After a rough two and a half years in which businesses have been put through the ringer with Covid policies,we now have open borders and shifting dynamics in the labour market.
A certain level of churn is normal in the labour market, but we are told something called the ‘Great Resignation’ – people leaving their jobs in droves, or seeking better ‘work-life balance’ – is upon us. There is certainly clear marketing around the idea from job advertisers and HR businesses. Seek is running a banner advertising ‘The Great Job Boom: more jobs, less competition’, for example.
Like the rest of New Zealand, Hawke’s Bay is feeling the workforce angst, as our conversations with local employment experts indicate.
There is no question the country is short of workers, and for the last couple of years people were clinging to the security of a steady job in the face of so much uncertainty.
Now emerging from the fog of Covid, for many of us it seems like a good time to reassess our life paths and career ambitions. So, for businesses who are already facing soaring costs, inflation, rising interest rates and upward pressure on wages, the mood of a labour force thirsting for change is another challenge.
The July Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research shows business confidence is at its lowest since March 2020. A net 62 percent of businesses expect a deterioration in general economic conditions over the coming months, a big jump up from 34 percent last quarter.
Equally, there has been a mental health and cultural fall-out from the Covid era, which took a heavy toll on everyone, and workers now have greater expectations about flexibility and wellbeing in the workplace.
A recent survey from the Employers and Manufacturers Association (EMA) found that one in four workers plans to change jobs in the next 12 months, despite not necessarily being unhappy in their current role. Of those, 78 percent were looking for flexible working hours or hybrid working set ups.
Bay is booming
In Hawke’s Bay the labour dynamics are exceptionally tough, says executive recruiter and founder of Populous People, Rachel Cornwall.
A now constant theme of her work, she says, is that it is more and more challenging to find good people. And while the government had made it very hard for people to get into the country these last couple of years, undoubtedly exacerbating shortages, pre-dating all of the Covid disruption was massive provincial economic growth coupled with not enough people.
“In general, the employment market is in the most challenging state that it has been in, in my 18 years in recruitment. It is in very difficult shape and the resignation and departure of Kiwis offshore is a part of that issue.”
There are also some Kiwis who have decided to come home after being away for a long time, but this seems at best to be balancing out the young people who are now leaving at a faster rate, as the world opens up again.
There has been a bit more turnover in the market these last few months, she says, whereas previously people were staying put as long as they felt valued and remunerated well.
The positive part of the story, and what people often don’t recognise, is that at the macroeconomic level Hawke’s Bay is flourishing, Cornwall says.
“We’ve had increased economic activity and our pace of growth is higher than most parts of the rest of the country. There’s been this great investment in our primary sector – look at Irongate, look at Whakatū. So all of these businesses are growing and yet our working population is not keeping up with the growth of the businesses,” Cornwall says.
And then there are all of the services that sit around those core sectors. The need for large cool stores, the new wharf just completed at the port or even the construction at the sports park – all of this points to the positive pressures of growth. But for employers there is a danger they can’t sustain the business model that sits around that growth due to the labour shortage, she explains.
Cornwall says that while it is not hard to recruit high calibre people for senior roles – that tier of worker is still willing to move to, or within Hawke’s Bay for the right job – it is harder to find really good people in core roles such as accountants, engineers and sales people.
Alison Donovan, people and capability manager at Turfrey, a local company that provides goods and services for the construction and infrastructure sectors and employs more than 200 people, says all businesses are having “people issues” at the moment.
The border closures have had a big impact on a lot of businesses, including Turfrey, which brings in labour on a small scale.
“There has always been the English plumber, the South African plumber, the Welsh roofer, the Scottish gas fitter – and that’s what has dried up,” she says.
Despite this, she says they are not understaffed. The issues she has encountered have been around ensuring the right labour is in the right location on the right project at the right time. As Turfrey operates across the North Island, they have resolved the labour squeeze by sharing staff across regions as needed.
Holding on to staff is difficult as employers will now offer incentives, such as use of the company boat on the weekend, to lure workers away, Donovan says.
“The challenge is to engage with your employees and be connected to them. It’s not just about wages and being able to pay someone 50 cents more to entice them to come work for you. It’s about trying to retain your employee. So we introduced a team benefits framework last year to have something more to offer employees.”
This involves things like medical insurance, a paid day off on your birthday after two years, bonuses and long service leave, she says.
The ‘shoulder tap’
John McKeefry, strategic partnership manager at Havelock North-based consultancy AskYourTeam, says there is an increasing trend towards targeting the ‘passive candidate’.
“So this is people who aren’t looking. They are actually quite happy in their role. And so you now have the rise of ‘search’ in the standard recruitment areas. This used to be something done for technical specialist roles. This is going on mostly on Linked In.”
Recruiters will ring or email people, to see if a conversation will lead somewhere, to pique the interest of people, McKeefry says.
“It was probably there pre-Covid, but as the labour market has tightened it has grown. They are quite expert about it and it’s gotten more sophisticated.”
