More than 4000 of Rotorua's working population are now on the jobseeker benefit and a recruitment agent says locals might need to relocate to find work.
This equates to 8 per cent of the city hit by the loss of international visitors.
A total of 4032 people were on the work-ready jobseeker support in September, Ministry of Social Development (MSD) data shows.
This was up from 2701 at the same time last year, and the city had the highest number of beneficiaries in the Bay of Plenty.
It spiked between March and April, when the number of people on the benefit jumped by nearly 600 to 3566, and again by nearly 300 from July to September.
MSD says it had moved 510 people in Rotorua from the benefit to jobs in the past three months, as there were 886 job vacancies across the region in a variety of roles from administration to horticulture.
The Rotorua figures mirror what is happening across the region. The number of people on the jobseeker benefit rose more than 41.8 per cent in the Bay of Plenty from 14,404 to 20,434 in the year to September.
This was the third-highest number of people on the jobseeker benefit in the country; 9.3 per cent of the working and able population needed financial support.
Taupō district was statistically the worst hit; the number of people on the benefit there doubled to just over 900.
Lakes District Health Board member and Whānau Ora chairwoman Merepeka Raukawa-Tait believed the number of unemployed was likely higher in Rotorua as many lost their jobs but did not qualify for the benefit as their partner worked.
"Families living on a benefit survive, but by the time you deduct their rental payments and other living costs, they are hardly thriving ... and it's going to get tougher."
The horticulture industry, in particular, has relied on seasonal immigrant workers, who often accepted a minimum wage, she said, "let alone a living wage".
She said planning long term was crucial, and it couldn't all be left up to the Government. All opportunities for further education, training, and employment needed to be explored.
"We must move as many families as possible from welfare to wellbeing."
Trade Staff's Central North Island manager Geoff Campbell echoed the need to upskill, saying there was a skill shortage in the construction and industrial sector.
"The industrial sector is still going fairly strongly ... if you come from a tourism background, it doesn't transfer well into a construction site."
Bay of Plenty and Waikato 1st Call Recruitment general manager Ange Singleton said people might need to consider relocating, as the Waikato region had triple the amount of available jobs than the Bay of Plenty at the moment.
"In Rotorua, we are seeing a spike in requests from national clients working on major projects so there are also opportunities within construction and civils in Rotorua/Taupō and we are actively building our workforce there."
She said they were the busiest they had been in 10 years, but some people weren't showing up to interviews.
"Business is flourishing, we want people ... we're looking for people every day."
It was not a matter of a lack of skills, she said, as those who got booked into interviews were someone of interest.
"We have so many jobs across the country that we can't fill because people will not turn up for interviews because they get so much assistance from the Government," she said.
"There is no motivation."
She said they were busiest in manufacturing, civil construction, general labouring, and trades and services and the busy roading season was beginning now until April.
"We have work if people want it. We are always looking for reliable, drug-free people to come work for us."
Last week, New Zealand Kiwifruit Growers Incorporated (NZKGI) chief executive Nikki Johnson told the Rotorua Daily Post 14,500 workers were needed as the industry grew and the border closed.
Rotorua Chamber of Commerce chief executive Bryce Heard said some employers were commenting that young people coming out of the pre-employment system had an "entitlement mentality," making it difficult to employ.
He said recruiting agencies were operating at normal levels but positions were not filling because of skills shortages.
"There is work available for able-bodied people with the right skills and aptitudes."
Heard said the large number of medium-sized motels being used for emergency housing was also attracting unemployed and homeless to Rotorua, distorting the underlying figures.
The city received $270 million of Provincial Growth Fund projects which Heard said had fast-forwarded a significant number of large projects, creating incoming infrastructure and jobs.
MSD's social development regional commissioner Mike Bryant said they were working with Te Arawa Lakes Trust to help connect whānau with jobs.
"Each partnership sees iwi relationship co-ordinators connecting whānau with MSD training and job opportunities."
He said in addition to monitoring the labour market to predict industry needs, the work services team could advertise a vacancy, shortlist and help with the interview process on behalf of employers.
• Anyone looking for employment in the horticulture and viticulture industry can search for employment on the Work the Seasons website.
• MSD latest industry data shows about 1200 people will be needed for the kiwifruit industry.
• Offers a range of contracted employment programmes and support services to facilitate a return to work.
• Employers interested in hiring a client who may need to be upskilled or mentored may qualify for the Flexi-wage subsidy.
• Funding and support is available to candidates who to need industry-specific skills to help with short-term pre-employment or in-work training.
• Those with a disability or a mental health condition can join the one-year Mainstream Employment programme to get paid work experience and a long-term job.