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Businesses are struggling to attract staff tempted by less-stressful roles in the booming public sector.
The number of people working for Government departments grew by 11 per cent between 2002 and June last year, to almost 325,000.
In Wellington, the public sector workforce leapt from 11,940 in 2000 to 18,530 last year. David Lowe, of the Employers and Manufacturers Association, accused Government departments of "chequebook recruitment".
Lowe, a former private secretary to Prime Minister Helen Clark and former Finance Minister Bill Birch, said some companies had told staff they couldn't match public sector wages. "We know that people have to fill up their cars with petrol and go to the supermarket and buy milk and cheese.
"Knowing you enjoy your work doesn't fill up the car."
Lowe said people used to think of the public sector as it was portrayed in the 1980s TV comedy Gliding On but the reality had changed.
"They took a decision to attract qualified people. They have to attract market rates but now they're leading the markets. I don't think the public sector should be leading the market, the private sector should be."
Lowe said the size of the public sector had forced Government departments to compete for staff. IT and health were suffering from a downturn in skilled labour.
Latest figures show the trend helped push the average hourly rate in the capital to $32.64 in March, compared with $28.42 in Auckland.
Businesses and recruitment companies in the capital said they struggled to hire staff who preferred a less-pressured environment and working fewer hours.
Jason Walker, director of Hays Recruitment, said people were attracted to the public sector because of the "flexibility and work-life balance". The sector was becoming more popular because it was seen as "recession-proof" in a troubled economy. It's sort of a safe haven for employees."
Helene Higbee, of specialist remuneration firm Higbee Schaffler, said she had noticed the public sector growth in her 20 years in business, particularly since 2003.
She said there was less budget accountability in the public sector. "Traditionally, public sector didn't pay as competitively as the private sector, now they're paying as competitively, if not more."
Jarrod Moyle, a consultant with recruitment firm Sheffield, said the private sector was having to compete harder to land top candidates.
Wellington blogger and Libertarian Lindsay Mitchell said public sector staff didn't generate income for New Zealand. "They require more paperwork and produce more paperwork. They do not add to economic growth, which we so badly need, and quite probably hamper it."
Act leader Rodney Hide said the growth of the public sector in Wellington made it feel like the city was "paved with gold".
While businesses in his Epsom, Auckland, electorate were struggling, everything along The Terrace or Lambton Quay was "up, up, up".
Hide said he couldn't see public workers achieving "any great value. It's virtually dead money.
"Vast areas of the state sector are the equivalent of digging holes and filling them with money."
The State Services Commission said nationally, private sector growth outstripped that of the public sector between 2002 and June last year.
And the Public Service Association said it was wrong to claim Government spending was "dead money".
National secretary Richard Wagstaff said the public service was a "small fraction" of the Wellington region's workforce and was heavily outnumbered by private sector workers.
Wagstaff said the public service had a staff turnover of 20 per cent because of high workloads.
The sector struggled to recruit lawyers, finance analysts, planners, IT project managers and human resource staff from the private sector.
Counting all the benefits
Being home in time for dinner is not the only benefit of Raneet Bhim's new job. Since leaving his private sector job to join the Ministry of Justice, the accountant has increased his pay packet by 25 per cent.
The 28-year-old moved from a salary of $60,000 to about $75,000 a year. "There might be the assumption that your pay goes down in the public sector, but, if you look at it in terms of hours worked, it turns out the same."
He is enjoying the new lifestyle that allows him more time with his wife, Raksha.
"There's a lot less stress. My previous workplace was pretty intense. There was less time with family."
Bhim enjoys working hard between 9am and 5pm, rather than staying late at the office and doing 60 to 70 hours a week.
"I am home in time for dinner. Before, I used to be the last person home. There were times when I would be home pretty much close to midnight."
Bhim said the difference between the public and private sector is the flexibility to move work around staff if someone has gone home sick.
"It was just in the back of your mind there would be a whole heap of work to go back to. It's more flexible here."
Workers wanted
Good staff are hard to find but never more so than in Wellington.
Gareth Kiernan, managing director of economists Infometrics, said applicants could be juggling job offers from the public sector.
"From a business point of view, labour costs have been pushed up. Certainly the application numbers are well down."
Kiernan said the company had been looking for an IT person for some time, but with no luck.
"I think there has been quite a lot of competition there, especially for anyone who's reliable.
"It definitely seems to be the case of a very tight labour market making it difficult to find people."
Kiernan said the company had taken a stand and would not throw more money at potential staff.
"We don't go after someone at any cost. You have to be pragmatic and realistic."
