All change as small-firm jobs increase

By MATHEW DEARNALEY

A leap in the number of New Zealanders employed by small firms points to a risk of greater turbulence at work, say Labour Department ministerial briefing papers.

Jobs in small enterprises of less than five people jumped from 214,200 to 313,800 in the 12 years to 1999.

Over the same period, employment in firms with more than 50 staff fell by an even greater number, from 726,900 to 616,600 people.

The department has told Employment Minister Steve Maharey that work in small firms tends to be more turbulent, with about half of them coming or going in any one year.

This compares with about one in five jobs either disappearing or being created in large firms.

Labour Secretary John Chetwin said excellent employment relations could contribute significantly to economic growth and innovation. Relationships were mainly in good shape in New Zealand, but with room for improvement.

The challenge for the Government was to maintain good conditions to protect more vulnerable workers and encourage greater participation in employment, while also allowing firms enough flexibility to be innovative and create jobs.

It also needed to improve skills to make the most of a shrinking and more culturally diverse working-age population.



Better systems for matching people with jobs are needed, they say, with many skills fast becoming outdated as new technologies and industries emerge.

In the 10 years to 2001, for example, the number of bank officers fell from 21,700 to 12,500, compared with a more than sixfold increase in computer engineers - from 1200 to 8200.

A richer ethnic mix highlights a need for greater inclusiveness at work.

The rate at which new migrants are employed deteriorated from 64 per cent to 46 per cent in the 10 years to 1996, although it has since improved slightly to 50 per cent. This compares with an employment rate of 63.2 per cent for the general working-age population.

Employment among Maori has grown by 26 per cent in the past five years, although a jobless rate of 11.8 per cent to June after a 1 per cent annual fall is still more than twice the general rate of 5.1 per cent.

Meanwhile, the Labour Department says wages have increased by an annual rate of 3.2 per cent in the first two years of the Employment Relations Act, from an average of 3 per cent in each year since 1995, and just 1.9 per cent in the previous five years.