[As published in Nov/Dec BayBuzz magazine.]
Eighteen months ago BayBuzz took a look at the local labour market, and reported that Hawke’s Bay was experiencing a shortage of people across the board, and that immigration rules were constraining business.
Now we look again, this time through the lens of Cyclone Gabrielle. We talk to a range of organisations involved in supporting either people or businesses, as well as hear from employers about what they’re experiencing.
What the economist says
Rob Heyes, principal consultant with Infometrics, says the Hawke’s Bay labour market gained 9,000 filled jobs between June 2019 and June 2023, while unemployment fell from its peak of 6.4% in the September 2020 quarter to 3.4% in the June 2023 quarter.
The cyclone had a positive effect on the labour market with unemployment falling by 0.7% between the March and June quarters.
While Hawke’s Bay has also benefitted from the addition of 4,400 recent residents in the past four years, he warns that: “Kiwis are leaving New Zealand in record numbers”.
Regional job vacancies are on the rise, with SEEK data showing a 7% increase in listed roles between July and August this year.
Tough out there for business
Karla Lee is CEO of Hawke’s Bay Chamber of Commerce. She says that some businesses are finding it tough, post cyclone.
“When large organisations, such as timber processor Pan Pac, that are major contributors to Hawke’s Bay’s economy are not producing, there’s a ripple effect through the business community.
“We all rely on each other for something, and when something in that ecosystem breaks, we all suffer somehow. And whether that’s because someone goes out of business, or they lose their job, or they don’t have a house to live in … all of this … it breaks.
“We are currently in a broken system and we really need to provide as much support as possible to these businesses, so they stay in business.
“Now they don’t have work, but they will do in the future. I have some concerns around businesses that because of the cyclone have had to downscale.”
Her concern is that staff who are laid off, could leave Hawke’s Bay.
“And we lose them, and then all of those contracts come back. How do we get them back, if we lose skilled staff? You can’t necessarily redeploy a graphic designer to plant trees; they’re going to go somewhere else.
“Many businesses are hurting with cashflow, and using their tax money to pay their staff, hoping they can hang in there until things turn. They’re really on the edge,” says Lee.
Lee believes that Hawke’s Bay will come back really strong. “We’ll see a turn next year. It won’t be all better, but a turn is coming.”
MSD – supporting job seekers and employers
Karen Bartlett is the East Coast Regional Commissioner for MSD. She says that the number of people on jobseeker support is going up presently, against historic trends for this time of year.
“It’s unusual because numbers of people on benefit generally decrease as a result of seasonal work from October through until April/May. When people leave benefit, even for seasonal work, a percentage remain in longer term employment. This didn’t happen this year.”
Times are uncertain, she says. “We are finding that people have been impacted (by the cyclone). We are working very hard when people come in to apply for benefits to connect them with employment or training, as quickly as possible.
“We also have people that are suffering from the impacts of the cyclone, so we need to be careful. Some people may require extra support and time to recover.”
There are jobs out there, she says, for people who are ready to go.
“People may need to compromise their wish list, to meet the market. I’m not necessarily talking about money, but also the type of work. There is also a need for our employers to be flexible and work with the supply that is available. MSD has support packages for employers to bring people on, and we have products and services to help retain or retrain people.”
Bartlett says that there are a lot of work readiness programmes in the Bay, and some go deeper than others. “We do have a lot of quality providers, and they can help prepare people for work, mainly funded by MSD.”
Those programmes deliver a significant return on investment for the community, she says. “Especially rangatahi, if they get into work early and stay connected with their job, it is a significant contribution to the wellbeing of our community as a whole.”
Covid and the cyclone have taken a toll, she says. “We are bearing the brunt of a lot of things at the moment. The need for people to have the tools to contribute to their own wellbeing, and the wellbeing of the community, has never been more important.
“We offer a range of services and programmes including helping people apply for a job, or sign up for a training programme. We also do industry specific training such as ‘Wheels, tracks and rollers’.
“We had 62 people through that course in the past five months, as well as 27 through Class 2 Heavy vehicle licence, and three Enhanced Taskforce Green programmes, which has assisted with Cyclone Gabrielle clean up, totalling 30 people.”
What’s growing?
Karen Barlett says the construction, civil infrastructure, health, and social sectors are all growing.
Looking at the construction sector in detail: Waihanga Ara Rau, the Construction and Infrastructure Workforce Development Council, whose main job is to ensure vocational education aligns with industry demands, estimates a labour supply gap of 6,952 in the Hawke’s Bay construction and infrastructure sector as at June 2023.
While their current workforce shortage projections have taken into account the workers needed for the $1.1 billion of housing planned for the region, they have not yet factored in the significant workforce demands of the cyclone recovery and rebuild. To put that number into context, it would nearly double Hawke’s Bay’s construction sector workforce (estimated at 7,837 as at March 2020, source Waihanga Ara Rau).
Even Waihanga Ara Rau says there aren’t enough people with the skills to do the work.
A spokesperson for the organisation said: “Since we started there has been an increase in apprenticeships, but there are also people retiring, or leaving the industry, so there’s a leaky bucket. We are providing free tools and tips to help employers keep people.”
