Tight jobs market gives worker edge

Employers are being warned to hold on to skilled staff by offering more attractive packages or risk losing them in a tightening labour market.

The strong economy has created huge skill shortages, with job vacancies rocketing in Canterbury and other parts of the South Island, says a new Department of Labour report.

Recruitment agencies said yesterday the data showed workers would be able to demand more from employers, particularly in terms of wages and flexible work hours.

The Department of Labour's Skills in the Labour Market report, covering the June 2007 quarter, showed the working-age population grew only 0.2 per cent, the lowest quarterly result for nearly two years.

Combined with falling net migration that meant employers had a smaller pool of talent available.

"The labour market has been showing this trend for some time and employers know they need to think outside the square when it comes to recruiting," Labour Department deputy secretary for work directions Monique Dawson said.

"They need to consider retraining and upskilling existing staff before looking for new people, and offer attractive terms of employment."

The report showed that although there was an overall decline in vacancies nationwide in the past year ending in July, 10 out of the 15 regions – led by the Nelson-Tasman region at 48 per cent – showed vacancy growth.

Canterbury registered the second-highest growth in job vacancies, at 30 per cent. The West Coast came in fourth at 26 per cent, followed by Southland at 20 per cent.

Otago saw growth of 8 per cent.

However, with two of the country's three main regions – Wellington (-3 per cent) and Auckland (-22 per cent) – experiencing a shrinkage, overall job vacancies in New Zealand remained flat.

The report said an increase in openings for highly skilled occupations was measured for the first time in 18 months.

While a decline in job vacancies was measured for both skilled and semi-skilled occupations, the sizes of these declines were smaller than those recorded last quarter.

The report described the shortages as a "long-term feature" of the job market, with conditions expected to remain tight.

"The market being what it is employees do have more bargaining scope," Mark McGinn, a recruitment and human resources consultant at PeopleFit Ltd in Christchurch, said.

However, he warned workers against being too demanding.

"There are some jobs for which we get very good responses, for example most things in the administration area, including people like designers and senior designers. There are lots of people with those qualifications and it offers up good choice for the employer.

"On the other hand it is tough to get good business development people, sales people and even tougher to get engineers. Those people can tend to demand a somewhat higher price."

The report showed an increase in firms having difficulty attracting skilled staff, up to 42 per cent from 41 per cent in the March 2007 quarter.

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