New report provides further evidence of critical worker shortage
It looks like "The Great Resignation" has not yet reached New Zealand, according to a finding from a report, as the country enjoys "record-high" labour force participation.
"The Great Resignation" is defined as an ongoing economic trend where employees are voluntarily leaving their jobs en masse. The phenomenon has already made an impact in the United States, but the new "Labour Market Conditions for Business" report by Sense Partners for BusinessNZ said it has not yet affected New Zealand.
"No great resignation in New Zealand yet," claimed the report. "In New Zealand, labour force participation is at a record high."
The report differentiated the situation in the US and New Zealand, where labour force participation fell sharply in the US during the early stages of the pandemic. It explained that US saw an "unusually high" number of workers leaving their jobs, which increased from 3.5% pre-pandemic to around four per cent now, eventually leading to what is now known as "The Great Resignation" phenomenon.
"In New Zealand, our exits from work have been lower than pre-pandemic rates and lower than those observed in places like the US," the report said. "We should not confuse overseas (particularly US) labour market narratives for a local one. There is no big pool of available but unwilling workers as in those places."
This claim from the report is supported by its other findings, which said that New Zealand's labour market is at record strength, one of the strongest compared to members of the Organisation for Economic Co-operation and Development (OECD).
"Employment in New Zealand has surged to a record high, in absolute numbers and relative to the working age population. Compared with selected OECD countries, NZ has one of the strongest labour markets," it said.
It attributed this accomplishment to the "extraordinary" monetary funds and fiscal stimulus, especially on wage subsidy, that prevented mass layoffs and business closures. Such measures also helped promote strong economic and employment growth outside lockdowns, added the report.
Read more: The Great Resignation is coming for New Zealand – here's how to mitigate it
Meanwhile, the report also revealed how critical staff shortages are slowing down the economy.
"Employment is at a record high and as a result hiring more people is the hardest on record," read the report. "There aren't enough people who aren't in a job and looking or available for work, and often there are mismatches in skills and location."
"Job ads are 33% higher than before the pandemic. Vacancies are widespread across regions, industries, and income bands," it added.
BusinessNZ chief executive Kirk Hope said the report substantiate what they have been hearing from businesses since the pandemic began.
"With borders now opening up, we also risk a net outflow of workers from New Zealand and an even bigger skills shortage crisis if we don't get immigration settings right," Hope said in a statement. "The report says the situation will remain critical for at least two years, so it is important that any immigration reset does not deter critical workers from coming to New Zealand in the short term."
According to the executive, the report will be sent to Workplace Relations and Safety Minister Michael Wood, along with a request for a reset on immigration policy.
"BusinessNZ favours a simple, easy to understand and permissive immigration policy that supports economic growth. New Zealand needs immigration at all skill levels, and we need to welcome migrants back to New Zealand and acknowledge the contribution they make to the economy and our communities," Hope said.
