A report by Hays Recruitment, published in conjunction with Oxford Economics, reveals New Zealand's talent mismatch between the skills jobseekers possess and those employers want sits at its highest in seven years.
"The demand for highly-skilled professionals in high-skill industries like IT and engineering is rising," says Adam Shapley, Managing Director of Hays New Zealand. "Add the movement of Kiwis back overseas and plans to reduce immigration and employers have a smaller pool of workers to choose from."
Hays Global Skills Index has been produced for seven years, with New Zealand increasing its score to 5.6 on the overall index. Commentary in the report shows that more routine and repetitive job tasks are being automated, while wage pressure exists in high-skill industries.
The Index is calculated through an analysis of equally weighted indicators — education flexibility, labour market flexibility, wage pressure in high-skill industries, labour market participation, talent mismatch, overall wage pressure and wage pressure in high-skill occupations, each scored out of 10 (1 being an extremely low pressure point, 10 being an extremely high pressure point).
"Despite recent concerns over business confidence and immigration, and an increase to the minimum wage, unemployment has fallen and employers continue to add to their teams," says Shapley. "Unfortunately, those available in the labour market do not always possess the skills employers need, adding to the talent mismatch."
He says it can be frustrating for both available jobseekers and employers, advising on the importance of continuous upskilling to remain relevant and employable in the modern, evolving, workplace.
The talent mismatch in New Zealand is seeing potential employees putting pressure on employers for higher wages for jobs in high-skill industries with skills shortages, such as engineering and technology. High-skill occupations, as well as industries, also contribute to skills shortages because people can't be trained quickly to be able to fill positions.
The overall wage pressure score for New Zealand was 6.2, a huge increase from 2.6 the previous year, confirming employee salary expectations are higher than those of employers.
This is almost double the overall wage pressure experienced by employers in the UK. Drilling down to wage pressure in high-skill industries, where New Zealand rated 10.0 against UK's 3.5, the expectation for higher wages is an issue for local employers.
In terms of labour market participation, New Zealand scored 5.4, and with rates already high, slowing growth may put pressure on employers who want to expand. However, New Zealand scored 4.7 on education flexibility, which shows our education system is fairly well equipped to meet labour market needs.
Around the world, the talent mismatch score increased across 48% of the countries participating in the report and comparing with Australia, our cousins across the ditch were shown to have an overall score of 5.7 (NZ at 5.6), and a 5.6 score for talent mismatch (NZ 5.2), a 4.5 score for education flexibility (NZ 4.7) and an overall wage pressure of 5.0 (NZ 6.2), so we're on quite a close alignment.
But, with birth rates falling and life expectancy rising across the globe, combined with population aging, talent mismatch is predicted to accelerate further, the resulting ageing workforce a longer-term trend with potential to disrupt the business landscape dramatically in coming years.
However, New Zealand professionals with the skills that are in demand will be able to take advantage of new opportunities and less competition for jobs in their high-skill industries and occupations.
The current Hays Jobs Report (for July-December 2018) shows financial analysts, site managers, structural engineers and front-end developers as four of the skills sought by the 53 per cent of employers who plan to increase permanent staff levels in the coming 12 months.
It advises capitalising on the skills shortages, upskilling so you have a deep knowledge in a part of your industry that is in high demand, while keeping up with learning across the industry in general as well as seeking opportunities to learn on the job.
Skills shortages and wage pressure on employers are opening them up to offering attractive packages, so consider benefits other than wages that might be important to you — for the right candidate, with a reduction in choice of employees, hiring managers may be more likely to consider other deals to secure your skills.
It's not always win-win for those in demand, though, with some employees in high-skill occupations complaining of high workloads and unreasonable expectations as they struggle to keep up with work that can't be outsourced easily.
To find out more about the Hays Global Skills Index, and see where you could benefit from gaps in the market, go to hays-index.com