NZ Budget 2014: Three Key Areas for Recruiters to Consider

It’s almost two years to the day that I blogged about the surging Australian economy, their painfully tight labour market, booming agency recruitment desks and snake-charmer enticement of kiwi recruiters to cross the ditch to enjoy recruitment in the promised land.

How the tables have turned.

Following the Aussie’s release of their so-called “Black Budget” earlier this week, our NZ government revealed their budget which struck a very different note, delivering a surplus for the first time in 6 years.  The NBR provide a useful break-down of the salient points here, but what is there to take from this if you’re a kiwi recruiter?  Your Auckland commute might improve in years to come with money being loaned for infrastructure projects.  You might spend less on doctors’ fees, or benefit from longer paid parental leave, but there’s nothing hugely eye-catching for recruiters in particular.

The part that should make you stand up and take notice, though, is this:

“The flood of new migrants has been soaked up by the labour market, with government figures last week showing a participation rate at a record 69.3 percent in the March quarter and employment growth of 0.9 percent in the quarter.

The Treasury sees the unemployment rate falling to 5.4 percent in March 2015 from its current 6 percent rate, dropping to 4.4 percent by 2018, faster than the December forecasts. Nominal wages are forecast to rise at a faster pace of inflation over the four-year forecast horizon.”

Three key points for recruiters to be aware of when planning strategies for their desks in the coming months:

1. There is going to be a monumental squeeze on good quality, available talent in the labour market.  You’re going to have to rely on a pretty comprehensive sourcing approach, covering a wide range of channels, if you want to have much chance of delivering on even half of the job requisitions that come in from your clients and hiring managers.
2. The labour market is “soaking up” the flood of new migrants.  This is a good thing and hints at a broadening of the horizons amongst kiwi employers when weighing up technical skills against the good old “culture-fit” test. I’m witnessing this even in the rec-to-rec side of things and recruiters need to broaden their thinking accordingly.
3. Wage rises are going to outpace inflation.  Something to bear in mind, or have up your sleeve if you like, when reaching the all-important offer/acceptance negotiation part.  Agency recruiters I’m sure will be particularly satisfied with this development, seeing as their fees will rise in line with salary increases!

Matt Pontin from ASB entered the blogosphere this week with a well-timed blog that very much talks to point one above.  Keep an eye out for the next HRINZ Recruitment SIG too, which is on July 16th, covering the topic of Future Forward – the employment market in the next five years.  With quick fire speeches from Auckland Council Chief Economist Geoff Cooper, Fletchers CEO Shared Services Kate Daly, and Vend’s GM HR Brian DeGregory, this is one not to be missed.  Not if you want to take advantage of the opportunities heralded by the 2014 Budget anyway.

Got to dash, busy times ahead, have fun out there.