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Skills Shortage Big Worry, Say NZ Businesses

News Release
12 March 2008

Skills Shortage – That’s the Big Worry, Say NZ Businesses

New Zealand businesses are still among the most worried in the world about a shortage of skilled workers, according to the latest findings of the Grant Thornton International Business Report.

“This is the second year in a row that the problem of the availability of a skilled workforce has been cited as the top constraint on the ability of New Zealand companies to expand their business,” said Peter Sherwin, New Zealand spokesman for Grant Thornton, the accounting and business consultancy firm behind the international survey.

“The disturbing factor is that it continues to climb as a worry for New Zealand firms. In the latest survey, 61% of the New Zealand businesses surveyed said it was a major concern – last year the figure was 60% and the year before that it was 38%.

“The mild consolation is that its concern is second highest among countries, whereas the year before it headed the constraints league when it came to availability of workforce.”

In Thailand, 68% in the latest survey saw skilled workforce availability as a major constraint.

Australia was third most concerned on this subject, with 58% of businesses worried about the shortage of skilled staff. The global average was 37%.

“It seems that while there has been a lot of focus on the drain of New Zealand skills to Australia, our transTasman neighbours have an almost equal issue with lack of workers,” said Mr Sherwin. “Both countries are bleeding, and they are far from alone – among the various constraints to business expansion, skilled workforce shortages provides the highest average as a concern globally.”

Regulations and red tape, at one time consistently considered the biggest barrier to business expansion, is now consistently only the second biggest worry for New Zealand businesses. Some 47% of those surveyed ranked it in the top bracket alongside workforce availability, compared with only 32% in Australia and a global average of 31%. Once again, Brazilian businesses were the most concerned about red tape.

“It is interesting to consider that the two biggest issues for New Zealand, skills shortage and red tape, can both be directly influenced by government,” said Mr Sherwin. “A lower taxation regime could have some effect on slowing the departure of skills, and fewer compliance requirements could definitely reduce further the issue of red tape.

“Other constraints are purely commercial by nature, and they happen to be of less concern to New Zealand businesses.”

ENDS

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