Labour market 'tight as a drum': How to find the right people at the right price

It’s no secret that Kiwi employers are experiencing one of the most severe talent and labour shortages in our country’s history. A press release from Kiwibank earlier this month called the labour market “tight as a drum” and cited “finding the right staff at a reasonable cost” the biggest constraint for many Kiwi businesses.

The latest labour market report showed that unemployment was at a near all-time low of 3.3% and the under-utilisation rate dropped to 9%, another near all-time low. The participation rate jumped to a new high of 71.7%, a rise Kiwibank suggests means that firms are taking anyone they can get.

“The challenges of COVID-19 and the talent shortage combined has put pressure on our labour market,” said Annie Brown, chief people officer at Trade Me. “It’s no secret that it’s a challenging time for businesses to find talent in a very hot market.”

Despite Working Holiday Visas being open for applications for some time now, Immigration New Zealand (INZ) is operating with far less staff than it requires, causing huge delays in visa processing. When HRD spoke with Roman Lee-Lo, at The Rees about the labour shortage in Queenstown, he said they were waiting on 30 visa applications – mostly from July, August, and September. The luxury hotel had been given little indication of when the visas would be processed, meaning while the positions remain unfilled the hotel is forced to run at diminished capacity.

“We understand that INZ is under the pump in the same way that we are with regards staff, but the uptake of working holiday visas is very slow,” Lee-lo said.

Trade Me’s Annie Brown added that they typically employ a number of people on work visas.

“However, as a result of COVID-19 and the changes to immigration, it’s become more challenging to get talent from overseas,” she told HRD.

Brown also said that a flow-on effect from the talent shortage is a huge strain put on current employee wellbeing resulting in increased wellbeing support – something that data from Statistics New Zealand backs up. In the first quarter of 2022, SNZ reported a five-year record for employees who were away from work for a full week because of sickness or injury. The other flow-on effect, Brown  said, was “the cost for great talent was at a premium.” Statistics NZ puts wage inflation at 3%, up from 2.6% in the previous quarter.

“Remuneration is critical in this market. We’ve invested in ensuring our pay and overall remuneration package is competitive,” Brown said.

In mid-2022, Trade Me made the news when they announced they were increasing the base salary of every single permanent employee by $3,500, in order to recognise the impacts that inflation and the rising cost of living were having on their workforce. Despite the immense challenges in the market, Brown said that Trade Me had worked hard to ensure they remain competitive, and have continued to attract some amazing talent to the company.

“To combat these challenges, our people team is focussed on attraction and retention. We’re proud of our offering and work hard to ensure we remain competitive in the current market. We’ve made sure our employee value proposition is transparent, engaging and demonstrates the awesome culture we’ve long been known for,” Brown said.