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Training staff is key to reducing skill shortages

31 August 2006

Training staff is key to reducing skill shortages

The findings in a just-released labour market report highlight the benefits of employers investing in staff training as a way to help alleviate ongoing skill shortages, the Department of Labour says. The Department's Skills in the Labour Market report, which covers the June 2006 quarter, shows that while finding skilled staff is the easiest it has been for seven years, skill shortages remain a major issue in the economy.

Skill shortages have continued to reduce from their historic highs of late 2004 and early 2005. A fall in job vacancies over the past year also points to an improvement in recruitment conditions for employers, the report finds.

Department of Labour Deputy Secretary Monique Dawson said the number of advertised vacancies remained high, indicating the labour market was still tight and that recruitment conditions remained difficult. "The labour market has undergone a fundamental change in the past six years. Even with the recent easing in the labour market, overall we expect to see employment growth continue and unemployment levels to remain low," she said.

"We will not see again unemployment levels of 10 per cent or more. Indeed, over the next three to five years, our worst case forecast is for unemployment to peak somewhere around 4.5 per cent.

"So while businesses might find it easier in the short-term to find skilled staff, the reality is the days of a readily available labour supply are over, probably forever." In recent years, businesses have responded to rising demand for their goods and services simply by employing more and more people. But this is becoming less of an option as the number of people available to hire reduces, Ms Dawson said.

"Looking forward, we will continue to encourage New Zealanders living overseas to come home, and will continue our targeted immigration polices to bring in people with the skills we need.

"Businesses can also contribute by increasing their productivity. Productivity isn't about working longer hours; it's about increasing the value of every hour worked. A key way to do this is by increasing the skills of our existing workforce through education and training.

"It may well be that the skilled employee a business is looking to recruit is already in their workplace, and all that they need is some extra training. Additional training is an investment not only in that staff member, but also in the business and the New Zealand economy," Ms Dawson said.

The Skills in the Labour Market report summarises information on skill shortages, mainly focused on the Quarterly Survey of Business Opinion from the Institute of Economic Research, and the Department of Labour's

Job Vacancy Monitoring Programme.

The report is available on the Department of Labour website at: http://www.dol.govt.nz/lmr/lmr-skills.asp

ENDS

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