Employers back positive hiring intentions with action

The latest Hudson quarterly report on employment trends continues this year’s trend of NZ organisations displaying “consistent behaviour and ongoing hiring intent, which has been great”, says Hudson's executive general manager Roman Rogers.

“Now 2014 has seen four quarters of reasonable confidence on the part of organisations but, more importantly, their actual hiring behaviours have backed up what they said they were going to do,” Mr Rogers says, “whereas in the previous three or four years they might have suggested they were going to be bullish but then for whatever reason put the handbrake on.”

Nearly two-thirds of employers intend keeping headcount steady this quarter and, although positive hiring intentions slipped 1% to 30.8% (the same level as early 2014), intentions to keep headcount steady have risen 2.1% this year.

The Canterbury rebuild continues to be a key driver in positive South Island hiring intentions, the highest in NZ at 38.4%. A 9.8% drop this quarter after a similar rebound in the third quarter is reflective of the fact the rebuild “is not a straight line function” and the “natural wax and wane of large projects” makes it difficult for employers to accurately assess their headcount needs, Mr Rogers says.

In the upper North Island, investment in housing and road infrastructure is the key driver. Despite a 1.2% drop in positive hiring intentions this quarter, a third of the region’s employers still plan to take on more staff, while 63.6% intend to keep headcount steady.

The lower North Island had the most positive hiring intentions – up 3.8% for the fourth quarter – although most employers plan to maintain existing numbers.

Mr Rogers puts that increase down to “a course correcting rebound from the third quarter, which was reasonably soft in comparison” and notes that “the general commentary from customers in that particular region is they could absolutely feel a slowdown as it got closer the election, particularly in Wellington”.

Nationwide, technical and engineering remains the profession with the strongest positive hiring intentions at 50.6%, driven by the Canterbury rebuild and upper North Island infrastructure projects.

The sector enjoying the sharpest increase in permanent hiring intentions is financial services, which is “incredibly competitive”, Mr Rogers says. “The amount of effort that’s going into trying to figure out what their customers’ buying signals are and how they can actually connect with those people through online mediums is absolutely massive.”

Hiring in ICT is also strong, with 37.8% of employers intending to increase permanent headcount and a third aiming to lift to increase the number of contractors.

The increase in contractor hiring across the board – up 2.1% to 24.5% - is a trend Mr Rogers picks to continue as skills shortages increase over time.

“I think there are a couple of things playing out,” he says. “One is that as the unemployment rate falls, which it is, and labour force participation increases, which it has done, the availability of talent will become tougher. Even now when we’re still well above 5%, there’s actually quite a disconnect between the types of skills available and the kind of skills being demanded by customers.

"The other trend is we’re starting to see the contractor coming out of the woodwork,” Mr Rogers says. “They took on permanent roles when we went into the GFC, they went into safe harbour positions and they’ve just been waiting to see whether there’s an increase in demand for particular skill sets so they can potentially demand a higher hourly rate.

“Because in years gone by a lot of contractors weren’t getting good rates at all,” Mr Rogers says. “In fact, a lot of senior people reduced their expectations considerably so organisations got a lot of bang for their buck. But now contractors are realising there’s a little bit more of a bias towards them and therefore they’re looking to re-enter the contracting market.”