Skills shortage holds back growth

Despite the great weather and lifestyle opportunities, Hawke’s Bay employers are struggling to fill key vacancies. What’s behind the region’s skills shortage?

It’s a problem that’s all too common across a range of Hawke’s Bay firms: business growth is being held back because companies simply can’t find the skilled staff they need to expand.

Richard Lane employs 16 people at his Napier engineering companies Industrial Manufacturing Services and IMS New Zealand.

To fill a growing order book, the businesses depend on skilled engineers, designers stainless steel fabricators and welders but Richard says his efforts to advertise for additional staff over the past two years have been fruitless.

“It’s a situation that’s definitely slowing our growth. We could add another five staff in the workshop and two in the office if we could find the right people.”

Rachel Cornwall, director of Red Consulting Group which recruits for a wide range of industries in both Hawke’s Bay and nationwide, says Richard’s predicament is common across the region, but is a reflection nationally as well.

Aside from engineering, other sectors where it is a struggle to fill Hawke’s Bay roles include medical/clinical, law and valuation. Experienced tradespeople including electricians and plumbers are also difficult to find.

The problem is not specific to Hawke’s Bay, Rachel says. A large number of candidates from other centres are keen to move to the region but with the country’s economy growing and unemployment at historically low levels, attracting and retaining skilled staff is a nationwide issue for businesses wherever they are.

“In fact, it’s even harder in the main centres. Where we might have to look at 50 candidates before we find the right one for a role in Hawke’s Bay, in Auckland our team could be dealing with 400 or 500 people before we find the right person to fill a position,” she says.

Over the past year,about half of the management and leadership appointments into Hawke’s Bay organisations Red has been involved with have been candidates from outside the region.

“Hawke’s Bay is a really appealing region for many job candidates in other centres and we’re successfully attracting people here but at the end of the day, specialised or highly skilled in- demand roles remain difficult to fill because we’re competing for talent with the rest of the country.”

And while Hawke’s Bay may have an enviable climate and lifestyle opportunities, Rachel says that doesn’t necessarily set it apart from other regions and employers need to realise that there are a range of complex factors that candidates weigh up during a job hunt.

Home-owning Aucklanders, for example, may be reluctant to move out of the city because of the capital gains they are currently enjoying on their homes, something that could be a significant factor when they weigh up the financial implications of taking a job in Hawke’s Bay.

It’s also generally difficult to get parents of teenagers to shift regions, she says, because it involves uplifting children who are settled in their current schools.

Hawke’s Bay Chamber of Commerce chief executive Wayne Walford says Hawke’s Bay engineering companies in particular are increasingly looking to bring in staff from overseas to fill their skill gaps – a reflection of the fact that the region is competing for talent not just with other parts of the country, but also internationally.

Wayne says Hawke’s Bay also has to deal with the issue that senior salaries are higher in the main centres, even if that doesn’t paint a full picture for prospective Hawke’s Bay arrivals, given their overall living costs are likely to be lower if they take up roles here.

He says a major local firm looking to recruit for a senior role recently conducted research that indicated someone on a $150,000 salary in Wellington would have more money in their pocket if they took up a $90,000 job in Hawke’s Bay.

The challenge, Wayne says, is for Hawke’s Bay to promote its “overall attractiveness” as a location with a great lifestyle, an affordable place to live with excellent schools and other facilities.

Richard from IMS says industries need to invest more in training, a belief he puts into practice: four of his 16 staff are apprentices.

“The main reason businesses don’t take on apprentices is they can’t afford to because the oversight required from senior staff slows their tradespeople down and that makes them less competitive in the market,” he says.

“If the government turned around tomorrow and said we’re putting a scheme in place that subsides apprenticeships there would be people jumping at it because wages are getting higher and higher but an apprentice is a cost on a business given they’re not fully productive compared to qualified tradespeople.”

Another local firm with a strong focus on training as a means to overcome its skill shortage issues is Unison Contracting Services which has taken on 24 trainees this year, up from its usual intake of six.

All but one of 12 apprentice line mechanics, electricians and cable jointers the company took on in March are being trained in partnership with Connexis, the Industry Training Organisation (ITO) for the Infrastructure sector.

A further 12 trainees are due to start around August.

Unison acting training manager Mike Wereta said the ITO-based training “ensures that at the end of the training programme we have newly qualified staff who are more than capable of taking their place in the field and being productive”.

Mike said the company wanted to take a pro-active approach to addressing the skills shortage in the Energy sector.

“We’ve changed the structure of our training to allow for full-time trainees. We now have three dedicated trade coaches and a purpose-built training facility to ensure our trainees gain targeted skills and knowledge.”Rachel from Red says part of the problem is that young people do not appear to be motivated to pursue certain career paths such as engineering and perhaps companies in that space with exciting growth stories need to spend more time visiting schools to promote the opportunities.

“There isn’t a magic answer but we can’t just rely on our lovely sunshine to attractive people to the region. Businesses have to be rewarding their staff fairly and offering a superior work culture in order to attract the best people,” she says.

“They also need to think about how to hold onto their staff for longer. The flip side of worrying about attracting skilled workers is thinking about why good staff are moving on. Why are you losing them? Have they gone for better money or a better work culture?”

Despite the challenges, Hawke’s Bay is still managing to attract very good people into the region.

“While certain skill sets are in short supply, there’s tonnes of potential for this region to continue growing through attracting the best people. Employers just need to ensure they pay well, and that they’re looking after their staff.”