Two agencies tasked with supporting Hawke’s Bay to achieve its labour force objectives are the Regional Recovery Agency (RRA- formed in the aftermath of Cyclone Gabrielle) and the Regional Economic Development Agency (REDA).
Ross McLeod, CEO of HB Regional Recovery Agency, says that projected workforce numbers are significant and derived from preliminary work plans from organisations like the councils, Waka Kotahi, and KiwiRail.
“The work programmes have not been phased or sequenced, and the reality is there simply will not be funding or the workforce available to complete all those work programmes in a compressed window.”
More workers will be required once the phasing work is done, he says. “And there will need to be a number of approaches taken to achieving that … including utilising existing contractors in the region and developing more workers locally, both of which will be positive for Hawke’s Bay on its recovery journey.”
Attraction of domestic and international migrants will also be necessary, with “the RRA working closely with central Government, Te Waihanga and the key parties leading this work to ensure we have the right balance when it comes to things like workforce development, immigration and housing.”
On the consequences if Hawke’s Bay fails to achieve the required workforce numbers, McLeod wouldn’t be drawn, except to say that work programmes weren’t yet sequenced, a critical step to ensure the region and infrastructure owners can develop the optimal delivery programme. And that it: “factors in things like funding availability, prioritisation, and workforce availability. It’s also important for the region that we don’t inadvertently drive up the cost of labour or materials by trying to do everything at once.”
The RRA will play a co-ordination role, working alongside key partners, he says, “and will also continue to identify those key instances where additional opportunities can be captured, where we can create something better than what existed pre-cyclone, as we work to build back safer, stronger, smarter and more resilient than before.”
REDA CEO Lucy Laitinen, just six weeks into her role when she spoke to BayBuzz for this article, says that the REDA is looking at labour needs in construction and roading, “because that’s front of mind for everyone right now.”
The region is still getting its head around the numbers of people required for the recovery, she says, and the pipeline of work in terms of timing. “It’s not 8,000 people in the next six months, it’s a several year process.
“And how do we gear ourselves up for that? REDA will not be replicating any of the work done by the Regional Skills Leadership Group, the Workforce Development Council, or MSD.
“At a practical level we are looking at how we can co-ordinate some work around progressive procurement. We are starting to figure out where our role might be.”
Building local talent will be a focus, and building up people so that when the recovery work is done, Hawke’s Bay’s young workers are set up with a solid future ahead of them, says Laitinen.
Work readiness – what’s it all about?
The Development Hub is a business that helps job seekers get work ready. Based in Hastings, and more recently with a branch in Taupō, The Development Hub (TDH) since 2017 has worked mostly with Māori and Pasifika women who want to get into the workforce.
TDH’s track record spans more than 50 in-house programmes, for almost 700 candidates, with a completion rate of more than 80%. Of those who complete, more than 80% are placed into employment.
BayBuzz caught up with founder Sarah-Jo Barley and head of business and community engagement, Amanda Palmer to get their take on what’s happening in the labour market, and how things have changed over the past seven years.
“One of the things we’ve noticed, is that people are not presenting with just one or two barriers to employment, like they would’ve in the past. They’re presenting with multiple challenges, the compounding stress often has a flow on effect and can significantly impact mental health.
“Post cyclone the complexities have heightened again. And the financial pressure has kicked up too. That impacts on the ability to get to a programme, to get to mahi, to meet basic needs for whānau,” says Barley.
“We have to wrap everything into our programmes to meet the needs of candidates walking through our doors,” says Amanda Palmer.
“Support to write CVs, cover letters, and interview techniques are secondary now. It’s not a hard and fast approach, it’s about making sure people are well and happy and healthy, and equipping them in a more holistic way.”
Barley says that TDH can help employers with ease of hiring and access to a pool of candidates that they hadn’t previously considered, and with access to flexi wage subsidies available from MSD.
She offers advice for businesses: “One thing employers can do, is be flexible on the hours that are required of their staff, because there’s a fabulous pool of candidates out there. And I’m talking particularly women, because that’s who we work with.
“You can get great staff, if you can work with them, providing flexibility that allows them to have a work life balance that supports family responsibilities, that will in turn drive reliability at work,” says Barley.
Palmer adds: “We know by working with our candidates and carving out a more positive future for them that it will have a ripple effect … and flow on to the wider family.”
Barley says there will always be a need for work readiness programmes.
“We work with wonderful wāhine, who are really keen to get into employment. People are under a lot of pressure. We provide a place for women to get holistic support, that’s built through trusted relationships with staff and facilitators, along with connection and friendship with others on the programme.
“That’s the beauty of what happens at The Development Hub, the connection the women find with each other … that lasts beyond the course. We need businesses to come and seek us out to partner with us and share in the opportunity,” says Barley.
What businesses are experiencing
The labour market is still relatively tight as evidenced by this ‘vox pop’ from businesses and industry associations – comments abridged in some cases.
