Industries urged to tap into the domestic workforce to prevent a talent drought
New Zealand's manufacturing and engineering sectors are at risk of a shortage of 40,000 workers by 2028, according to a new report. The research revealed that the critical skills shortage in certain sectors will widen by 38% if COVID-related disruptions, immigration policy settings, and constraints on supply chains and international labour market remain unchecked.
Phil Alexander-Crawford, chief executive of Hanga-Aro-Rau, said the pandemic showed how these industries need to reduce their "long-term reliance" on migrant labour to remain sustainable.
"Historically, around a quarter of skilled labour needs in manufacturing and engineering are met by migrants," he said. "By 2028, we will need 463,000 workers in key regions around the country. However, based on current trends, a skills shortfall of over 40,000 is set to constrain future manufacturing output."
The study revealed that increasing the participation rate of underrepresented groups in the sectors, including women and disabled workers, will be essential in reducing the skills shortfall. However, it also found lower participation rates of Māori and Pacific peoples in the workforce, who are also expected to see the "highest population growth of any ethnicity over the next six years."
The pandemic also impacted the intergenerational learning preferred by Māori and Pacific peoples, according to Alexander-Crawford, which passes down knowledge to younger workers in the workplace.
"When this link is broken and an individual leaves the industry, the impact on the sector can be far more widespread, reducing the pool of potential workers from future generations," Alexander-Crawford said. "We need to begin work immediately to reduce barriers preventing the development of an equitable domestic workforce."
He pointed out three key pathways to open the industries for workers, including attracting more through training or from other industries, upskilling the current workforce, and increasing productivity.
"New initiatives which reinforce the attractiveness of the sector and increase workforce participation in training are needed to reduce the skilled labour shortage - particularly within key demographics such as Māori, Pacific, disabled people, and females, who are underrepresented in these industries," Alexander-Crawford said.
Dieter Adam, NZ Manufacturers and Exporters Association CEO, noted that there is already "increasing interest in upskilling" staff, but more emphasis is needed to break down training barriers for underrepresented groups.
"The sector is also going to need to look at how it can incorporate more flexibility into what are usually rigidly defined operating times for shifts - in order to attract more female and younger workers," Adam said.
Across New Zealand, businesses have been struggling to find solutions to talent shortages in the workplace. The government recently announced it is welcoming 3,000 overseas employees more as it increased the limit of its Recognised Seasonal Employer (RSE) Scheme.
"The additional 3,000 places is a 19% increase on the previous season and acknowledges the industry's current needs based on strong growth, and the lower number of working holiday makers onshore right now," said Immigration Minister Michael Wood.