By Gareth Vaughan
The labour market remains tight with an official unemployment rate of just 3.3%, and good pay rises for some workers with private sector hourly earnings up 7.1% in the June year, almost matching the highest inflation in 32 years of 7.3%.
It seems as if every business you visit, and every business owner you talk to no matter what industry they're in, is looking for staff. Speaking in the latest episode of interest.co.nz's Of Interest Podcast, Shannon Barlow, the Managing Director of recruitment agency Frog Recruitment, says this does indeed appear the case.
"Definitely finding staff, or retaining talent, is the number one problem for businesses across New Zealand," she says.
In the podcast Barlow talks about which industries are especially feeling the staffing squeeze, where workers are getting 20% to 30% pay rises, the Great Resignation, and how 2021 was the year of wellbeing with businesses recognising the importance of workers' mental health and wellbeing, but in 2022 cash is king.
She also talks about how the Covid-19 pandemic added new factors and supercharged existing factors affecting labour shortages, and how towards the end of last year the balance of power shifted to employees from employers, and whether there's any circuit breaker on the horizon.
"With that shift in the balance of power job seekers are really using the market conditions as a bargaining chip to be able to secure better conditions, definitely including pay. And with increased living costs, I guess a lot of people are in a situation where they can't afford not to do that, and why wouldn't you take that opportunity," Barlow says.
16 Comments
The vast majority of recruiters have no idea in my experience. Their focus is on filling roles and collecting commission. I had a recruiter from Sydney contact me about a position offshore. She guauged my interest, set up the first interview. Communicated with the client about the success of the interview then arranged the 2nd interview. Essentially a go-between. I accepted the role but the T&C, contract, etc was all handled by the client.
The recruiter pocketed 4 months salary for what I estimate was less than 4-5 hours work.
It sounds like it worked out well. What's your problem with that J.C.? If they hadn't have contacted you then you wouldn't have that job now. They will have done more than 4-5 hours work because they would also have been dealing with candidates that didn't get the job plus time and cost to schmooze with companies to allow them to act as agent.
And these wouldn't be the only agents on the lookout.
Multiple agencies (trust me, there are heaps in our major cities) chase a single job opening, especially in higher paying roles. Although every industry may be in a hiring frenzy, recruiters have to do the difficult task of finding skills in a supply-constrained market and convert these before all the others eyeing the sweet commissions.
Recruiters in my domain (stats/data, finance, risk) have themselves worked in the industry and/or have a decent understanding of the jobs in question. That is unlike the in-house recruiters (HR, talent whatever they call themselves) who are often just gatekeepers with poor judgement.
Recruiters in my domain (stats/data, finance, risk) have themselves worked in the industry and/or have a decent understanding of the jobs in question. That is unlike the in-house recruiters (HR, talent whatever they call themselves) who are often just gatekeepers with poor judgement.
I have a special contempt for these people. Satan's little helpers.
It sounds like it worked out well. What's your problem with that J.C.? If they hadn't have contacted you then you wouldn't have that job now.
You have a point, but the recruiter is just selling people. It's a numbers game. The recruiter didn't understand what the role req'd nor really understand my suitability (and most of them don't really understand the industry). F'more, the client was desperate to fill the role. It was not the aptitude of the recruiter that got the person.
It's the same as the commission on a house sale. You're paying for their office staff, their rent, travel, pitches, lunches with candidates, power, IT, phones... and you're paying for all the failed attempts as well as your successful one.
Nobody is going to offer an agency 150/hr to try and land a deal, so the entire cost of doing business gets rolled into a success fee.
On our planet earth – as opposed to the very different planet that economists seem to be on – all markets are rationed. In rationed markets a simple rule applies: the short side principle. It says that whichever quantity of demand or supply is smaller (the ‘short side’) will be transacted (it is the only quantity that can be transacted). Meanwhile, the rest will remain unserved, and thus the short side wields power: the power to pick and choose with whom to do business. 3. Markets are never in equilibrium, thus don’t be fooled by prices, but consider quantities: The short side exerts power.
Jobs in NZ *reduced* by 18,000 (net) between 2022 Q1 and 2022 Q2. Construction saw a reduction of 12,500 jobs, despite that sector only accounting for about 8% of jobs. Hotels and hospo saw a reduction of 10,800 (nearly 1 in 10 jobs gone). Thankfully education is hiring - they added 13,000 jobs.
There might be a simpler explanation. The % of the population that are within the working age bracket is declining:
Interesting chart, the way it heads south after 2010.
NZ: 65.5 of pop is working age (a bit better than OECD average 64.8%).
I thought once I'd write a Sci Fi novel set in a future with precipitous population decline and the remaining humans increasingly looking like the pets of AIs.
Unfortunately it seems reality has beaten me to it. Will have to come up with a new idea, and be quicker about writing it.
Its a demographic issue through really? Boomers retiring and taking their years of working capital with them resulting in a large gap of skills and talent required to be filled and with less people to do so.
Labour shortages that will not be filled with immigration (everyone is trying to pluck from the same countries) and will result in decent pay bumps for incumbent Gen X & Y finally.
I saw somewhere the US was going to peak at 900k jobs available even at 0% unemployment around 2030?
It’s clear in the market right now for a lot of sectors employees have the leverage… jumping ship for $, motor vehicles etc.. those that are growing and or bottom feeders are usually stuck with a bunch of unproductive reprobates! The amazing part I see is the lack of working ethic!?
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