Can New Zealand deliver the high-skills it needs?
Tuesday 29th October, 2013
Can New Zealand deliver the high-skills it needs? Hays Global Skills Index
An ongoing shortage of high-level skills means that New Zealand’s labour market is yet to find balanced ground, according to the Hays Global Skills Index. Can it deliver the high-skills needed?
The Index assesses the efficiency of the skilled labour market in 30 countries, or its ability to supply skilled labour. The Index scale ranges between 0 and 10, with the higher the Index score the greater the difficulty for employers in findings skills. A score greater than 5 indicates skill shortages; 5 or less indicates few signs of skills shortages.
The score of 4.3 for New Zealand suggests employers are, for the most part, able to meet the demand for skills with appropriate candidates. But it is a different story for highly-skilled professionals; upwards pressure on wages is a clear indicator that these professionals remain in short supply.
“The current economic landscape is looking a lot more positive,” says Jason Walker, Managing Director of Hays in New Zealand. “The global growth outlook is firmer and New Zealand is on the road to recovery with the Christchurch rebuild expected to be in full swing in 6 to 12 months.
“Yet while unemployment is forecast to be 6.2 per cent for the year, employers continue to struggle to attract highly skilled and experienced professionals.
“It is a bitter paradox caused by employers being unable to find the highly skilled workers they need, particularly in more technical areas such as IT, construction and engineering,” he said.
The overall Index score is the average of seven indicator scores. Three indicators explore the supply of talent, namely education flexibility, labour market participation and labour market flexibility. One looks at talent mismatch. The final three are wage pressures indicators, looking at overall wage pressure, wage pressure in high-skill industries and wage pressure in high-skill occupations.
“Skills gaps can manifest themselves through wage pressures, a talent mismatch and/or supply,” says Jason. “Our Index looks at all three areas.
“Of interest in New Zealand is the score of 10.0 – the maximum possible – for ‘wage pressure in high-skill industries’, reflecting the massive widening in pay differentials between high and low-skill industries. Australia’s high score of 8.0 for this indictor shows it is also experiencing pressure in this area, which is exacerbating the problem for this part of the world.
“This upward pressure is acute and shows employers are under great pressure to increase salaries in response to the shortage of skills in high-skill industries. As a result, a premium is paid for those in technology, residential construction and engineering.
“Also of interest is the score of 6.1 for ‘labour market participation’, showing that more of the talent pool could be fully utilised. In particular, New Zealand could do more to ensure that working age people between the ages of 55 and 64 are in the workforce,” he said.
According to Hays, in New Zealand the top five skills in
most demand are:
1. Software Developers
2. Quantity Surveyors
3. Qualified CA's for professional practice
4. Civil Engineers
the Hays Global Skills Index
The Hays Global Skills Index is a composite figure based on seven components. A score of 5.0 indicates a balanced picture for labour markets, a score close to 0 indicates less intense competition for vacancies, and a score close to 10 shows severe difficulty in finding skills.
The seven components
making up the Hays Global Skills Index are:
1. education flexibility
2. labour market participation
3. labour market flexibility
4. talent mismatch
5. overall wage pressure
6. wage pressure in high-skill industries
7. wage pressure in high-skill occupations
The Hays Global Skills Index can be viewed at www.hays-index.com/2013
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.
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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.
As at 30 June 2013 we employed 7,840 staff operating from 239 offices in 33 countries across 20 specialisms. For the year ended 30 June 2013, Hays reported net fees of £719 million and operating profit (pre-exceptional items) of £125.5 million. Hays placed around 53,000 candidates into permanent jobs and around 182,000 people into temporary assignments. 29% of Group net fees were generated in Asia Pacific.
Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA.