A shortage of workers is forcing New Zealand's businesses to raise wages to compete, increasing the central bank's struggle to contain inflation.
August 3, 2022
WELLINGTON, New Zealand – When it came to finding experienced workers, New Zealand video game developer PikPok turned to Colombia. New Zealand video game developer PikPok found a solution to the prolonged difficulty in finding experienced workers: Colombia.
In February, the company, which has produced mobile games such as Clusterduck and Into the Dead, increased its staff by 180 to 35 when it bought a studio in Medellin, Colombia.
“It’s incredibly difficult to get to people with experience,” said Mario Wynands, managing director of PikPok. “By acquiring the studio in Colombia, that’s given us the opportunity to recruit talent from Latin America and scale up that way.”
This solution isn't available in other fields. From farms to retirement communities to hotels, employers are scrambling to find workers - and raising wages in the process, providing the central bank with a challenge in fighting inflation.
As a consequence of the pandemic and the slow recovery of immigration, activity for many industries is simply disrupted because of a lack of people.
In the second quarter, unemployment stood at just 3.3%. Incomes grew at the fastest pace in 14 years, up 3.4% from a year earlier.
The aged-care sector had only 78% of the 5,000 registered nurses it needed, said Rhonda Sheriff, co-owner of Chatswood Retirement Village and clinical advisor to the NZ Aged Care Association. Consequently, she said, there are aged-care beds that cannot be used across the country.
She proposes higher pay as a solution. Nurses in aged care should be paid the same as those in public hospitals, she said.
In recent months, the meat processing industry has raised concerns about labour shortages. There are 23,000 employees in the meat industry, but 25,000 are needed, according to the Meat Industry Association.
The report said that plants could not run at full capacity at peak times due to the inability to process all carcasses on time.
Due to shortages, Willie Wiese, general manager of manufacturing at Alliance, said his staff went to help in processing plants this year.
As a result of the pandemic, New Zealand's nursing and agricultural industries lost access to immigrant labour, which had long been a source of supply.
Despite claiming to simplify immigration in 2021, the government also made changes that raised barriers to low-wage migrants. In his remarks, the immigration minister said this was in order to help the country move toward a higher-wage, higher-skilled economy.
Despite the reopening of the borders in August, many Kiwis are leaving for other countries, especially Australia. Wynands and Sheriff said foreign employers were offering higher salaries, which was causing them to lose employees.
Due to the time it takes to recruit foreign workers, obtain visas for them, and move them into the country, economists don't expect to see net immigration until next year.
In the meantime, challenges remain. Dairy farmer Richard McIntyre, the spokesman for the farming lobby group Federated Farmers, said his industry had been short-staffed for a year.
Farmers had to work longer hours, and some jobs, such as pasture management, were being missed.
“The real difficulty is if I attract someone onto my farm, there are only so many people and I’m really just taking a staffer off someone else and that creates a problem for them,” he said.
“There’s just this fundamental shortage of people.” – Rappler.com