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Labour market eases but skills shortage persists

Labour market eases but skills shortage persists, RCSA research finds

Wednesday 19th November 2008 - Demand for healthcare workers appears recession-proof but business professionals are facing a significant slump in their job prospects, according to the latest recruitment industry research.

The Quarterly Member Survey by the peak industry body RCSA, found that business professionals have dropped from 4th to 14th place in the skills shortage list, while demand for health professionals and nurses remains static. The role that has topped the list for several years now, non-building professional engineer , also experienced a 6 per cent drop in demand, although it still remains in the number one spot.

The RCSA research also saw an easing of labour market conditions, as permanent placements dipped by 4 per cent and temporary or contract placements rose 3 per cent. The proportion of recruiters reporting that ‘job applicants have the right capabilities’ has risen 12 per cent and there was a 9 per cent rise in the number reporting that they have sufficient applicants for each job. Overall, the survey found that labour market conditions have improved back to the level experienced in April 2004.

“What we’re now seeing is a return to a more sustainable level of employment demand. Throughout last year and the beginning of 2008, the labour market was stretched so tight that employers were often unable to find the talent they needed; now there appears to be some relief at hand. We’re also seeing more employers take a risk-averse approach to hiring, and opting for temporary staff rather than permanent placements,” Ms Julie Mills, CEO of the RCSA said.

The pessimism affecting consumers and business globally was reflected in the RCSA’s results, with recruitment business confidence plummeting by 21 per cent (to 43 per cent), and expectations of growth dropping by 5 per cent, and becoming negative for the first time, with recruiters expecting an average 0.8 per cent contraction in revenue. However, recruitment owners and managers are responding quickly, with 71 per cent already taking action to address the downturn.

“The recruitment industry has weathered downturns in the past and we are confident it will do the same in this one. Recruiters who provide high quality service will be the winners in this tougher environment, as will those who can be flexible about how they work with clients who are under budgetary pressures,” Ms Mills said.

According to the survey, the top concern for the recruitment industry right now is the state of the economy, followed closely by their clients’ lack of hiring intentions. But despite the easing of the labour market, the lack of suitable candidates is still the third-biggest concern, cited by three quarters of the industry. According to the RCSA, this is unsurprising.

“Even though we have more candidates in the market and slowing employment growth, the downturn won’t simply make the skills shortage disappear. Years of under-investment in education and training, coupled with the large number of baby boomers now retiring, means that we will continue to see pockets of skills shortages in certain roles and industries.

“We also need to remember that while the jobs market may be cooling, it is coming off a very high base of what was almost full employment. Employees who are worried about their jobs need to remember this, and try not to panic.

“And in these uncertain times, both employers and job seekers should look to recruitment professionals for assistance and advice. As talent and workforce managers, this industry is the solution point for those looking for employees or looking for work,” Ms Mills said.

Top 10 Skill Shortages in New Zealand
1. Non-building engineering associates and technicians
2. Health professionals
3. Medical technicians
4. Drivers
5. Non-building professional engineers
6. Nurses
7. Mobile plant operators
8. IT and telecommunications trades
9. IT and telecommunications technicians
10. Electrical trades (building)


Recruitment and Consulting Services Association
The Recruitment and Consulting Services Association (RCSA) is the leading industry body for the recruitment, consulting and on-hire employment services sector in Australia and New Zealand. With over 2700 Corporate Members and 980 Individual Members, the Association sets professional standards, conducts research, educates and develops members’ skills, monitors industry development and lobbies State and Federal Governments on issues directly affecting members.

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