the challenges of high inflation, a downturn in the housing market, and national flooding disasters.

There has been a lot for us to navigate and many have made it through to this point feeling like they are in survival mode.

For us it was an incredibly busy year partnering with employers to find key talent – no easy feat with widely-felt talent shortages across most sectors.

The shortage of key talent has meant that end-to-end recruitment processes have been stretched out to sometimes double the length of time (depending on the role).

We know that for our employers, recruitment and retention are some of the most challenging and competitive aspects to running a business – particularly over the past two years.

The talent shortage means the unemployment rate currently sits at 3.9% – it has remained steady, with predictions that the figure will rise as we enter uncertain economic times in 2024.

For now we are still working within a candidate-driven market, which leaves smaller businesses in a wage war with larger companies with more resources, resulting in a real hindrance to business growth.

Salaries have continued to rise; Interestingly a recent statistical report indicated that every single region in New Zealand reached a record average high when it came to salaries in 2023, with the average salary in New Zealand being $71,800, up 8% from last year.

Even with these wage hikes, 61% of New Zealanders believe their current pay does not meet the rising cost of living pressures.

Money talks at present, and while not always the number one reason people look to change companies, it has become a high priority.

A recent Strategic Pay survey noted that the engineering and technical, finance and accounting, and HR roles have been the most challenging and difficult positions to fill. Those who participated in the survey also noted that staff turnover has mostly remained the same in compared to last year.

Following on from the international border closures due to Covid-19 lockdowns in 2021 to 2022, this year we have seen a strong recovery in the migration sector, with an increased number of permanent arrivals in 2023. We are seeing this filter through to the employment market – but it is slow – mitigated somewhat as we continue to lose talent lured by off-shore roles and much higher salaries.

After six years of New Zealand being led by a Labour government, the 2024 General Election saw the National party win 39% of the party vote. With the Government’s 100-day plan just released, we see that the Government is promising action. Below are some of the key points that will be of note to employers in the year ahead:

  • Extend 90-day trial periods to businesses with more than 20 employees
  • Abolish fair-pay agreements
  • Streamline NZ’s Immigration process (including a refresh of many Immigration NZ polices)
  • Create a multi-million-dollar fund to promote regional tourism events and activities
  • Ending various business support programs (E.g. Provincial Growth and Callaghan Innovation)
  • Disestablish Te Pukenga
  • Review of Government Departments’ staffing

It is fair to say that there will be ongoing challenges for business. For many, 2023 was a year we felt great uncertainty and volatility – increased cost of living pressures, rising inflation and interest rates, talent shortages, changes in Government and fears of an upcoming recession – we saw it all.

With modest reports on the year ahead in terms of the economic outlook, it’s fair to note that while it’s not exactly looking rosy, it probably won’t get any worse either.

Interest rates are forecast to level out, with inflation slowing and the housing market improving. Despite the commentary, the year ahead does have an optimistic feel to it.

So for employers, particularly in the first half of the year, while the market may soften a little, we expect it to remain candidate-led. A focus on retention of key talent, training and development will be key.

We expect the focus on salaries to remain strong, and offering incentives and benefits that equate to ‘cash in the pocket’ may just give you the edge when it comes to recruiting.

- Advertisement -
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.

Related Articles