Hudson's latest quarterly survey of employment trends, carried out during the last quarter of 2011, shows hiring intention sentiment in the South Island for the first quarter of this year is at an eight-year high, with a net 40.1 per cent of employers there preparing to increase permanent staff numbers - that's more than double the national average.
Across the rest of New Zealand, a net 18 per cent of employers are planning to increase their net permanent head count by the end of March, which is down 4.6 percentage points (pp) on the last quarter of 2011, and down 6.4pp compared with the first quarter of last year.
Employer confidence among small businesses (fewer than 20 employees) has slipped 16.7pp to a net 16 per cent. Almost three-quarters of these businesses intend to keep their head count steady.
Rogers says too many small companies are overreacting to the banking and economic issues hanging over Europe and are unnecessarily keeping head counts down.
"Given they are small businesses, they are not likely to have a large market share," he says. "So even if our local economy was to dip, their share of the market isn't that great that they would be impacted too much by it.
"Companies only need to worry if they have more than 25 per cent of the market. The businesses that need to be concerned are exporters."
Given recent economic history and employment trends, little in this latest Hudson survey came as a surprise to Rogers: "A lot of it was predictable, although I think a lot of people are looking at Europe and saying, that's why there is this softening of confidence, particularly in the upper North Island region.
"But I think it is a bigger issue than that. When I look at the last two or three years, a lot of New Zealand businesses have come back at the end of 2009-10 saying, 'Roll on next year, it is going to be better.'
"They have hired people, but they haven't got the spark in business activity they thought they would enjoy. Companies are now paying for those mistakes, so the lack of hiring activity today is not just about Europe and the global financial crisis, it is about businesses being over-optimistic about what a new year brings."
During the first quarter of last year, businesses wised up to the fact that getting out of the recession was going to be a slow climb.
"That really put many companies in cruise control for the balance of 2011," he says.
Rogers says nearly two-thirds of the 1220 employers who took part in the firm's survey are planning to hold their staff levels steady.
"We're seeing a strong focus on driving productivity and performance among existing employees, complemented by strategic hires of high-performers," he says.
He expects to see high demand in roles such as project managers in the construction and IT sectors, as well as for customer-facing IT specialists.
Nationally, IT is the most confident sector, with a net sentiment of 43.4 per cent. The telecommunications sector is increasingly buoyant, up 6.4pp to 32.4 per cent this quarter, coinciding with structural changes in some of our biggest organisations, such as the splitting of Telecom into two companies.
The construction, property and engineering industry is the second most confident sector, at a net 36.4 per cent. But sentiment in the financial services and insurance industries has slipped 11.7pp to a net 11.2 per cent following increasingly difficult access for New Zealand banks to offshore debt markets.
The hiring intentions in the manufacturing, education and fast-moving consumer goods sectors are also down on the last quarter of 2011.
On the temporary and contracting front, the report says that after an aggressive year of hiring, employer sentiment in the temporary and contractor workforce has fallen 6.1pp nationally to a net 7.9 per cent.
Employer confidence also slipped year-on-year, down 6.1pp from 14 per cent in January to March last year.
The survey also shows that a fifth (21.6 per cent) of hiring managers intend to increase the number of contractor and temporary employers by the end of March. But this is countered by 13.8 per cent of companies that plan to decrease contract and temporary employee numbers over the same period.
It seems all eyes are on Canterbury. Rogers says that when its estimated $15 billion-$20 billion rebuilding project gets under way, employers will again confront skill shortages.
Key findings
* Employer sentiment has dropped 4.6 per cent, with a net 18 per cent of companies intending to increase permanent staffing levels before the end of the first quarter.
* Hiring intentions are down 6.4 per cent year-on-year compared with January to March 2011.
* Hiring sentiment in the South Island remains the strongest of all regions at 40.1 per cent - 22.1 per cent above net national sentiment. Employer confidence in the region lifted 1.5 per cent.
* Employer confidence in organisations of fewer than 20 people slipped 16.7 per cent to net 16 per cent.
* At a net 78.6 per cent, employer sentiment in construction, property and engineering in the South Island is the highest ever recorded by Hudson.
* 27.5 per cent of all employers plan to increase permanent head count to the end of March 2012, down 3.8 per cent over the quarter.
* Steve Hart is a freelance writer. See SteveHart.co.nz
