Labour Market Update - The market is moving - are you ready to meet it?
So the first quarter is over and for many, the end of the financial year has come and gone. Covid may have moved on (even if it hasn’t completely gone away) but financial upheaval is still looming , including the rising cost of living and the chance of recession, meaning it has been another turbulent year so far.
At the beginning of the second quarter of 2023, there are signs that the job market is moving again, so your for-purpose organisation needs to be ready to meet it.
New movement - job ads are up and applications are consistent
For a long time, things have been fairly stable in the job market. Unemployment has been low and people have been staying in the same roles. But it seems that the new year has brought new movement.
The latest SEEK NZ employment report released at the end of March shows that the number of job ads are rising after several months of stagnation. Ads rose 1% month-on-month and were 15% higher in February 2023 than in February 2019. This comes off the back of a rise in the previous month.
Applications per ad were down slightly after a year of growth but still remain higher than pre-Covid periods.
Unsurprisingly, hospitality and tourism saw a large rise in ads. But job ads also rose in several sectors that could impact on for-purpose organisations including marketing and communications, human resources and recruitment and administration and office support.
The ELMO HR Industry Benchmark Report also points to a more fluent job market this year. The survey showed around two-thirds of businesses were planning to grow their workforce this year, with large companies more likely to grow.
What does this mean for your for-purpose organisation?
Well, firstly it shows that there are people out there looking for jobs so if you are planning to recruit, now might be a good time to do it. But you might need to take into account increased competition. Before you recruit make sure you have a clear plan for your recruitment process and the wider package you can offer alongside salary. Our “fantastic” and “valuable” Recuit for Impact recording and workbook may help you do just that, or check out our blog for some recruitment tips..
Secondly, it shows that the job market is moving. That means you might need to be alert to your current staff looking to move on, whether it is to another for-purpose organisation or to a corporate role.
The ELMO HR report showed that turnover rates for new hires within a probation period are currently twice as high as they were in 2020, and a recent Stats NZ survey found that retaining key experienced staff was the number one issue for businesses.
A good onboarding process for new hires and then regular check-ins with existing staff can help you ensure they are still happy, that you are meeting their needs, and can pick up any potential moves early on.
Your salary budget needs to increase!
Minimum wage
On April 1st 2023, the minimum wage rose again to $22.70 per hour for adults, an increase of $1.50. The starting-out and training wage rises to $18.16 (80% of the adult minimum wage).
As a for-purpose organisation you’ll likely be aiming to pay above these rates anyway, but if your budget means you struggle to pay higher wages, then remember to take these new levels into account in your funding applications and budgets for the year.
The Living Wage is also rising to $26 per hour from 1st September. The Living Wage is an initiative that started in 2012 and is designed to encourage employers to pay above the minimum wage. Paying the Living Wage is voluntary and businesses and organisations can sign up to become accredited when they pledge to match the current Living Wage rate.
Advertised salaries were also up 4.4% in the year to February 2023, across all sectors - often due to a lack of applications and increased competition.
With funding tight and costs rising, we know it can be hard as a for-purpose organisation to find a salary rate that is attractive to candidates and within your budget. But we encourage all organisations to consider how they can fairly compensate staff. Do Good Jobs is also signed up to the #showthesalary initiative which means all job ads placed with us must list a salary or salary range. Being transparent about salary helps improve equity across the sector, and will actually mean more applicants for your job ads! You can read more here Let’s be transparent with Salaries #ShowTheSalary - Do Good Jobs - NZ's #1 ethical jobs board — Do Good Jobs
Fair Pay Agreements
Another development that might affect your pay levels is the Fair Pay Agreements Act which came into effect in December.
If an employment sector is covered by a Fair Pay Agreement (FPA) then the relevant union is responsible for bargaining on behalf of all workers in that sector whether they are union members or not. All employers in the sector are represented by an Employer Association (such as a national industry association).
Once the agreement is in place no one in that industry can be paid less than the agreed salary and any agreed working conditions must be adhered to. There is no way to opt out of the FPA as an individual organisation.
To start with, FPAs are being targeted at a number of traditionally low-paid groups including early childhood education workers, hospitality staff and cleaners.
The Big R is still looming
We couldn’t do a market update at the moment without mentioning recession (much as we’d all like to pretend it’s not happening).
Stats NZ said the economy shrank in the last quarter of 2022 but we won’t know for sure if the country is in recession for another few months. Current predictions are that gloomy conditions will persist into next year.
In times of economic uncertainty, it’s more important than ever to stay focused on your mission and values. We want to acknowledge the resilience and adaptability of those working in the for-purpose sector, and their commitment to making a positive impact in the world, even through the tough times - keep on doing good!