Newsletter June 2010

Content:

• The skills shortages are back quicker than expected; how quickly will they bite and how badly? We’ll let you decide.
• Top candidates available right now - updated today – visit this link to gain an overview of available talent.
• Top candidates available right now - updated today – visit this link to gain an overview of available talent.

The release of the Government statisticians’ labour market figures shows increasing employment. This will be welcome news to many.

With increasing employment the outlook predicting shortages referred to in our December 2009 newsletter has moved forward considerably.

So what’s next? Automotive Employment NZ takes a look at the employment figures and reports on observations in the labour market specific to the NZ Motor Industry.

• Where will the shortages hit first and how hard?
• How quickly will critical shortages return?

The following graph shows the rise from one of New Zealand’s lowest historical unemployment rates of just 3.6% to the much higher unemployment rate of 7.1% in December 2009. The shock for the recruitment industry was the massive reduction in unemployment from 7.1% to 6% in the subsequent three months. According to the Department of labour, the fall in the unemployment rate in the March 2010 quarter is the largest quarterly fall since the survey began in 1986.

Is it possible the rebound in employment will hit so quickly we will be down to 5% by the end of the December 2010 quarter?

The following statistics indicate we may be approaching a time where securing talented new hires once again becomes difficult.

March 2010 Quarter labour market overview – seasonally adjusted

In the March 2010 quarter, unemployment dropped by 25,000 (15.1 percent) down to 140,000. In the same period, the unemployment rate fell by 1.1 percentage points to 6.0 percent. This is the first fall in both the number of people unemployed and the unemployment rate since the December 2007 quarter, and the largest fall in the
unemployment rate recorded since the survey began in March 1986.

The number of people unemployed fell by 25,000 during the quarter, while the number of people employed grew by 22,000. This compositional change in the labour force resulted in a sharp fall in the unemploymentrate. Labour force participation remainedunchanged at 68.1 percent during the quarter.

The 1.0 percent increase in employment during the March 2010 quarter was driven by an increase in male full-time employment, which increased by 19,000. Female full-time employment also rose (up 7,000). This increase was partly offset by a decrease in the number of males and females employed part-time. Consistent with the growth in employment, actual hours worked rose by 1.7 percent during the quarter.

The (unadjusted) working-age population continued to grow during the March 2010 quarter, partly due to positive net permanent and long-term migration.

Statistics Highlights

• Seasonally adjusted unemployment decreased by 25,000 to 140,000.

• The seasonally adjusted unemployment rate decreased to 6.0 percent.

• Seasonally adjusted employment increased by 22,000 to 2,177,000.

The recession is over for most of us, at least officially.

Reports such as the BNZ weekly overview indicate improving market conditions; be these improvements “patchy” on occasion according to Tony Alexander of the BNZ.

Here at Automotive Employment NZ it is evident companies are now feeling a lot more comfortable with making hiring decisions. The dramatic increase in the number of job listings since January 2010 seems to corroborate this.

Light and heavy diesel dealerships are experiencing shortages of quality sales personnel.

The first area for us to experience skills shortages in is with vehicle sales personnel. This should not have been such a surprise for any of us. After all, many dealers are keen to play catch up after experiencing challenging
trading conditions during 2008 and 2009.

When we visited the Seek website on the 20th of May there were 1,461 sales vacancies. These vacancies are obviously not all automotive as Automotive Employment NZ’s managing director, Russell Phillips was recently misquoted as suggesting. It does however give you an indication of what we are up against when attempting
to locate skilled sales people. Great vision is not required to work out why some experienced sales people are being lured to other industries. Nor is the observation that some new hires are challenging the status quo of traditional hours of work or base salaries.

Good sales people were hard to find during the recession let alone now that we are out of it. Take a look to be prepared.

After the recovery of the 1990 to 1991 recession, as a Motor Industry recruiter, distinctly remember how hard it was to find good sales staff. This shortage was soon followed by technical personnel. Are we headed in the same direction?

Common sense would indicate we are heading for shortages, but do market conditions differ from what they were in 1991? Let’s tick or cross the boxes; did employers continue training apprentices during the recession or have the luxury of doing so?

According to the Tertiary Education Commission the number of industry trainees in the “Motor” sector for September 2009 quarter reduced by 14%.

The same webpage will show the same decrease in trainees for the Transport sector, e.g. 14%.

The figures for the December 2009 quarter have not been approved for release at the time this newsletter was written. This leads us to ask why? Given the release of these statistics are 4 months behind labour market
releases shown in earlier graphs we suspect they will not make good reading.

Immigration gains for the Motor industry peaked in the period 2005 to 2007. Immigration NZ reported increases
in the approval of residency applications during the period of the recession. If this is true, our opinion
is these figures skewed the data and reflect a panic response from new migrants caught out by the recession.
Securing residency instead of continuing to live in NZ on temporary work permits became a priority. This may have resulted in a paper gain but the number of skilled technical staff in the Motor industry reduced.

Many companies who had employees seeking to renew work permits after 2008 had to fight tooth and nail to retain the skills of migrants on temporary work permits. Many tried but few succeeded. NZ lost hundreds of skilled employees and Immigration NZ did not listen to our pleas that this would lead to shortages further down the track.

Gains to NZ population showing migration increases during the recession seem to defy logic. We are left wondering what the true story is or the quality of the reported migration gains. The removal of mechanics from the long term shortages list during this period would not have assisted migration gains in our industry either. We have serious doubts that NZ increased the number of highly skilled mechanics in NZ during this period.

An increase in vehicle/equipment sales will increase pre - delivery work, warranty work and pre - sale preparation
of used vehicle trade - ins in all sectors of the new and used motor vehicle industry. If this does not increase the number of vacancies for mechanics we would be surprised.

The number of technical vacancies is now increasing. Those companies who have not employed staff for some time will be in for a surprise when they try to find people with top end skills because while there are job applicants about, the quality applicants are thin on the ground. Sure, applicants are available, but you need to do your homework! In many cases we have observed good reasons why job seeking applicants are not in current employment.

Technical vacancies are evident in the automotive, heavy automotive and now the heavy equipment sector. For the farm machinery dealerships, the shortages never abated.

What about the shortages of Dealer Principals and General Managers?

2010 has been an interesting time for the light automotive sector with regard to senior management placements.
The second half of 2010 will be more so. It is already noted that top end talent is hard to locate in NZ and is in equally hot demand in Australia. To complicate this issue, Australian CEO’s and GM’s are usually remunerated at a higher level than their counterparts here in NZ.

Numerous senior management roles are surfacing this year and the roles will be hard to fill from either NZ or Australia. Automotive Employment NZ has already commenced a search for this top end talent in South Africa and the United Kingdom. We are keen to hear from those ready to step up and companies who can provide advanced warning of their recruitment needs.

Wage and salary rates review

Automotive Employment NZ has observed an unexpected increase in wage and salary rates during 2010. Click here to view our revised opinion on the current rates nationally.

Need staff now? Check out the available talent

Top candidates available right now, updated today – visit this link to gain an over view of available talent.

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