Employers holding on to skilled staff

By ESTELLE SARNEY

Noticed your boss being particularly nice to you lately? If you're a worker with skills, he should be. Right now you're his most valuable asset, and becoming rarer. New Zealand's labour market is in the grip of a skills shortage.

There might be more new immigrants taking up jobs at your company, and older, experienced people laid off in 1990s restructuring being brought back into the fold.

If your boss fobbed off your request for a pay rise last year, he'd be mad not to give you one this year: you could easily take your skills elsewhere.

He may also be pushing you to do industry training courses to improve your skills, enabling him to promote you to positions he's having a hard time filling from outside.

If you're at high school or university, companies and industry training organisations might be encouraging you to do work experience so they can check you out.

Thirty nine per cent of firms reported increased difficulty in finding skilled labour in the December 2002 quarter, according to the Quarterly Survey of Business Opinion done by the Institute of Economic Research. One in six companies said the labour shortage was the main constraint on expansion - the tightest it's been since 1975."

Patrick Conway, manager of the Labour Department's labour market and skills monitoring group, says the shortage has arisen from New Zealand's strong economic growth.

Lower wages and a deregulated labour force have helped unemployment fall to a 15-year-low of 4.9 per cent. The proportion of the working age population in work is 66.3 per cent, close to a 17-year-high.

"This indicates that many of the people displaced during the restructurings of the 80s and 90s have been reabsorbed into the labour market," says Council of Trade Unions economist Peter Conway.

Adds Alasdair Thompson, chief executive of the northern branch of the Employers and Manufacturers Association: "Employers are now hanging on to their skilled, older employees much longer. I've visited factories where the average age of workers is 56. The employer dreads them leaving because he simply can't replace them."

The labour participation figure includes women who left the workforce to have a family, but are now active again on a full or part-time basis. TMP Auckland general manager Greg Thompson says the "modern response" to accessing skills of women with children is to set them up at home with all the technology to work remotely: most employers are still reluctant to subsidise childcare costs. "But if it gets to the point where they absolutely have to, then they'll look at it."

It might seem curious that wages have not risen sharply with labour demand - they actually fell to 2.1 per cent in the year to December from a five-year high of 2.2 per cent in the year to September 2002. But Patrick Conway says there is usually a lag of about a year between labour demand and wage growth, because wage adjustments are infrequent.

Still, of the wage increases, nearly one-third were to retain or attract staff, according to Statistics New Zealand's Labour Cost Index.

Thompson says pay packages are improving in technology, accounting, finance, legal, human resources and professional services - law, accountancy and the like. They might include options of flexible work hours and the ability to buy extra leave to meet calls for a better work-life balance.

"People's workloads are probably a lot heavier than they were a year ago, so packages need to be enticing," says Thompson. "Sometimes it just requires a title change to retain someone - if the employer knows how to pander to a worker's ego."

Everyone spoken to for this story sees immigration as a key component in meeting the need for skilled workers. But the CTU's Conway cautions that bosses need to settle immigrant workers into their workplaces in a way that promotes cohesiveness.

"There also has to be a balance between bringing in immigrants, and investing in the skills of people already here," he says.

The number of workers involved in industry training grew from nearly 50,000 in 1999 to 83,456 by last December. Forward-thinking companies like Cryovac Sealed Air Corporation in Hamilton get sixth and seventh formers in for a couple of weeks work experience and, if they measure up, offer a job with on-site training for industry qualifications.

That's a rare approach, though. TMP's Thompson says bosses still want qualifications and experience ahead of youthful enthusiasm.