NZ employee earnings rise 7.1% as employers struggle for talent

Published 9 May 2023 | 2 min read

Is New Zealand's Low Unemployment Rate Hiding a Talent Crisis?

New Zealand's employment situation is a double-edged sword. On one hand, the unemployment rate has remained at a steady 3.4% in the March 2023 quarter, a reason for the government to rejoice. On the other hand, employers are crying out for talent due to the lack of skilled workers in the country, a situation that threatens to worsen.

According to Stats NZ, employment and the working-age population increased by 22,000 in the March 2023 quarter. The underutilization rate decreased to 9%, while the labor force participation rate increased to 72% and the employment rate rose to 69.5%.

While these figures may seem impressive, it is essential to take a closer look. The Employers and Manufacturers Association (EMA) claims that the latest data suggests that there is still immense pressure on employers to find talent. A survey by the EMA earlier this year found that nine out of ten employers in New Zealand are struggling to find skilled workers, and the country's immigration settings are exacerbating the problem.

Despite this, the average total weekly earnings per full-time employee rose 7.1%, and all salary and wage rates, including overtime, increased by 4.3% in the March 2023 quarter, a reason for employees to be excited. However, this increase has also caused a rise in the cost of living, with the country's inflation rate standing at 6.7%.

The situation may seem dire, but there is a silver lining. The lack of talent has brought attention to the need for investment in skills and training for New Zealanders. Finance Minister Grant Robertson acknowledged the need to find talent and promised to continue investing heavily in skills and training programs for New Zealanders. The government's immigration settings are also attracting a significant number of overseas workers, making it a competitive global market for workers.

However, this investment in skills and training needs to be matched by employers' investments in technology, machinery, and training to boost productivity and lift people to higher-paying roles. The EMA has called for new investments in vocational education and training to raise skill levels in workplaces.

In conclusion, New Zealand's current employment situation has brought to light the need for investment in skills and training, not just for individuals but also for employers. With the unemployment rate staying steady and average earnings rising, there is still a chance to turn the situation around. By investing in the country's workforce, New Zealand can emerge as a leader in a highly competitive global market.

Key takeaways:

• New Zealand's unemployment rate stayed at 3.4% in the March 2023 quarter, which is near record lows and a positive result according to the government.
• However, employers are struggling to find talent, with nine in 10 employers in New Zealand struggling to find the right people for the job.
• The lack of skilled workers in New Zealand is due in part to the country's immigration settings, which tend to favor university and white-collar qualifications over technical and vocational skills.
• The average total weekly earnings per full-time employee rose 7.1%, as average ordinary time hourly earnings rose 7.6% to $39.83.
• To address the skills shortage, the government plans to continue investing heavily in skills and training for New Zealanders and look for ways to attract more overseas workers.
• Employers are also calling for new investments in tech, machinery, and training to boost productivity and lift people to higher-paying roles.
• Vocational education and training in the workplace is key to boosting both productivity in the economy and skill levels in our workplaces.
• Overall, while the low unemployment rate is a positive result, there is still work to be done to address the skills shortage and ensure that employers have the talent they need to succeed.

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