Cost of living: Tauranga job market hit by high rents, unaffordable houses in competition for staff

Harbourside Restaurant owner Peter Ward is desperately looking for staff. Photo / Andrew Warner

The cost of living crisis is hitting the employment market with the high cost of housing in Tauranga deterring people from taking jobs in the city, employers say.

A recent business survey revealed housing affordability and availability were the main barriers to recruitment - in one case a worker endured a year-long struggle to find a suitable home for his family after moving from Auckland. Employers are also increasingly looking overseas to fill positions after struggling to attract suitable candidates.

In the year to December, the cost of living increased by 8.2 per cent, while the net average wage rose by 6.24 per cent. Mortgage rates are rising and Bay of Plenty median rents reached an all-time high of $615 in January and tenants are now more worried about putting food on the table than paying for a roof over their heads.

This week the Herald Price Tracker was launched online, providing data about different items and the average living costs of different households in New Zealand.

Harkin Roofing director Deborah Harkin said the job market was competitive, with top roofing companies fighting for the same few people.

“We do get new people coming into town but the rental market is also tricky in Tauranga.

“We had one staff member move from Auckland, but it took him a year to be able to move his family due to not being able to find a suitable house.”

The company brought in skilled roofers from the Philippines after struggling to fill positions. “We are very happy with their skill level and their hard work ethic.”

Bay Sandblasting Services had also started employing from overseas. Finance manager Michele Henderson said the company was seeking yardmen and blaster painters.

“We have got Fijians, Filipinos and people from Bangladesh. Everybody you talk to is saying the same thing because the good Kiwis are employed. It’s really hard.”

Bay Sandblasting had tackled the housing shortage head-on by renting a house to accommodate workers.

The company also relied on backpacker accommodation but that was proving difficult as most were full and were charging $245 a week with four to a room, she said.

Tauranga Business Chamber chief executive Matt Cowley said a straw poll of members this month showed 17 per cent identified staff shortages, retention and affordability as main business risks.

Housing availability and affordability was still the biggest barrier to attracting candidates while rising rents meant staff were asking for higher wages.

“We’re competing against other cities where housing is more affordable and it’s easier to get around and there are more things to do than go to the beach.”

Harbourside Restaurant owner Peter Ward said the labour shortage was “dire” despite figures showing the average salary in the city for the last quarter jumped 5 per cent year-on-year to $68,438. Hospitality and tourism experienced the biggest jump of 9 per cent.

Harbourside had been advertising for months for chefs and front-of-house staff but struggled to attract applicants.

The business was trading six days a week due to staff shortages.

“We are really struggling to keep those days going with the staff levels we have got because everyone is doing extra shifts and that can’t go on forever.”

The few chefs he had interviewed were seeking high hourly rates. “They know the ball’s in their court.”

Jess Luxton, from Jack Dusty’s Ale House, said the bar was looking for a chef and it had “been slim pickings”.

“People are also able to dictate their price because there is such a shortage. We are constantly looking for bar staff.”

Restaurant Association chief executive Marisa Bidois said Bay of Plenty employee numbers remained static for the sector between 2021 and 2022 despite the number of outlets growing by 5.4 per cent.

Marisa Bidois, CEO of the Restaurant Association. Photo / supplied

Skills shortages typically resulted in owners working long hours, reduction of opening times, and stretched services, she said.

Most employers (78 per cent) were providing free meals and almost a third were providing bonuses.

‘We have so much work on and are so short-staffed’

Stewart Construction owner Brent Stewart said the company needed four carpenters and a third or fourth-year apprentice.

The company was experiencing high workloads, which he put down to dealing with the top end of the residential market.

The attributes he was looking for in candidates were “hobbies outside of building and people that keep their room tidy”.

“We’re about unity and client design. When you get this right, ultimately jobs become more affordable.”

Sam Arundel, from the Drainage Department, started as a one-man band with one digger in 2018 and had experienced “big business growth”. The company had six employees and was looking for experienced and licensed drain layers.

“We do really take a long-term view, so we hire slow and really make sure the person will be a good fit.”

‘The market is tight, higher pay and extra benefits’

Ryan and Alexander recruitment company executive consultant Liz Kennedy said the job market had slowed in March after a busy start to the year but there was still a limited number of suitable candidates.

Technical roles including engineering, planners or senior finance, marketing and communications were hard to fill due to the skill set required.

One Staff area manager Nathan Lewis said it had seen significant growth in international workers in Tauranga, mainly looking for short-term work, and a slight increase in trainee positions.

The hardest positions to fill were marine engineers, diesel mechanics and maintenance planners while truck drivers were in demand.

“Although we do have these workers in Tauranga, their current employers also know the market is tight and are offering higher pay and extra benefits to secure their workers.”

The most sought-after jobs were those jobs that required minimal skills.

Trade Me’s latest data shows the average salary in the Tauranga district was $68,438 in Q4 last year up 5 per cent year-on-year while there was a 17 per cent drop in job listings and job applications soared by 53 per cent.

Hospitality and tourism average salaries jumped by 9 per cent to $58,994, engineering 8 per cent to $87,571, transport and logistics 7 per cent to $62,402, manufacturing and operations 7 per cent to $60,073 and legal 6 per cent to $91,607.

Trade Me Jobs spokesman Matt Tolich. Photo / Supplied

Trade Me jobs sales director Matt Tolich said it was still a competitive market but, with applications on the rise, it was a good time to be looking for talent.

Priority One workforce and policy general manager Greg Simmonds said Tauranga’s job market remained tight across major industry sectors.

The Tauranga Western Bay employment market grew by 3.7 per cent, compared with 3 per cent nationally last year.

Tourism Bay of Plenty general manager Oscar Nathan said hospitality was an essential part of the visitor economy and it had been facing a deeper and more prolonged period of staff shortages than other tourism businesses in its coastal region.

Some local accommodation providers were struggling to fill some roles, such as housekeeping, while the commercial driver shortage had been seriously impacting some tour and visitor transport services, he said.