The Herald went looking for answers to five tough questions on employment. Here are the responses
QUESTIONS
1. Continued recovery or double dip? What does the next 12 months hold in store?
2. Has the much-talked-about problem of staff engagement decreased or is it still a major issue? What can be done?
3. Has the intensity of the downturn overseas, particularly in Europe, meant that
we now have a more skilled set of candidates to choose from - why, or why not?
4. In which industries are the skills shortages persisting? How is this being addressed by the smart companies?
5. What will happen to salaries over the next 12 months?
Wynnis Armour - director, The Madison Group
1. It's useful to cite US Federal Reserve Chairman Ben Bernanke's observation about the present economic position being "unusually uncertain" ... with very cogent arguments being mounted for both the double dip and the continued recovery scenarios.
The Madison team, however, believe that we have reached a "new normal" that - while not replicating the soaring (yet unsustainable) financial metrics of 2008 - certainly indicates a market that is emerging from the economic shocks associated with the GFC. There is a cautious optimism about the long-term activity in the market.
2. Staff engagement has always been - and will continue to be - an issue that management must be constantly cognisant of. Surveys show staff want to feel valued, to be offered development opportunities and want to feel fulfilled at work.
They also want some acknowledgment and recognition of the pain that many felt as businesses downsized and cut conditions last year. A business with a short memory will pay the cost with higher-than-anticipated staff churn. However, there is a normal "engagement cycle" continuing to develop in the marketplace - with an associated acceptance and, indeed, expectation of regular role and workplace change within the employees' working lives.
3. Six months ago we enjoyed the availability of skilled candidates who saw New Zealand as a destination that offered opportunities more attractive than those experienced in the "home" markets - most noticeably the UK.
We have noticed a change in this situation in the last few months - we have had anecdotal reports of the freeing up of contract roles in the UK and of the resumed payment of the bonuses associated with the excesses of 2008 (especially in the finance sector) - and suspect this is impacting on the number of would-be candidates. The New Zealand salaries continue to lag behind those offered by many of the developed economies overseas, representing a "roadblock" for us.
4. We have noticed a rapidly developing skills shortage in almost all categories (but in particular the IT, health and engineering sectors).
Innovative candidate attraction strategies, effective overseas reach and a robust, dynamic candidate database become all-important at this stage of the economic cycle. As professional recruiters we are finding many businesses are turning to us for support as they recognise it's becoming increasingly hard to find that "right" person with the required skill sets themselves.
5. Employers will need to respond thoughtfully to the wage increase requests over the next 12 months. The skills shortage will reflect a "supply and demand" scenario with an associated real and perceived increase in value of those with hard-to-source skills. Wages will inevitably increase.
There will be a real reluctance by employers, however, to meet these demands as they struggle with significant increased operational costs and a patchy recovery.
Sheryl Green - general manager, Numero/Gaulter Russell
1. We think that the recovery will continue, albeit perhaps a bit slower than first thought. Our clients are not indicating any further staff cuts and are forging ahead with either stable business plans or growth strategies.
2. Staff engagement has always been more positive in companies where employees feel respected, valued and rewarded. If employers want to keep good staff the onus is on them to ensure staff are well treated.
3. No, not at all. We have not seen more than the usual numbers of candidates looking to come to NZ and, as we continue to regularly lose good people to overseas, we will continue to struggle to find skilled workers in our employment market.
4. There are skill shortages in all industries and smart companies have a dual approach to address their skill shortages. First, they have proactive retention practices to ensure they keep their skilled employees. Second,, they develop in-house recruitment capability, or partner with reputable consultancies, to ensure they have the expertise to access various candidate markets as well as identify and attract skilled candidates.
5. Due to the depressed market, salaries have remained reasonably static over the last little while. As the recovery continues and costs rise, GST increases for example, we think employers will be under pressure to increase salaries on current levels
Felicity Stanley - operations manager, Randstad Business Support Division
1. I believe the next 12 months will be more of a "wobble". Some of the civil infrastructure sectors will ramp up as the year goes on but overall businesses are still saying it's tough going. Super City is putting a lot of activity on hold until early next year - this includes projects and movement of candidates.
While businesses are generally a bit anxious, there are signs of increasing confidence as businesses look to attract top talent. The remainder of 2010 is likely to remain sluggish for some industries and businesses with 2011 looking likely to be a year when growth begins to remain consistent.
2. Employers need to regularly remind their employees why it is great to work for their organisation.
* Reiterate your Employee Value Proposition (EVP) and make sure that you deliver on it - this will reconnect your people to the positive elements of your workplace culture and increase engagement
* Work on your culture - consider team-building, learning and development opportunities.
