NZ's employment optimism at a six-year high

New Zealand's employment optimism at a six-year high

* Knowledge workers in hot demand

* Attracting and retaining staff becoming a key priority for NZ business in a tight labour market

* Telecommunications sector the most optimistic in its hiring expectations

June 2, 2004 - Overall hiring expectations in New Zealand are at a six-year high with a net +41.7% of employers intending to hire more staff during the next six months, according to the June 2004 Hudson Report: Employment and HR Trends released today.

National Overview

Buoyant hiring expectations, combined with the lowest unemployment rate New Zealand has experienced in 16 years (4.3%), have serious implications for an already tight labour market.

"In particular we're witnessing a strong demand for the knowledge worker, which is likely to translate into wage pressure in the employment market. Skill shortages are becoming more evident and staff retention is becoming a mission-critical issue as replacement costs and downtime can have a major impact on profitability," said Greg Thompson, General Manager New Zealand, at Hudson.

"Employers need to work hard to attract quality talent; however they must also focus on retaining existing talent within the business. We receive feedback from employees that they want regular performance reviews, career planning advice and support, as well as a work-life balance. Unfortunately, initiatives in these areas either don't happen or are in their infancy in New Zealand and it's an area where improvement is needed," said Mr. Thompson.

"Accepted industry figures show that losing a staff member has the equivalent cost of up to four times their salary. Quite simply, it pays to invest in employees. Not only does it develop their skills and careers and boost retention levels, it has a positive impact on the bottom line," he added.

Breakdown by sector shows that employers in the Education sector have the greatest expectation of increasing their contracting/temporary workforce with a net positive effect of 33.3%, followed by Tourism and Hospitality (+22.4%), then Healthcare at 21.0%. Notably, both the Education and Healthcare sectors benefited from the recent government budget announcement.

Industry Overview

The Hudson Report indicates a positive outlook across all industries for the coming six months, with eight of the 14 industries surveyed sitting higher than the national average of +41.7%. These industries included: Telecommunications (74.5%), Information Technology (56.1%), Professional Services (55.4%), Construction/ Property/Engineering (51.1%), Education (45.5%), Transport (45.3%), Retail (43.7%) and Government (43.5%).

Big movers up from the January to June 2004 Hudson Report were: Transport (31.9pp), Professional Services (20.9pp), Wholesale/Distribution (15.9pp), Retail (9.2pp) and Financial Services (9.2pp).

Most increases in hiring expectations for the Telecommunications sector are in the smaller or specialised telecommunications area rather than in the larger operations. Where the large telecommunications companies are anticipating stable employee numbers, the smaller specialised Telecommunication Service Providers and ISPs appear to be enjoying an increased demand due to their niche focus.

By Organisation Size

Small, medium and large organisations all recorded optimistic permanent staffing outlooks. Medium sized organisations (20-200 employees) are the most optimistic in their outlook (+43.9%) and small business hiring expectations (+39.6%) are the highest they've been since July 2001.

Regional Overview

Positive net effects were recorded in all regions surveyed, which is positive news for job seekers. The highest level of optimism recorded was for the Upper North Island (+45.6%), followed by the Lower North Island (+40.5%), and South Island (+30.9%).

Upper North Island

The surge in the Upper North Island optimism is most marked, with the net effect rising 13.4 percentage points (pp) since the last Hudson Report survey.

Of the employers surveyed from the Upper North Island, 52.5% expect to increase staff levels over the coming six months compared with only 6.9% who anticipate a reduction in current staffing levels.

Lower North Island

The Lower North Island employers surveyed are weighted towards Government, Financial Services/Insurance, Professional Services and Information Technology sectors. The Government sector has shown a slight decline decreasing 4.3pp from the previous survey. The outlook for Information Technology looks solid with a net positive effect of 58.7%. The Financial Services/Insurance sector is up 8.2pp and Professional Services is up 37.8pp on the last survey to a net positive effect of 64.9%.

South Island

Of the South Island employers surveyed, a net +30.9% expect to increase staffing levels during the next six months. Most employers (49.1%) anticipate leaving workforce numbers unchanged, reflecting longer employment tenure expected of the South Island. While positive, South Island permanent employment expectations for the coming six months is markedly down in the previous survey (-13.2pp).

The Healthcare sector indicated optimistic hiring expectations for the coming six months with a net positive result of 37.3%. The Professional Services sector remained strong with a net positive effect of 53.3%, with no organisations surveyed indicating they would reduce their permanent workforce in the next six months.

Contracting/Temporary Overview

The majority of employers indicated that they intend to keep their contract and temporary staffing levels constant, although overall, a net 15.4% of organisations said they will be looking to increase their contract and temporary staffing levels during the next six months.

"Due to the shortage of quality candidates, many employers experience difficulty finding the right match for a permanent role so they opt for a temporary solution. In addition, many candidates are selecting contract/temporary positions because there are plenty of opportunities available and it can provide greater flexibility," Mr. Thompson said.

-ENDS-

About the Hudson Report

The Hudson Report is an initiative from Hudson, which replaces what was previously known as the Job Index Survey up until December 2003. Based on nation-wide research, the bi-annual Hudson Report uncovers and analyses the hiring expectations of New Zealand employers, and provides insights into a range of topical human resource issues currently impacting business.

Hudson recruitment processionals personally surveyed 1,848 participants to collect the data which covers the intentions of NZ employers.

The Hudson report combines the expectations of key employment decision-makers from all major industries across the spectrum of organisation sizes.

Core findings are built on the premise that the expectation to increase or decrease net staffing levels represents a significant indicator of employers' optimism for the growth of their organisations - and, as such, are a strong indicator of more general economic growth.

About Hudson:

Hudson (Global Resources & Human Capital Solutions) is a worldwide leader in the provision of specialised recruitment and human resource consulting services.

Through its recruitment division, Hudson Global Resources, and human resource consulting division, Hudson Human Capital Solutions, Hudson works with a variety of employers to attract, select, engage, develop and retain the people they need to succeed. Likewise, Hudson assists job seekers to explore and discover permanent or contract opportunities that utilise their abilities and advance their careers.

Hudson is a division of Hudson Highland Group Inc (NASDAQ: HHGP) one of the world's leading professional recruitment, retained executive search and human capital solution providers. More information about Hudson is available at http://www.hudson.com/

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