Worker shortage still severe despite slowdown - EMA Business Survey

Businesses are still struggling to find staff despite signs that the economy is headed for recession, a new survey by the Employers and Manufacturers Association (EMA) has found.

Ninety per cent of businesses are struggling to fill vacancies, and nearly a third have had roles in the market for more than six months, according to the survey of nearly 550 businesses, from 17 different sectors across a range of business sizes.

Only 12 per cent of respondents did not currently have any vacancies and just 22 per cent of respondents said that the situation in terms of filling vacancies and talent gaps has improved over the last 6 months.

Some 44 per cent said things have worsened.

EMA chief executive Brett O’Riley said the survey results confirmed just how bad things really were for businesses trying to find staff.

Restrictions around the number of work visas had been compounded by an increase in the lack of literacy and numeracy skills in domestic job applicants, he said.

The 2022 survey showed this issue being experienced by 19-22 per cent of employers. It had now doubled to 43-44 per cent.

“When you can’t fill roles through immigration, you look to the domestic market, or to upskill existing staff, but they need a level of proficiency. Poor literacy and numeracy skills will continue to hold people back and disrupt business growth,” O’Riley said.

The areas businesses have already used or are planning to use to combat the current talent shortage were: training and upskilling (71 per cent), immigration (47 per cent), youth engagement and apprenticeships (39 per cent).

Some 71 per cent of respondents said highly skilled jobs were the hardest to fill and 30 per cent of businesses had been advertising for vacancies for over six months.

The main skill that businesses and job applicants were lacking was basic digital skills, a gap highlighted by 72 per cent of respondents.

“These gaps, coupled with a tight immigration system, have become a persistent problem for companies,” O’Riley said.

They were likely to have a significant negative impact on the productivity and growth of businesses and the wellbeing of employees, as well as the overall economy, he said.

Employers were already focusing on upskilling current staff, as well as looking at how to increase their youth engagement/apprenticeship or similar programmes, he said.

But that didn’t resolve the short-term struggle to fill vacancies.

“Almost half the people we surveyed said the skill shortage situation was getting worse, so immigration has to step in to provide some assistance, and also bring in the skilled workers who can help upskill colleagues.”

Latest StatsNZ data shows New Zealand’s net migration gain is returning to positive territory - hitting 33,200 for the year to the end of January.

The rise in numbers comes as borders and travel open and return to normal post-Covid. The Government has also softened its stance on some immigration policies in the past six months in response to the worker shortage, allowing provision for extra workers in sectors with acute shortages like technology, teaching and nursing.

But it has been criticised by employer groups for an ill-timed immigration reset and reacting too slowly to address shortages.

Business NZ-commissioned research published last month showed the skills gaps were likely to worsen in the long term due to the ageing population.

Higher workforce participation was needed along with long-term migration, it said.

That report concluded that without migration, by 2048 there would be shortages in education, engineering and healthcare, with overall worker numbers shrinking from the early 2030s.

Brett O'Riley. Photo / Supplied

“When you’re looking for staff and facing a complex visa process for overseas talent, education issues with local talent, and a tight labour market, what do you do? That’s the question we’ve continued to put to the Government,” O’Riley said.

While most businesses found they could navigate the migrant visa process, many still found it difficult, O’Riley said.

The EMA would continue to work with the Government to find an answer that balanced all the various factors, he said.

Forty-seven per cent of businesses said they were looking to hire skilled migrants, and while the majority were open to any nationality, others are specifically targeting the Philippines, South Asia (India), Southern Africa, and the UK.

The EMA Skills Shortage Survey 2023 is conducted by the Employers and Manufacturers Association (EMA) in partnership with Malcolm Pacific Immigration.

It is just the second time it has been conducted, the first time being in May 2022.