Skills shortage threatens our boom

By GEOFF CUMMING

Pity the poor employers. In tough times they spend their days tightening belts and laying off staff.

When the economy starts cooking, they complain they can't find the right sort of staff - and they have to pay them too much.

The issue of skills shortages rears its head in a buoyant new economic outlook report for the Auckland region which forecasts growth averaging 4.5 per cent over the next two years.

But employers quickly seized on two possible handbrakes on growth - staff recruitment and the related issue of rising wages.

Firms in high-growth, high-technology industries have endured the problem for several years.

But now that the economy is expanding, other employers - particularly those in manufacturing, engineering and commerce - are finding skills shortages a critical issue.

Calls for a new wave of immigration offer a quick fix for some, but finding a long-term solution is much more complicated.

Those in industry say the causes of the shortage include education issues, low wage rates, lack of industry training and the small size of our labour pool.

But it is even more complicated than that. On one side, at the end of last year 11 per cent of university graduates were still seeking fulltime work a year after getting their degrees.

On the other side, a January survey by the Northern Employers and Manufacturers Association showed that 45 per cent of respondents were having trouble recruiting skilled staff. Nearly 30 per cent had trouble finding management-level and professional staff.

Manufacturers in the lower North Island have even greater problems. More than 60 per cent said they had trouble attracting the right type of staff.

Recruitment specialists say the technology revolution and New Zealand's small population have produced a skills headache which will last several years.

The number of people employed as technicians and in related fields grew 42 per cent in the past 10 years. The number in corporate, financial and specialised managerial areas rose 38.4 per cent.

Right now, says Lampen Group general manager Jane Kennelly, gaps are most acute in the rapidly developing callcentre field. Accounting, legal support and system support staff are also as scarce as hen's teeth and firms are resorting to innovation to attract them.

"The balance of power has shifted to the job seeker," Jane Kennelly says.

"It starts as early as schooling. Schools aren't encouraging students to become career-minded in the technology field.

"We're going to be faced with quite critical shortages in the next few years."

New Zealand's wage rates are an issue in technology, as top talent is drawn to jobs in Britain or the United States.

Despite the huge growth in the financial and technology sectors since the early 1990s, manufacturing remains the biggest employer in the Auckland region and the powerhouse of the national economy.

Bruce Goldsworthy, manufacturers' director for the Northern Employers and Manufacturers Association, said manufacturers were having trouble finding staff with computer literacy and even language and numeracy skills.

The case reported in yesterday's Herald of a North Shore firm which offered four engineering apprenticeships but drew only two unsuitable applicants was far from unusual.

Mr Goldsworthy said not enough school-leavers were taking up trades.

"Educationists need to be made aware that there are opportunities for people other than lawyers, accountants and journalists," he said.

"There's a perception in some areas that manufacturing is a dirty-hands activity."

He agreed that many employers had failed to pick up the training tab since the demise of Government-sponsored apprenticeships 10 years ago.

"With continual restructuring in manufacturing, firms have regarded training as an optional spend."

Employers often found that if they paid to improve skills, workers then took their newly acquired abilities to higher-paying jobs elsewhere - often overseas.

But some industries were working hard to improve training and develop staff with a full range of skills.

Government plans to reinstate apprenticeships, and traineeships for non-trades jobs, are welcomed.

Schooling issues such as what pupils view as attractive careers, parental guidance and teachers' inability to keep pace with the knowledge economy are seen as affecting the calibre of students entering tertiary training or the job market.

Science and engineering are seen as lacking glamour, employers say.

They also lament the education system's inability to predict where job demand will be in five to 10 years - or to turn out students with basic skills.

Research by the Central Employers and Manufacturers Association found that half the replacement staff employers wanted were expected to have post-school qualifications. Over the next three years, this would rise to 60 per cent.

While the education system could never deliver all the necessary job skills, it was assumed that schools would deliver basic literacy, analytical and personal skills, said the researchers' report.

"Shortcomings in New Zealand's basic educational performance undermine the ability of businesses to compete in high-value product markets here and overseas."

Senior secondary and tertiary education also had shortcomings and was a "deep-seated underlying barrier to growth."

Employers are developing a range of responses to the skills shortage.

Iman Ali, economic development manager of the Manukau City Council, said employers complained of recruiting tertiary graduates and then having to teach them basic writing and communication skills. Responses in Manukau - a major manufacturing area - included helping to pay for apprentice training and a programme to keep fourth and fifth formers at school until they obtained a qualification.

Nationally, employers and unionists have joined forces to set up Apprentice Training New Zealand in a bid to reverse the slump in apprentice training since the Employment Contracts Act brought an end to the Apprenticeship Act.

General manager Jim Sharp said the number of apprentices had fallen from about 3000 in the 1980s to around 2000 today.

He predicted that the demise of training in the 1990s would create a generation of middle managers without trades skills.

His organisation helped to "take the risk away" from employers and apprentices involved in training. It was working to ensure polytechs took on suitable apprentices, and was helping to place apprentices in work during courses.

Mr Sharp said apprenticeships had fallen out of favour with parents, particularly mothers who influenced their sons' career choices.

At Auckland University, the first intake of students is studying for a new degree in software engineering. The dean of engineering, Professor Peter Brothers, said more than half of all engineering students now took computer-related degrees, and the faculty was trying to increase employers' involvement in course design.

The university also arranges summer holiday jobs which could lead to permanent employment when students graduate.

"Students think about going overseas because they can double their income and it's valuable experience for them," Professor Brothers said.

"But if they have worked here first, it improves the chances of them coming back."

Professor Brothers blamed the shortage of engineering graduates on the view that engineering is a career for "techno-nerds who are going to end up designing bridges or writing software all their lives."

"Part of the shortage comes from kids who are good at maths or physics and want a profitable career pursuing business studies through a BCom. But engineering is equally useful to them."

Whichever option they take, employers are singing the same tune. A tertiary qualification will increasingly be the ticket to overcoming our skills shortages, whatever the job.