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Home / Business / Economy / Employment

The Great Resignation 'tidal wave' hits NZ - what it means for workers

Cameron Smith
By Cameron Smith
Online Business Editor·NZ Herald·
13 Jun, 2022 05:41 PM5 mins to read

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Hospitality was the hardest hit, with 94.2 per cent turnover. Photo / 123rf

Hospitality was the hardest hit, with 94.2 per cent turnover. Photo / 123rf

Bargaining power is increasingly shifting towards employees as high staff turnover forces companies to get creative with remuneration.

New data shows between April 1, 2021, and March 31, 2022, staff turnover increased to 58.2 per cent nationally, up 10 per cent from 2020 to 2021.

Human resources platform MyHR released its Salary and Employment Report 2022 - a snapshot of more than 1,250 companies and 27,000 employees in New Zealand - revealing numbers one expert called "crazy" but not surprising.

"Those numbers really do show the 'Great Resignation' as a tidal wave has crashed on the shores of Aotearoa," said Jarrod Haar, Professor of Human Resource Management at AUT.

"That's a decent snapshot. That's half the workforce churning over."

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The hospitality sector was the hardest hit, with 94.2 per cent turnover (up 17.4 per cent), while healthcare was up almost 20 per cent to 50.5 per cent turnover, according to the report.

"That healthcare one does worry me a lot," Haar said.

"You hear nurses and builders getting offered $30,000 more to go to Australia."

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Other areas that saw significant increases in turnover were information, media and
telecommunications (up 16.4 per cent), education (up 14.7 per cent) and the construction sector (up 13.2 per cent).

MyHR chief executive Jason Ennor said there has been a major shift in the employment market, in part driven by people wanting to try something different and taking a job that will suit their lifestyle better.

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Increased employee turnover results in a busy job market with both challenges and benefits for workers and employers, he said.

"On the one hand workers are facing higher living costs, and many are re-evaluating their priorities in the wake of the pandemic as they look to retain flexible and remote working options, or to change jobs altogether," Ennor said.

"But from a business owner and manager's perspective, there are considerable pressures for businesses as the economy opens back up, including rising inflation, ongoing supply chain issues, addressing skills gaps, and meeting salary expectations."

Ennor said businesses need to be clever and find innovative solutions to combat these current challenges.

The rising cost of living is one of the biggest challenges facing households today with annual inflation at 6.9 per cent - its highest in three decades.

But how to lure or keep staff?

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Ennor said MyHR was seeing businesses being creative with remuneration offerings by appealing to employees' desire for better work-life balance, through to professional development and training opportunities.

Everything from signing bonuses and additional annual and mental health leave to hybrid working and four-day work weeks is on the cards.

One New Zealand law firm - Simpson Grierson - has been reported to be offering staff a $10,000 reward if they find a new lawyer for the firm, who stays on for at least six months.

"I've seen that overseas ... but I haven't seen that here," Haar said.

"I think we will see businesses start to look at whether they could run their businesses differently to how they used to."

He said hybrid working was "a huge one".

While not possible for all, hybrid working didn't cost organisations anything, and there were benefits for both employers and employees, Haar said.

"I think in the future we will see organisations reducing their office footprint and having a bit more working from home as standard ... at least two days a week."

But it was a challenging time for business too, he said.

"There's a lot of businesses hurting.

"If you walk down Queen St there's so many empty shops ... and there's plenty of restaurants and cafes that have gone," he said.

If you work at one of those places, how can you say to your boss you expect a 7 per cent pay increase to keep up with inflation or some incentives, Haar asked?

But Haar had a warning for employees.

"My advice for employees would be 2022 might be the year of the move and the year of the bargain but it won't last.

"It's [the 'Great Resignation'] probably got legs to go a bit longer. But I think by the end of the year ... if history tells us anything, it will go back.

"Then I think employees will find their bargaining power has suddenly evaporated or at least weakened."

Haar said he saw unemployment hitting 4 per cent and then start moving around that.

Show me the money

The MyHR report revealed the leading regions for average salaries were Otago ($70,838), Taranaki ($68,183) and Auckland ($64,650).

The Manawatu-Whanganui region had the lowest average salary at $50,763, followed by Waikato ($51,658).

"That does kind of surprise me that Auckland would come in in third place," Haar said.

Haar said the regions provided an attractive option - with cheaper housing and shorter commute times - for those that could leave a big city like Auckland and remain on similar money in their same profession.

"Auckland is not a cheap place to live, especially in comparison to both those regions, Otago and Taranaki.

"I think some people have reaccessed Auckland and thought too big, too over-crowded, too slow and will be moving to these regions."

Among the highest earning average salaries by industry, administrative and support services led the way ($89,799), followed by financial and insurance services ($88,400) and professional, scientific and technical services ($87,022).

The education and training sector had the lowest average salary at $51,526, followed by accommodation and food services ($51,909) and retail trade ($52,220).

"The squeeze financially is probably more of a driver than an impairment [to change jobs]. I think people on average are willing to kind of take a punt," Haar said.

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