Outlook for jobs not all gloomy

Recruitment firms say companies are hitting the pause button on savage job cuts and some are even hiring, despite economists forecasting another 60,000 unemployed in the year ahead.

Hiring expectations among employers have actually risen for the first time in two years, according to recruitment firm Hudson. Employers in the lower North Island remain the most confident, with more planning to hire staff than lay off workers.

The strongest demand is for information and technology workers and the biggest job cuts are likely in the construction and property sectors nationally, according to a Hudson survey.

But economics group NZIER's consensus forecast of the big banks and government predictions suggests about 60,000 Kiwis will lose their jobs during the year to March 2010, taking unemployment from 5 per cent to 7.2 per cent. That is in line with Treasury's Budget-night forecast in May, which predicted another 70,000 would join the dole queue in the year ahead.

Big job losses and low wage rises would see household spending fall 0.7 per cent in the year to next March. . But Hudson, one of the biggest recruitment companies in New Zealand, says hiring expectations have risen, while business consulting firm Mercer says New Zealand and Australian employers "have hit pause on making deep workforce or pay cuts for the rest of 2009".

The Hudson report, made public today, shows a net 0.5 per cent of firms plan to increase staff levels in the next three months. That means almost 16 per cent of firms plan to hire more, while 15.3 per cent of firms plan job cuts. The vast bulk of firms plan no staff changes.

"Those who made tough decisions early are starting to come out the other side," Hudson executive general manager Marc Burrage said. Because of the impact on staff morale, brand reputation and customer relations, employers in most industries were "very reluctant" to make any further cuts, he added.

Some firms were slowly starting to take on more contracting or temporary staff to help manage the workload.

A net 5.6 per cent of lower North Island firms expected to hire more workers in the coming three months, according to the Hudson report. But in Wellington, a net 7.9 per cent of government employers planned to cut contractors or temporary workers.

There was also strong demand expected for IT and telecommunications workers in the next three months in the lower North Island.

Nationally, smaller firms were more upbeat about hiring than big firms, though sentiment was lifting across the board.

Mercer said firms were looking to "trade up" on staff, by hiring key talent while trimming the overall workforce. Jobs were being cut in under-performing areas and those people were replaced with higher- quality staff that firms may not have been able to afford when unemployment was low.

"The war for talent is still fresh in people's minds," said Mercer's chief executive for Asia Pacific, Peter Promnitz.

New Zealand and Australian firms had not been as badly hit as those in many other countries, and despite uncertainty about the future, companies were "generally not slashing pay and benefits".

The Mercer survey of a relatively small number of 88 New Zealand and Australian firms suggests 57 per cent plan more job cuts, but only 1.2 per cent will cut more than 10 per cent of their workforce.

- © Fairfax NZ News