Executive Summary

A defining feature of the New Zealand labour market over the past six years has been the rapid growth in demand for labour and skills. This has resulted in a sharp fall in unemployment and an associated rise in skill and labour shortages. These shortages have constrained the economy and inhibited the provision of health, community and other services.

To identify which occupations are currently in shortage, the Department of Labour conducts the annual Survey of Employers who have Recently Advertised (SERA). This report presents a summary of key findings from SERA 2006, and where possible, compares the findings to those from the 2003 and 2005 surveys.

The scope of SERA 2006 was expanded from that of previous surveys to enable information to be collected on skill and labour shortages across all major occupational groups^[1]. Previously, information was collected only for professionals, technicians and associate professionals, and trades workers.

When considering the New Zealand labour market overall in 2006, there were widespread skill and labour shortages with only 61% of the 5,486 advertised vacancies included in SERA 2006 being filled within ten weeks of advertising.

The survey found that shortages existed for all major occupational groups in 2006. Less than half (48%) of all trades workers vacancies were filled with a suitable candidate, as were only just over half the plant and machine operator and assemblers vacancies. In contrast, clerical occupations (75%) were only just under the shortage threshold^[2]. Fill rates from SERA 2006 at the major occupation level were as follows:

• Clerks (75%)
• Agriculture and fishery workers (70%)
• Legislators, administrators and managers (67%)
• Service and sales workers (63%)
• Elementary occupations (61%)
• Professionals (56%)
• Technicians and associate professionals (54%)
• Plant and machine operators and assemblers (54%)
• Trades workers (48%).

Skill shortages eased considerably in 2006 for both the professional and trades worker occupation groups following a significant deepening of shortages between 2003 and 2005.

The fill rate for professional occupations increased from 48% in 2005 to 56% in 2006, but remains well short of the fill rate recorded in 2003 (72%). Architects, engineers and related professionals were found to be in extreme shortage in 2006, and many other professional sub-major groups (including health professionals (excluding nurses and midwives), computing professionals; nurses and midwives; and social and related science professionals) were in severe shortage. Of particular note, were the persistent deep shortages of both structural and civil engineers. In contrast, some categories of teaching professionals did not appear to be in shortage or were only in moderate shortage.

Similarly to their professional counterparts, physical science and engineering associate professionals and health associate professionals were both in severe shortage in 2006.

The extreme shortages among trades workers measured in SERA 2005 have eased somewhat in 2006, with the fill rate increasing from 36% to 48%. Never-the-less, skill shortages remain severe for the trades. Nearly all the individual trade occupations were in extreme or severe shortage in 2006 with the exception of two trades - butchers and fitter and turners which had 77% and 79% fill rates respectively (i.e. only just below the 80% threshold level for shortages).

Sample sizes were much smaller for the six other major occupational groups included in the SERA for the first time in 2006. As sampling error increases the smaller a sample gets, some caution needs to be taken in interpreting results. Never-the-less it was found that:

• Corporate managers (67% fill rate) were in moderate shortage;
• As was also found in SERA 2005, chefs (52%) and hairdressers (56%) were both in severe shortage in 2006, while care givers (64%), sales assistants (65%), cooks (69%) and housekeepers (69%) were all experiencing moderate shortages;
• While the extent of shortage eased from the level found in 2005, roofers (57%) remained in severe shortage in 2006. Linespersons (47%), heavy truck or tanker drivers (40%), roading/paving machine operators (40%) and drainlayers (36%) were all very difficult for employers to find in 2006;
• Cleaners (69%) were in moderate shortage in 2006, while general labourers (49%) were in severe shortage. In contrast, packers (86%) did not appear to be in shortage.

In conclusion, it is positive news for employers that skill shortages eased to some extent in 2006 following a significant deepening of shortages between 2003 and 2005. However, shortages remain severe and widespread. The predicted continuation of a tight labour market with low levels of unemployment means that skill shortages will remain a major issue in the New Zealand economy.

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