Businesses Are Planning for Growth

Businesses Are Planning for Growth – Sentiment at Highest Level in More than a Year

Business sentiment is at the highest level in more than a year as an increasing number of hiring managers plan to grow their teams, according to the latest Hudson Report Employment and HR Trends.

A net 23.7% of employers across the country intend to increase permanent staff numbers in the second quarter of 2012, up 5.8 percentage points (pp) compared to the previous quarter, and up 3.8pp compared to the same time last year. In the South Island, hiring intentions have increased by a third, contributing to the positive overall trend.

“The balance of our economic indicators appear to be heading in the right direction and the improved hiring intentions reflect this,” says Roman Rogers, Executive General Manager, Hudson New Zealand.

“At 6.3%, unemployment for the December quarter fell by more than economists anticipated, and while employers are keeping one eye on global conditions, many are feeling more confident about conservative growth here in New Zealand.”

More than half of employers (net 53.6%) in the South Island are planning to increase their number of staff this quarter – this is the highest level of sentiment in the region in The Hudson Report’s 12 year history, and 35.4pp higher than the same time last year. It reflects a Canterbury rebuild effort which is finally starting to take shape, despite continued aftershocks and delays. The Canterbury Economic Recovery Authority is positive about the economy, reporting strong trade through the port, good manufacturing figures and record freight movements.

Information technology remains the most buoyant sector across the country, with more than four in 10 employers (net 43.3%) intending to increase staff this quarter.

Construction/property/engineering is steady at a net 36.1%, and there have been increases in sentiment in the financial services/insurance and education sectors, which sit at net 18.2% and 29.1% respectively.

“Sentiment in the lower North Island has increased, and this is interesting in light of the well-publicised public sector reforms,” says Rogers.

“One in five government employers (net 20.1%) has told us that they’re going to increase headcount – there seems to be a drive to get key projects completed before reforms get underway.”

The financial services/insurance sector is also very strong in the lower North Island, with net 39.2% of employers intending to increase headcount, up 28.7pp compared to the previous quarter.

The sentiment of medium-sized businesses (those with 20-200 staff) has lifted 9.4pp to a net 29.0%. The confidence of large businesses (more than 200 staff) has also improved, with a net 21.2% of employers planning to increase staff numbers, 3.9pp higher than the previous quarter.

Hiring intentions in the contracting/temporary workforce have lifted slightly to a net 9.7%, but this still relatively low in the context of the past two years. Sentiment is particularly low in the upper North Island (net -2.4%), but is strong in the construction/property/engineering industry, with one in five (net 20.5%) employers planning on increasing their numbers of contract/temporary staff this quarter.

“Across all industries and regions, there continues to be a demand for top talent,” says Rogers.

“Now, more than ever, pressure is being placed on businesses, and the individuals and teams within them, to be more efficient, to be accountable against measurable targets, and to justify resourcing decisions. These types of employees can demand top rates but increasingly, lifestyle factors and career choices – like experience, diversity and management – are also important bargaining tools.

“As the economy improves, both businesses and employees are feeling confident about becoming more savvy and selective about their decisions – for both parties, it is about return on investment and growth.”

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