Dave Mann – Interim Executive Director People and Culture in Te Matau a Māui Hawke’s Bay: “Te Whatu Ora is progressing a number of actions to address pressures on our health workforce. Te Whatu Ora in Hawke’s Bay is the largest employer in the region with just over 3,000 full-time equivalent staff, excluding casuals.
“There are workforce pressures especially in nursing, allied health, scientific, and technical. The number of vacancies is slightly higher than before Cyclone Gabrielle, however, the cyclone does not appear to have directly impacted the recruitment of staff. In January 2023 the number of vacancies (full-time equivalent) was 15.4% of the Hawke’s Bay workforce and as of August 2023 was 17.6% of the workforce.
“Te Whatu Ora has a number of ongoing recruitment campaigns to grow and retain our health workers, with nursing a particular area of focus. We have also established a dedicated Health Immigration service drawing on overseas health workers, and are encouraged to have received more international interest in positions in Hawke’s Bay. We will continue to build on progress through actions outlined in our Health Workforce Plan released in July this year.”
Hannah Christensen – People, Capability and Sustainability Director at premium pet food manufacturer ZIWI: “Recruitment is still taking time, with some technical roles proving particularly challenging. We are encouraged with the talent we are attracting and have managed to fill more than 30 critical production roles throughout July and August (and we’re still recruiting!).
“Our outlook is optimistic as we continue to grow our presence with local capability contributing to our global growth.”
Sophie John – Head of People and Culture at technology company Fingermark: “From my perspective it’s always a challenge to attract talent into the regions, hence having significantly more remote workers. The market in terms of movement seems to have slowed from the past year or two, where preferences like flexible working etc seem to be the key focus for applicants, rather than increasing salaries. It’s definitely not as challenging as it was a year or so ago.”
Mark Hamilton – Managing Director, Alexander Construction: “Recruiting is getting easier as the Provincial Growth Fund money has now moved through the region and there has been a general drop in activity. Immigration relaxing has also helped us immensely. The construction market is expected to improve slightly. Enquiries have started to lift ever so slightly in recent months after a 10 month quiet period. That is expected to turn into consent number increases in six months or so, which will then need labour resource to build. Staff retention is still good.”
Hamish Saxton – CEO Hawke’s Bay Tourism: “It is a challenging environment for tourism and hospitality businesses. The pandemic and cyclone have caused demand for staff and employee availability to fluctuate. At times a lack of consistent trade has meant many businesses have been forced to reduce operating hours, leaving them unable to offer consistent shifts to staff, while others did not have enough staff available to operate at capacity. Shortages across the board: chefs, kitchen staff, housekeepers, cleaners, front of house and managers. Businesses are aware of the competitive job market, and are working hard to create an attractive work environment with opportunities for growth.”
Dean Smith – General Manager, Hawke’s Bay Fruitgrowers’ Association: “Cyclone Gabrielle was catastrophic for the horticultural sector. As we approach another harvest, it is crucial that we collaborate with local and central government regulators to identify timely solutions to accommodate our seasonal workers appropriately. HBFA places significant emphasis on supporting workforce recruitment and development. Large investments in new technology and innovation is creating new and exciting opportunities for people to enter the industry and create remarkable careers.”
Todd Dawson – CEO, Napier Port: “It’s a tight labour market in the port sector due to a few factors. NZ-wide areas of the port operational workforce are typically older and entering retirement, which means the labour pool has been getting smaller. It’s also related to the time it takes to train a specialised workforce, such as crane operators, marine pilots, heavy plant operators. Many of these roles require years of training and certification. As an employer we offer good working conditions and competitive remuneration that attracts people, and we focus on growing talent internally by providing pathways and career opportunities to retain our people.”
Reality check
Businesses are hurting. The labour market is set to get tighter due to the cyclone recovery and planned housing developments. Hawke’s Bay is facing a significant talent shortfall, and we can’t simply train or retrain our own people to plug the gap. Even if we got every work-ready jobseeker support recipient off the benefit, we would still be many thousands short of what’s required.
The workforce projections for construction and infrastructure (alone) are mind boggling, and there’s a huge task ahead for those charged with guiding the recovery.
In addition to developing our own people, we need domestic and international migrants and their families to come and settle in the Bay, put down roots, and stay for the long term. Our employers need to recognise that talent has never been more mobile, and that sunshine wages are not a selling point, especially in a cost of living crisis. For the young, Australia has never looked more attractive.
Regional leaders too, need to make sure that we lift our collective supporting ecosystem game, so that we can attract and keep the talent that’s so desperately needed. These efforts will require greater collaboration and better results than Hawke’s Bay is used to.
Right now there are practical things missing.
Supporting infrastructure is lacking. Access to medical care is in short supply. Of the 26 GP practices in the region nine have closed their books completely, and 14 are taking new patients only under certain circumstances. That leaves just three whose books are open.
Affordable housing is just as dire with the cyclone compounding the existing rental crisis. According to media articles, it’s not unusual to get upward of 60 enquiries per rental property. That’s hardly a selling point for Hawke’s Bay.
Unless we overcome these barriers and fix our labour market supply issues, building back better, safer, stronger and smarter will be an impossible dream.