Service sector research highlights looming skills deficit

MEDIA RELEASE: Embargoed until release of the BERL report at 6pm Wednesday 3 May

Service sector research highlights looming skills deficit

A new report on the New Zealand service sector by a leading economic research company warns of potential shortages of skilled workers as the sector undergoes robust growth.

The report by the BERL consultancy says the sector, which already covers 29% of the New Zealand workforce, is estimated to need more than 200,000 extra workers by 2020 as people leave and new jobs are created.

BERL says there is a need for the key stakeholders – government, industry and the relevant industry training organisations (ITOs) – to come together and review strategies for meeting the demand for wellqualified service workers.

The report was launched at a function at Parliament this evening by the Minister of Tertiary Education, Skills and Employment, Hon Paul Goldsmith.

It was commissioned by At Your Service Aotearoa, a collaboration of four ITOs; ServiceIQ, Careerforce, Skills Active Aotearoa, and HITO.

The BERL report says the service sector, covering such industries as aged care, retail, tourism, hospitality, sport and recreation, and personal grooming, has a nationwide workforce of nearly 600,000 fulltime equivalents (FTEs). In the March 2016 year the sector contributed $47.8 billion to GDP, about 22% of the country’s total production of goods and services.

“The service sector is a large and important part of our economy, fostering significant wealth and job opportunities.

“Service sector employees are an expanding and largely unseen army of workers whose labours are often repetitive, demanding and modestly paid. Yet without them our health and safety, and sense of national wellbeing, would be profoundly compromised.”

The report says official forecasts show that service sector job growth will be higher than that for employment nationally. For example, international visitor numbers, which have surpassed 3 million and are forecast to reach 4.5 million by 2022, are fuelling demand for tourismrelated services.

This is positive news but it is creating some concern among industry players about whether the service sector has the appropriate mix of trained and skilled people.

BERL also draws attention to the growing demand for care and support workers as the population ages and the trend for care to move out of hospitals and closer to people’s homes continues.

“New Zealand therefore faces similar challenges to the rest of the OECD, with potential shortages of skilled and unskilled staff in the health and disability sectors, and the need for a cohesive and integrated vocational education system that offers opportunities for school leavers and the existing workforce.”

The report highlights the growing need for welltrained workers in all the industries covered by the At Your Service Aotearoa ITOs.

It notes, for instance, the growth in outdoors and fitness activities, and says the popularity of such pursuits has gained greater impetus from governmentfunded initiatives that encourage physical activity for good health outcomes, and from overseas visitors wanting active holidays.

The need for regular training and a stronger skills base also applies to the hair and beauty industry. While industry research shows that the majority (66%) of salons are small, employing up to five people, “the potential customer base of these salons is broad and growing.”

The report points out that the service sector uses skilled migrants and people on shortterm visas, such as student visas and working holidays, to fill gaps.

This is happening at a time when New Zealand is experiencing issues with young people transitioning from secondary school to work or further education with many falling between the cracks and the mismatching of skilled labour with the demand for that labour, the report says.

PDF of report attached.
BERL_Report_to_At_Your_Service_Aotearoa.pdf

It is also available at aysa.org.nz; careerforce.org.nz; hito.org.nz; serviceiq.org.nz; skillsactive.org.nz

Notes:
• Careerforce is the ITO for the health, aged care, disability, social services, youth work, cleaning and pest management professions.

• HITO is the Hair and Beauty Training ITO.

• ServiceIQ is the ITO for the aviation, hospitality, retail, travel, tourism and museums sectors.

• Skills Active Aotearoa is the ITO for the recreation, sport and exercise industries.

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