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March Job Vacancy Numbers Show Skill Shortages

Media Release
27 April 2005

March Job Vacancy Numbers Show Skill Shortages Continuing


Skill shortages continue to grow, the Department of Labour's latest report on advertised job vacancies shows.

The Job Vacancy Monitor showed that March was the 15th consecutive month in which there had been double-digit percentage growth in job advertisements, compared with the same month the previous year. Overall, job vacancies were 14 per cent higher than in the year to March 2004.

Department Deputy Secretary Andrew Crisp said the growth in advertised vacancies reflected the increasing difficulties employers experienced recruiting staff.

To compile the Job Vacancy Monitor, the Department analyses advertised job vacancies in 25 metropolitan and provincial newspapers on a specific day each month to provide a snapshot of the recruitment activity. This is part of a wider programme of gathering and assessing labour market information to enable the Department to assess trends and predict future change.

Mr Crisp said the monthly Job Vacancy Monitor provided a regular and timely insight into advertising trends across all occupational categories.

"This and other reports produced under our monitoring programme indicate that, to a large extent, the skill shortages are a product of New Zealand's strong economy. Economic growth is increasing demand for skilled labour."

The Department's reports inform the Government's strategies for alleviating skill shortages, including immigration and industry training policies. Non-governmental organisations also use Departmental reports to plan for the future.

Mr Crisp said job vacancy advertisement growth showed more employers who might usually fill vacancies by word-of-mouth had resorted to advertising, and were having to re-advertise. This was a consequence of the demand for skills outstripping supply, he said.

The largest increase in advertised vacancies (24 percent) was for highly skilled occupations including accountants and auditors, managers, teachers and health professionals.

Advertising for skilled occupations had increased six percent compared to March 2004 advertising. Skilled occupations include technicians, associate professionals and trade workers.

Mr Crisp said the slower increase in job advertisements for trades workers was the result of the steadying off in vacancies for building trades, which dominate this category.

"This probably reflects a levelling off of activity in the construction industry," he said.

Zero growth in building trade vacancies was somewhat compensated by 12 percent growth for metal trades.

Semi-skilled/elementary vacancies increased by 16%, with strong growth for plant/machine operators and assemblers, agriculture and fishery workers, service and sales workers, and elementary workers.

A separate Department initiative counts IT positions on a weekly basis on two websites. In March the number of positions increased by 55 percent compared with March 2004.

"The current labour market conditions are expected to prevail for some time, meaning skill shortages will continue. The unemployment rate is expected to edge lower in the first half of this year and stay under four percent over the next 18-24 months," Mr Crisp said.

ENDS

For the March Job Vacancy Monitor visit http://www.dol.govt.nz/publications/jvm/index.asp.

27 April 2005

Background Information

What is the Job Vacancy Monitor?

The Department of Labour produces the Job Vacancy Monitor (JVM). The JVM compares the number of advertised vacancies with the number for the same time the previous year. It also has an occupational breakdown of the advertisements, and categorises these occupations into highly skilled, skilled and semi-skilled/elementary groups.

How is it compiled?

The Department analyses advertised job vacancies on a specific day each month to provide a snapshot of the employment scene.

Twenty-five newspapers are included, enabling good regional coverage. The Department’s website lists the publications job vacancy advertisements are collected from. It also outlines the occupations job vacancy advertisements are categorised into.

What does it tell us?

It provides a timely and regular insight into job vacancies, highlighting trends and sudden shifts. Changes in the number of job advertisements are indicative of labour market demand and supply forces. For example, more advertisements could mean demand has increased, it could mean supply is limited, or it could be a mix of the two. The JVM highlights trends over time, and also provides understanding into anecdotal accounts of labour market activity.

What is its purpose?

The JVM is a key part of the Department’s wider Job Vacancy Monitoring Programme. The programme consists of the JVM, and also an intensive, largely qualitative survey of employers who have advertised vacancies, in order to gain an in-depth understanding of shortages in key occupations. The results of these surveys are analysed alongside information from a range of other sources to produce an annual set of reports. Sixteen reports covering trade occupations were published in March 2005, and reports of selected professional occupations will be produced mid-2005.

The programme aims to inform the Government’s strategies for alleviating skill shortages, including immigration and industry training policies. Industry bodies, education and training providers, and labour market participants also use the report to understand trends and plan for the future.

The programme identifies which skilled occupations are in shortage, and to better understand the supply and demand forces contributing to these shortages. The programme recently influenced changes to the skill shortage lists the Department uses to attract the type of skilled migrants the labour market needs.

How does the JVM differ from the ANZ Job Advertisement series?

The two series complement each other as the JVM offers more detail, but the ANZ series is more timely. The differences in the series include:

1. The ANZ series is an aggregate count of advertisements whereas JVM captures and analyses each advertised vacancy separately and enables detailed analysis by occupation, region, urban area etc. 2. JVM measures job vacancies, while ANZ measures job advertisements. If an employer took a double-page spread in a newspaper in which it advertised 50 positions ANZ would count that as a single advertisement whereas JVM would count it as 50 vacancies. The number of vacancies per advertisement has grown over time as the labour market tightens. This is the major reason why JVM has measured faster growth than ANZ. 3. JVM is based on 25 newspapers whereas ANZ is based on seven. 4. ANZ is based on all editions of each newspaper each month whereas JVM is based on a single edition each month (usually the first Saturday edition). 5. JVM removes duplicate vacancies (e.g. a vacancy advertised in two different papers on the same day) whereas ANZ does not.

What else does the Department of Labour produce regularly?

The Department plays a key role in monitoring and predicting labour market trends. Two key reports are: the quarterly Labour Market Outlook, which predicts trends for the following two years; and the quarterly Skills in the Labour Market, which analyses all available information on the labour market to summarise events in the past quarter.

Where can I get more information?

Visit www.dol.govt.nz for reports and background information supporting them.

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