October 28, 2021

The Auckland Talent Merry-Go-Round Has Stalled

by 
Tony Pownall

If the Auckland labour market was already at boiling point then this lockdown is the pot lid. When it does finally boil over many managers are going to get burnt.

If the Auckland labour market was already at boiling point then this lockdown is the pot lid. When it does finally boil over many managers are going to get burnt.

It seems like an eternity ago that Auckland was plunged back into a snap lockdown, with an attitude of “we’ve got this” from most business leaders.  While the usual industries of hospitality and tourism were hit hard, for most others business activity and confidence was on the up and there was a sense of riding out a couple of weeks before returning to normal again, as we did in February.

Ten weeks later and our resolve and optimism has frayed. Energy levels are down, many leaders tell us of the struggles of on-boarding remotely, and candidates, while remaining very active on SEEK, have switched from applying to browsing. Both sides are feeling wearier of adding a recruitment process to already busy days and minds.

While the end is coming into sight our sense is the talent merry-go-round will remain stuck on slow until late November, when schools, offices and bubbles start to reopen.

However, at that point both our conversations and data suggest Auckland is in for a massive period of catch up, which may swamp the usual Christmas hiring slowdown. As intent turns quickly to action, Auckland will see further acceleration of the talent movement and shortage we saw build through 2020.

The facts:

·        According to SEEK NZ in September there we 26% fewer job applications, yet site visits were very strong. People are monitoring job activity but being hesitant to apply just now, with the biggest gap between visits and applications ever seen. 

·        In the same month SEEK job ad volumes were up in Wellington and Canterbury year on year by 4 and 9% respectively, yet down 8% in Auckland, showing the lockdown impact is only local. 

·        Price increases are outpacing salaries. Over the year to September 2021 prices rose 4.9 percent. The 2.2 percent quarterly jump marks the biggest quarterly rise seen since 1987. As a result, salary has become an even bigger factor in employment decisions. 

·        Official data shows 46 percent of workers got no pay rise in the year to June, and for 38 percent of those who did get a boost it was less than inflation's 5 percent. 

·        AUT’s Wellbeing at Work study from earlier this year saw the category of people with “high turnover intentions” (those who were keen to change jobs), increase about 10 percentage points from 34.7 per cent to 46.4 per cent over 2020. 

·        Wellbeing and retention: In a recent workplace wellbeing survey by NIB 84% of respondents agreed that wellbeing initiatives contribute to the retention of high performing employees. Here at Cultivate we’ve just rolled out fully funded health, income protection and life insurance to all staff. We have noticed that non-cash benefits had fallen out of favour with many employers in recent years, replaced by a ‘cashed up’ package, but they’re making a comeback  

·        According to SEEK NZ 32% of people are currently considering a change in role in the next 6 months. While salary increase features strongly, we’re also hearing numerous other reasons including: 

                    I.       A need to realign their lifestyle or purpose with their job after reflecting on their career direction during lockdown

                    II.      The Australian brain drain: SEEK NZ tell us that 23% of all 18-34 year olds are considering a move to Australia for better job opportunities.

                    III.    A complete rejection of their employers’ approach to flexibility. Some organisations haven’t embraced any enduring flexible working practices, but instead have reverted to what’s quickly becoming an outdated 9-5, office based model. In fact 3 out of 5 candidates shortlisted for a recent role managed by Cultivate pulled out purely because the company offered no formal work from home arrangement. In another case we were forced to walk away when the hiring manager couldn’t or wouldn’t budge on the lack of flexibility on offer. It simply became impossible to attract any interest. We also know of other companies forcing workers back into the office during level 3, regardless of whether roles can be undertaking remotely. 

So, in summary, the fatigue, anxiety and lack of certainty impacting both hiring managers and job seekers in Auckland has slowed hiring activity through October. However, the underlying market dynamics haven’t changed. If the Auckland labour market was already at boiling point then this lockdown is the pot lid. When it does finally boil over many managers are going to get burnt.

So, what can you do?

1.   Have honest conversations with your staff about their mindset and intentions

2.   Review salaries for key staff

3.   Start trusting your staff to work flexibly, with a focus on outputs rather than inputs, before they go somewhere that does

4.   Introduce bespoke wellbeing benefits now to help staff through the lockdown, but also make permanent what you can

5.   Get proactive with hiring now. Candidates are still open if you work with an agency who will actively approach prospects

6.   Call us. We can help with salary advice, role scoping and tips for engaging talent in this market

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