‘Staff wanted urgently’ is becoming an increasingly familiar line on job advertisements. It’s a sign of the times as NZ continues to grapple with labour shortages.
According to the latest Business NZ Network survey, 87% of employers found it difficult to fill staff vacancies over the last year, while 53% found it hard to find or retain workers.
Although the New Zealand Government has lifted immigration restrictions and COVID-19 restrictions have eased, the labour market remains stretched – and the Reserve Bank predicts these shortages will continue for some time.
Why does NZ have a labour shortage?
The effects of the pandemic have seen acute shortages for both skilled and unskilled labour, according to the OECD.
Many businesses have had to reduce staff during the pandemic due to forced closures and increasing costs. Now it can be difficult to get them back.
Employees are also re-evaluating their work-life balance. With a popular trend of re-evaluating jobs and careers – dubbed the Great Resignation– more Kiwis are contemplating moving overseas or looking for job alternatives.
Meanwhile, with borders opening, we are seeing what has been called a “brain drain” with skilled New Zealanders leaving the country for greener pastures.
Plus, employment numbers are the highest they’ve been in decades, according to Stats NZ. The Reserve Bank estimates there are now two job vacancies for every unemployed person.
In many ways it’s good news – but this has left a big hole in the NZ labour market.
“Although the New Zealand Government has lifted immigration restrictions and COVID restrictions have eased, the labour market remains stretched ”
How might the labour shortage affect small businesses?
Small businesses are feeling it. Only 31% of small business leaders are optimistic about the future, according to a Perceptive-2Degrees survey. Many owners cited acute staff shortages and rising costs making them pessimistic about the ability to carry on.
So, what can NZ businesses do about combating the labour shortages?
Throwing money at employees and potential employees may not be enough in our new world. And with inflation on the rise, so are salaries and wages.
It doesn’t mean salary increases aren’t attractive. A survey by Employment Hero’s shows that 55 % of NZ employees want their salary to increase. While this may be difficult for some small businesses to sustain, an annual bonus could be an attractive option. This same survey shows that 21 % employees value a bonus.
What do employees care about in the workplace?
You may be surprised to learn that salary didn’t even make the top six in TradeMe’s Job Hunter Survey, which asked workers what they considered was important in their ideal role.
The most important workplace factors were:
- Job security: 58%.
- Work/life balance: 57%.
- Feeling valued: 54%.
- Development opportunities: 49%.
- Finding a company that’s a ‘good fit’: 49%.
- Their day-to-day duties: 48%.
The stress and uncertainty of the last few years have also had a major impact on how employees view their employers, their jobs, and careers. Now staff are looking to their employers to show empathy and create a positive workplace. They want employers to be aware of their physical and emotional well-being and give them a sense of purpose and meaning to their work.
How you may be able to attract and retain staff
One way to attract and retain staff could be to try to accommodate employees concerns about their work-life balance. Work individually with them to tailor a work routine that suits both you and your employee. Be kind, be flexible, and listen.
Employees or potential employees also want to know they have a future in what has become an uncertain world.
Show them there’s a path to grow and develop in your business. Being a small business is an excellent opening for you to attract and retain staff, giving them opportunities to grow by exposing them to every aspect of your business and taking up new roles.
Through Microsoft’s latest Work Trend Index, two-thirds of surveyed Australian workers said a lack of growth opportunities at their company meant they were unlikely to stay there for long.
Having staff work from home can give staff a feeling of flexibility. A Melbourne Institute survey found 89% of employees working from home during the pandemic would like to continue doing at least part of their job remotely going forward. However, Microsoft's annual study found one in three NZ employers want employees back in the office fulltime, next year.
Moving with the times will put you in a better place to beat the labour shortage. So, how about turning your business into a hybrid workplace? You could allow your employees to work either remotely or from the office.
It’s worthwhile for even small businesses to change their model and give their employees the chance to choose what works for them.
Check out our Well Covered blog about hybrid workplaces for more tips on this.
Do you have the right cover?
If you’re thinking of introducing hybrid working – or implementing other workplace changes – make sure to speak with your broker about the cover and business protection your business needs.
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