The New Zealand job market has expanded yet again in the first quarter of 2022.
A strong rebound in the Financial Services sector, likely buoyed by increased interest rates, saw job opportunities in that sector increase by almost 40% for the quarter. Interestingly, a leading contributor to growth this quarter is Government employment, with a rise of 17.7% in public sector jobs. While it is great to see Government investing heavily in digital transformation and other policy initiatives, this is putting pressure on private sector hiring and wages. With the opportunity to tap into much higher wages in government roles, many candidates are using these jobs as a baseline for negotiations in the private sector. This is creating unsustainable competition and resulting in many businesses putting a hold on employment. This hold, however, means that talent is looking elsewhere.
Earning Australian dollars has also been made even easier by the blessing of remote working bought to us by COVID-19. There has been a wave of Kiwis, particularly those working in IT and software development, taking on Australian roles while remaining in New Zealand. While talent has not been physically lost, it has removed a significant chunk of candidates from the New Zealand market and forced a large number of New Zealand businesses into competition with Australia.
Flexible jobs also remain up from the previous quarter. However, while we saw a trend for this type of employment to far outperform permanent work at the height of the pandemic –as businesses remained uncertain of what was to come next – the data reflects a shift back to permanent employment.
This shift highlights two significant changes that we are seeing strongly across all sectors in the employment market. The first is that the New Zealand market is experiencing a scarcity of skills and labour unlike any that our member recruiters have seen in their working lives. As confidence begins to return post a period of strict lockdowns, businesses are keen to secure what talent they can in a tight labour market. In a climate where businesses are fighting to ‘lock in’ talent, permanent employment is more attractive than flexible engagements in many cases.
The second thing this shift highlights is that we truly are in a candidate’s market. Although we may have seen a rise in permanent jobs, these permanent jobs are becoming more and more individualised and include greater flexibility in their terms and arrangements than we have ever seen before.
With record levels of job opportunity and a scarcity of candidates, people applying for jobs in today’s market have unprecedented bargaining power when it comes to negotiating terms and conditions of employment. This has seen a trend toward unique and highly personalised contracts designed to support individual candidates to better fit their jobs around their lives. This might mean greater flexibility around working hours, increased parental leave, a hybrid work-model, or a purely remote one. Whatever it is, businesses who seek to employ in the current market will need to be prepared to accommodate individual needs when it comes to the workplace. If they haven’t already, businesses will need to adjust rapidly to thinking very differently about what permanent
employment looks like. At least for the foreseeable future, a blanket approach to working hours and generic employment terms has given way to a level of flexibility in permanency that we have never seen before.