Labour Market Update - A rocky start to the year?

The beginning of the year often feels a bit slow - summer is still going strong for the first couple of months, and a lot of people take leave to make the most of the good weather. But now, at the end of the first quarter, it feels like we are well and truly into the swing of things. And so, it’s time to look back over the first three months.

The quarter ended on a technical low point, with news that New Zealand is back in a technical recession after a drop in the economy. This has been deliberately induced in the wake of the Covid pandemic and isn’t a huge drop. But combined with rising migration, which means there are more people in the country competing for resources, and the increased cost of living, things still feel pretty tight. That’s being reflected in decisions like Trade Aid’s recent announcement that it would be progressively closing its brick-and-mortar stores to focus on online selling.

Continued big slowdown in the number of job ads and a rise in applicants

At the risk of de ja vu, this quarterly update includes the (possibly unsurprising) news that job ad numbers are down again. There was a slight uptick in January, but month-on-month ad numbers were down 3% in February and down a whopping 27% compared to February last year. Taranaki and Wellington were the big losers with drops of 43% and 38% year on year.

Applications, on the other hand, rose for the sixth consecutive month

Those stats are consistent with our own numbers at Do Good Jobs. Our job ads are holding relatively steady month on month, but down on last year. But we are seeing an increasing number of new jobseeker accounts being created, higher views and clicks on our listings and larger numbers of applicants.

Those figures also don’t take into account the recent public sector job cuts in Wellington. The extensive redundancies and disestablishment of roles, coupled with predicted hiring freezes at many government agencies are likely to further fuel applicant numbers for other roles in the coming months.

What does this mean for you?

Increased applicant numbers can be a double-edged sword. While it’s nice to have more people to choose from, it’s time-consuming to sift through hundreds of applications, especially if the majority of them are unsuitable for appointment. So make sure your job ads are clear and targeting the right candidates. Working with a niche job board like Do Good Jobs can also help you restrict your applicants to those more likely to fit with your values and required skills. We’ve got some extra tips for you here.

Former government workers may be of high calibre and would be an asset to your organisation, but they may also come with public sector pay expectations. Be clear about what you can offer and consider adding perks if you can’t match salaries. Don’t discount these applicants if they seem overqualified or out of your price range as some applicants may be willing to make compromises in the current market.

Change of government is full steam ahead

Without getting too political, it’s difficult to ignore how the change of government and its new policies are now beginning to have an impact.

This was most obviously seen in the first quarter in the public sector job cuts. But there are a few other things that may also have an effect. One big one in the recruitment space is the extension of 90-day trials.

90-day trials have now been extended to all companies, which means you could consider starting an employee on a trial basis. There are some constraints around these, so if you are considering it, it would be worth taking the time to find out more.

Looking forward, we’re heading into the new financial year

Looking ahead to the next quarter, all eyes will be on Nicola Willis as she announces her budget. With the new financial year also upon us many organisations will be locking in their budgets for the coming year.

If your plans include recruitment, then you might want to consider locking one of our job packs into your budget early on. Job pack credits don’t expire so you can buy now and have the listing space ready when you need it throughout the year.

And, if your planning for next year includes how your organisation can reach out to and better connect with customers and supporters, you might find the latest research from TRA interesting. The work on Kiwi Codes gives a fascinating view into what Kiwis think is important and the values that they hold.