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Skills Shortage Tilts Balance Of Power To Younger Workers

New Zealand's growing skills shortage due to Covid-19 imposed restrictions on immigration will force companies to suck up the risks associated with upskilling far more junior employees.

"As we are already seeing with clients in the hospitality, building and professional services sectors, younger Kiwis are going to find themselves confronting a sharp learning curve with the need to take on more responsibility sooner," says Vinay Iswar, managing director of BetterCo Advisory and Accounting firm.

"One of our restaurant clients in Auckland had a head chef lined up but weren't able to get him into the country. As a result, they had to upskill a more junior staff member to take over the role. We are going to see more of that because I don't see anything changing for at least another couple of years."

Iswar believes the skills market is becoming far more competitive with the balance of power shifting to workers.

"Employers will need to be proactive. For example, to attract good people, they will need to do things like charting a career path for a candidate, giving them more responsibility sooner and showing greater flexibility in accommodating their home and family needs – higher salaries are a given.

"Businesses will also need to revamp their operating models in some circumstances. For example, a restaurant client of our firm had to re-design their menu due to skills and training challenges," Iswar says.

Many employers, particularly SMEs, have traditionally been reluctant to invest in training staff because they leave and take their new skills to somebody else.

"It has just happened to our firm, but we have no choice – we have to take the risk and invest in upskilling people."

He offers the following advice to companies for whom skills are becoming an issue:

1. Be more human

Iswar says leaders are going to have to up their game on employee engagement and relationship building.

"It's going to take more one-on-one, informal time. Get to know your people, understand their challenges and get more flexible when it comes to accommodating their needs and aspirations."

2. Invest in training younger

"Seriously consider younger people for training and greater responsibility. Only by investing in our younger people at the micro-level will we make things better for everybody. They may leave and go elsewhere, but if you make yourself a more outstanding employer to work for, they will likely stay.

"Training and restructuring your business to be more flexible will cost time and money and cut into profits, but it is necessary for long term success," says Iswar.

3. Partner with other companies

Collaborate with companies similar to your own to achieve economies of scale on training resources, costs, time and labour.

"Two local building companies I know, one big one small, have worked out a solution whereby a skilled employee in the bigger company is training a younger employee in the smaller company," Iswar say. "The smaller company pays for the service, and the skilled employee in the larger company gets teaching experience."

Iswar believes Government needs to step up in helping SMEs address their skills needs.

"Government support and compensation will encourage SMEs to get proactive in addressing the skills shortage sooner – it's inevitable, but the earlier we get going, the better."

For more information: https://www.betterco.nz

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