Wage pressure in high-skill roles intensify shortages
Wage pressure in high-skill roles intensify shortages: Hays Global Skills Index
While wages have not kept up with inflation and the recent unemployment figures were at their highest levels in New Zealand since 1999 (7.3 per cent), wage pressure in high-skill industries continue to indicate skill shortages for key talent, creating an economic paradox.
This is one of the findings of the Hays Global Skills Index – a major report by recruiting experts Hays in collaboration with Oxford Economics.
Overall, New Zealand scores 4.8 on the Index, compared to the average of 5.1. The Hays Global Skills Index creates a score for each country between 0 and 10 on the constraints and frictions being faced by its market for skilled labour. This is calculated through an analysis of seven components, covering areas such as education levels, labour market flexibility, and high-skill wage pressures.
A score above the mid-point of 5.0 suggests that employers are witnessing difficulties finding the key skills they need and are suffering market friction, whilst a score below 5.0 indicates a lax labour market in which there are no major constraints on the supply of skilled labour. Within these overall scores, however, the scores attributed to each of the seven components can vary significantly, highlighting the different dynamics and pressures faced.
The Index shows that each country surveyed faces specific issues in its skilled labour force. 16 of the 27 countries are currently suffering some degree of labour market tightness, despite the global economic slowdown – an economic paradox.
NZ recorded the highest
possible wage disparity between high and low skilled
industries, according to the Index. New Zealand scored 10.0
for wage pressures in high-skill industries.The nation also
posted 1.3, the lowest-possible result on overall wage
pressure, meaning that other wages are not rising.
“In New Zealand there has been a significant demand for qualified Engineers and other professionals in the construction sector to carry out the rebuilding of Christchurch after the earthquake,” says Jason Walker, Managing Director of Hays in New Zealand.
“As the major rebuilding projects start to come on line, this will add to existing shortages in the construction industry. This will also exacerbate the talent mismatch between the South Island and the North Island.”
Shortages mainly apply to Quantity Surveyors, Residential Project Managers, Senior Commercial Project Managers, Machine Operators and Project Managers with drainage experience, according to the report.
“This has led to the high wage inflation highlighted by the Index as trade specialists demand higher pay and this squeeze is highlighted by the maximum score of 10.0 for wage pressures in high-skill industries,” says Jason.
According to the report, whether the pressure on skills shortages in New Zealand will worsen or ameliorate will depend on the outlook for the market for raw materials and energy.
“If the current slowing growth in China and other fast-growing economies proves temporary and economic growth recovers in the US and Europe, then pressures on recruiting and retaining experts in that sector will intensify.”
To combat the mismatch of skills availability and demand around the world, the Hays report proposes a long-term three-point action plan for policymakers. First, governments should focus on the skills their economies lack and take appropriate measures to attract the relevant people through targeted immigration. This would in many cases require an overhaul of existing work visa arrangements. Second, employers should be offered fiscal incentives to increase their provision of relevant training. Third, governments should work with employers and educational authorities to implement a series of measures and incentives to persuade young people to acquire the skills that are most needed on both a country and international level.
To see the full
Hays Global Skills Index and report, please go to www.hays-index.com/
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.
Hays is the leading global specialist recruiting group. We are the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in Asia Pacific and the UK and one of the market leaders in Continental Europe and Latin America. We operate across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments.
Hays employs 7,800 staff operating from 245 offices in 33 countries across 20 specialisms. For the year ended 30 June 2012, Hays reported net fees of £734 million and operating profit (pre-exceptional items) of £128 million. Hays placed around 55,000 candidates into permanent jobs and around 182,000 people into temporary assignments. 33% of Group net fees were generated in Asia Pacific.
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