* Set goals with your team to achieve business outcomes. If you can, get ideas from the team about achieving a team milestone, and this will make them feel connected to the goal, the team and the organisation.
* Work on individual development plans - if people can see the next steps for their careers and commitment to invest in them, they are more likely to feel increased engagement.
3. There has been a definite reduction in accounting professionals leaving for the UK and Europe as word has spread there are limited opportunities in this region. This means there is the potential of more skilled accounting and finance professionals in our local market. As the overseas markets begin to gain traction again, there is a danger that the brain drain experienced a few years ago could repeat itself. It's therefore vital that organisations understand the motivations of their employees and provide an environment that will encourage retention, loyalty and engagement and lessen the risk of talent leaving.
4. Experienced and skilled professionals in engineering and construction are still very difficult to find, as talent in this space is being snapped up quickly, or taken on contract. Employers are reverting to attracting skills from overseas for those hard-to-fill roles.
Smart employers are working on:
* Employer branding to ensure they are able to attract and retain the top talent in the market. As these people are a direct link to your customers, you want them to have a positive impression of your brand right from the start. A positive brand makes sales easier and increases your productivity.
* Using headhunting/search techniques for those specialist and more technical roles. Smart employers are also developing employee referral schemes; managing talent pools to map the best people in the market and having regular touch points with them.
* Upskilling existing staff to fill skill gaps.
* Succession planning to ensure the retention of top talent in the organisation.
5. For the highly skilled and experienced technical professionals in construction, property and engineering, we will see salaries get back to 4-8 per cent increases. This time next year, when the market is likely to be in full growth mode, salaries will start to balloon again.
In accounting, salaries will be pushed upward in most areas in the coming 12 months - the amount they will be raised, however, will be limited due to the size of organisations in New Zealand. It's therefore imperative that employers ensure their EVP is robust and provides the work-life balance that most employees are seeking.
Roman Rogers - Hudson
1. The next 12 months are likely to demonstrate modest growth off the back of New Zealand businesses being cautiously optimistic. That said, there are a number of occurrences which, should they play out, will cause New Zealand's economy to double dip. We are still very susceptible to international confidence and a downward spiral could have a detrimental impact on New Zealand. Furthermore, domestically the increase in GST, the degree of predictability regarding the results of the general election and finally (although outside the next 12-month window) the Rugby World Cup result. How Kiwis choose to respond to these three events may well have an impact on the recovery, particularly for organisations that are dependent on consumer confidence.
2. Our most recent research indicates that nearly two-thirds of job seekers are actively or passively seeking a new role. This is accentuated by the fact that job seekers now believe more opportunities exist. The need to have a fulfilling role is more critical and nearly two-thirds of the workforce feel they are working harder without getting the appropriate reward.
During the downturn the pendulum of power swung towards the employer but it is rapidly swinging back. With this in mind, employers need to maintain an accurate perception of their employees' mood, and in particular the elements of the employee experience that drive high engagement. It then rests on the shoulders of the employer to show they have listened and that they are taking action. This will be crucial to all employers as the economy improves.
Generally speaking, however, the employers' commitment to their people's career development and providing new work experiences is currently top of mind for employees.
3. We have not seen an increase of skilled migrants coming into the country or Kiwis coming home.
This is primarily due to international talent feeling more confident in securing roles in their current market when compared with the risk of the unknown, coupled with the financial loss they are likely to experience if they need to sell up. We are starting to see a return of activity from expats looking to come home - however, they still remain cautious and the timelines are uncertain.
4. All industries are starting to experience skill shortages, to a much greater extent than 2009 but still not to the extremes of 2008. The current tightening and availability of skills will continue to be experienced and at an accelerated rate. ICT is leading the charge and this will soon be evident in other parts of the market. The skill shortage will further be exacerbated by employers starting to acknowledge that the blend of skills and attributes required within their business to lift performance is not curable with what was available before the global financial crisis.
The smart companies are stating to define what high performance looks like, how they assess for it and where in the market (both locally and more broadly) these candidates are likely to exist.
Employers must develop a sophisticated Employee Value Proposition in order to differentiate themselves. These companies know they must work harder to demonstrate why people want to work for them.
5. There is no question that remuneration is becoming more important to employees, therefore salaries will increase. A willingness to take a safe role, perhaps at the expense of what employees felt they were worth, is becoming significantly less apparent and those looking for a new role expect to secure an income that makes up for the perceived loss of earnings through the downturn.
However, financial considerations are not the dominant driver - career and learning development opportunities remain the number one priority.