Donovan says it’s something she has also had to start doing to recruit for Turfrey when looking for hard-to-recruit administrative and management roles. She uses Trade Me Scout and Seek Talent Search to draw out any candidates who are not actively looking.
“A bit like a gentle shoulder tap,” she says.
McKeefry says that in this context, employers have got to make sure they are doing everything right to retain valuable staff.
AskYourTeam produced a white paper about The Great Resignation, advising employers on how to hold on to people, based on an offboarding survey of nearly 1,000 people. It comes down to three things, he says: the employee experience, the quality of the leadership and how valued they feel.
With business growth and labour demand increasing in Hawke’s Bay, particularly in horticulture, employers need to be aware of these dynamics, he said.
“I’ve only been here 13 years but for most of that time Hawke’s Bay was quite depressed. The closing of the meat works, ripping out apples – that sort of thing. Well now, they’re planting apple … so you’ve got that demand, a bigger economy, people moving here. There is a need for building capabilities, and as those businesses grow also middle managers, R&D, engineering and product development.”
Kelly Doyle, people and culture manager at Rockit, which grows tiny sweet apples for the export market and employs about 170 permanent staff, says both skilled and unskilled labour is short at the moment, much of it still to do with the lengthy border closures.
“For us, we used to have a lot of working holiday travellers that used to come in for our unskilled roles and that’s just left a big gap.”
The environment has become increasingly competitive and driven resignations with skilled roles, she says.
“We’ve definitely had some turnover, but not a significant increase in resignations. We have grown quite rapidly and a lot of our vacancies have been because of that growth rather than people leaving. But there is a lot of competition in Hawke’s Bay in those horticulture roles.”
Instead what she’s finding is that there are less applications and she needs to move quickly to secure people. As a result she says she’s very aware of what Rockit needs to be doing to retain workers and how it is looking after people.
Shiona Dyer, director of the Hawke’s Bay branch of workforce training franchise Dale Carnegie, agreed that a lot of people are getting shoulder tapped and will move very easily if they are dissatisfied with their job.
“In the Hawke’s Bay market, where there’s been a lot of movement, particularly in the primary industry, people are inspired to move very quickly, because there’s lots of opportunities for them.”
Dyer says this trend is particularly visible in the middle management area. “That’s the biggest challenge for employers at the moment. And that is generated by not looking after their employees.”
Cornwall says workers are ultimately looking for good workplace balance, and situations with colleagues and cultures that inspire people to do their best work.
“The young ones want to learn and develop. One of the major factors that keeps people in a role or pushes them away is their element of training and development for their own growth,” Cornwall says.
Wellbeing in the workplace
On the question of wellbeing and work, the EMA survey found that 91% of workers reported having felt negative physical effects as a result of work – fatigue, headaches and problems sleeping, that kind of thing – and 87% had experienced negative emotional effects as a result of work: anxiety, excessive worrying and irritability.
The upshot is that the workforce is physically, mentally and emotionally exhausted, and staff shortages are reported to be one of the main drivers.
Dyer says that through its training programmes, Dale Carnegie has an ear to the ground on worker sentiment and trainers have been hearing a lot more about worker anxiety than they used to.
“The reports that we’ve had in the last 18 months show increased anxiety is a key factor for a lot of people, which it never was before, or maybe for a small minority. But it’s become a major issue for a lot more people.”
I asked her why.
“I think it’s the unknown and I think it’s the extra stress on the people who are in jobs because of the lack of labour underneath them. So everyone’s running on reduced teams and that’s been compounded over the winter with influenza and Covid contacts – there were people who didn’t have full teams for three-to-four months. So there has been a lot of burnout.”
Doyle says it is now more socially acceptable to be open about these things and that’s a good thing. Rockit has a focus on wellbeing and has been running a number of initiatives and developed a culture of managers talking to people about mental health and keeping the lines of communication open. And this is part of Rockit’s strategy for retaining workers, she says.
“We are talking about wellbeing initiatives, we are looking at employee engagement and we are making sure we are talking about a development plan for them. And, you know, flexibility certainly comes up for the office staff and we’ve got a very flexible approach. We care about results, not where someone is sitting. We need to be flexible or otherwise we’d be left behind.”
Staff do still want to come into the office and connect with colleagues, she says, because despite enjoying flexible work, people have also missed the social side of office work – morning teas and Christmas parties. So it’s important the organisational culture is still maintained, she says.
So, is the ‘Great Resignation’ just a buzz word? With so many different factors at play, perhaps it’s too simplistic.
Perhaps it better captures workers’ unhappy mood side of things – burnout, anxiety, desire for better workplace culture – which these experts do find real and unprecedented, as opposed to people actually abandoning the workforce. It’s more about well-being than numbers.
Cornwall says while people are changing jobs at a high rate, it’s an economic catch up from Covid.
“I think the Great Resignation is a dangerous message to really push too hard. If it was a great resignation there would be a lot more people available for work. But because the migrant work force has not been let in there is a feeling that there is a lack of people.
“There are so many compounding economic factors right now that it feels like a great resignation. People do have choices as to where they work. But good people are staying put and being developed.”