A survey by the Employers and Manufacturing Association revealed 90 per cent are finding it difficult to fill vacancies, with a third having unfilled positions for more than six months. Photo / Warren Buckland, File
A survey by the Employers and Manufacturing Association revealed 90 per cent are finding it difficult to fill vacancies, with a third having unfilled positions for more than six months. Photo / Warren Buckland, File
Opinion
EDITORIAL
The Warehouse, Xero, Sky TV and Auckland City are just a few of the organisations that have announced plans for significant restructuring and job cuts in the past weeks.
It seems the knives are being sharpened in anticipation of an economic slowdown and a possible recession later this year.
Illustration / Rod Emmerson
Yet, perversely, we remain in the thick of a labour shortage.
Unemployment is still at a record low and employers are still struggling to find staff.
A survey of more than 500 businesses by the Employers and Manufacturing Association revealed this week that 90 per cent are finding it difficult to fill vacancies, and nearly a third have had roles in the market for more than six months.
We appear to be experiencing an extreme overlap of economic cycles.
The Reserve Bank is currently hiking rates to remove demand from the economy - which has been described by some as “engineering a recession”.
Reserve Bank Governor Adrian Orr speaking to media following the release of the February 2023 Monetary Policy Statement. Photo / Jed Bradley, File
It currently forecasts unemployment will rise to 5.1 per cent by March 2024 and peak at 5.7 per cent by March 2025.
That would still be relatively low by historic standards. But, as with interest rate rises, the historic levels don’t mean much when people are confronted with a sudden shift in the trend.
For many, the fallout as corporates position themselves for tough times will be life-changing
But, as it happens, a higher unemployment rate might not translate to a quick fix for businesses struggling to find skilled workers.
The issue is likely to be a mismatch between the type of workers needed and those facing job cuts.
Specialised, skilled workers look set to remain in demand as will workers at the less skilled lower-waged end of the market.
Some 71 per cent of respondents in the EMA survey said highly skilled jobs were the hardest to fill and most pointed to struggles getting migrant workers as key problems.
Net migration numbers are rebounding - back at an annual gain of 33,200 for the year to January.
But tighter immigration policy settings mean an influx of low-skilled workers is unlikely to ease issues for the retail and hospitality sector.
Meanwhile, attracting highly skilled migrants is being hampered by competition from other economies such as Canada and Australia, also hunting for workers.
That could pose risks for many middle-class (so-called white-collar workers) as companies cut back on corporate support staff in roles such as human resources, marketing, communications and IT.
Hopefully, there is still enough demand in the labour market for motivated workers to find new positions but it may mean some will need to adapt, re-train or consider a wider range of job options.
It is probably a stretch to expect professional workers to head to Hawke’s Bay to rebuild roads and bridges.
The reality is that we will see people caught in the crossfire of the war on inflation over the coming months.
When economists talk about “putting slack in the labour market’ this is what it means - real lives turned upside down.
