Money talks in the war for talent, and poaching is rife as recruiters and employers try to fill vacancies by shoulder tapping potential candidates.
With unemployment at 3.4 per cent and the border closure shutting out most international applicants, some employers are upping salaries for current staff to lessen the risk of them being lured away by more lucrative offers.
Big sign-on bonuses are up for grabs, and existing staff can pocket finder fees running to thousands of dollars for helping to secure new hires.
Bus driver shortages recently forced the scaling back of some Christchurch bus services, and Environment Canterbury warned Go Bus that actively recruiting for drivers within the public transport network would just shift the problem.
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Go Bus operations director Nigel Piper says it agreed not to target drivers from rival bus operator Ritchies, and there is nothing new about the $500 to $1000 finder fees Go Bus pays its employees in return for referring people subsequently hired as drivers.
The incentive payments are on offer in Christchurch and other centres around the country where Go Bus is seeking drivers to fill several hundred new school bus route contracts next year.
“We’re not saying go out and pinch a driver … we’ve been doing it for years as a legitimate recruitment tool.”
Beyond Recruitment executive general manager Ben Pearson has seen finder fees of up to $5000, most notably in IT, and he says they are being pushed more as a way of filling vacancies.
“We’re also seeing more sign-on bonuses to bind new staff for a period, usually a year, and they seem to average around $10,000, but may be higher.”
Other businesses are reluctantly resorting to head-hunting to maintain productivity and avoid losing customers.
HamiltonJet has a bulging order book, but being 20 workers short has contributed to delivery times being extended from 6 months to 12.
Managing director Ben Reed has redeployed office-based engineers back onto the factory floor to help fill gaps while continuing the hunt for new recruits, and offering higher pay is a way of persuading them to move.
“That makes me one of the poachers, and I have suppliers in the same street as me pleading with me not to steal their staff because there’s nobody in the market.”
Competition from overseas is growing too, and Pearson notes “quite aggressive approaches” to candidates from Australian recruitment agencies.
He says “blatant targeting and snatching” had not previously been part of the New Zealand way of doing things, but that is changing, and overseas companies can afford to pay big money while allowing recruits to continue working remotely.
Pearson cites the American software company that tracked down a skilled IT worker in a regional South Island centre and clinched the deal with a 50 per cent pay rise.
“It’s quite a different level to the old, ‘hey come and work for us for five grand more,’ it’s a new game now.”
Although shortages are most acute in IT, engineering and construction, the labour drought is far more widespread.
Human resources and health and safety personnel are in high demand as workplaces grapple with the vaccination issue.
“Even finding good quality admin staff or customer service staff is very, very difficult.
“Leadership positions are probably the easiest to fill at the moment because there’s always a latent population that’s looking to step up, but for the real doer roles, there’s a shortage across the board.”
Recruitment consultancy Robert Walters annual salary survey of 863 clients showed that while a high proportion of businesses are giving pay rises in 2022, they may not match the expectations of employees, many of whom are confident about job prospects, and prepared to move on.
In the tech sector close to 70 per cent said they were looking for a new job in 2022, and more than half were expecting a pay rise.
Robert Walters New Zealand managing director Shay Peters says headhunters have mid-level employees firmly in their sights and those in the $80,000 to $200,000 salary bracket can expect to be offered 10 per cent more.
“We have anecdotal feedback that people almost have no choice because of the salaries on offer and the cost of living increases, it’s almost a choice they have to make for lifestyle reasons.”
When our borders open there are fears of an exodus of workers with three to seven years “post-qualification” experience as young people head away on delayed OEs, and some have already gone to Australia.
Peters says there could be a “hollowing out” of mid-level jobs, and if Kiwis returning to New Zealand are in more senior roles, “that’s not going to marry up”.
Over the past two years the public service has grown by almost 8500 to 61,100, much of that growth related to the Covid-19 response.
In 2021, the average annual salary for a public servant was $87,600, an increase of 3.7 per cent from the previous year, and in the private sector average pay increased by 4.4 per cent over the same period.
BusinessNZ manager of employment relations policy Paul Mackay has tracked public and private sector pay rates to the end of the September quarter, and he says in most areas the private sector pays more.
However, public sector wages were higher for drivers, and also for clerical workers who include policy and communication advisers, and office administrators – “pretty much anyone sitting behind a desk and doing paperwork”.
Canterbury Employers Chamber of Commerce chief executive Leeann Watson, who has lost two staff to the public sector, says small businesses found it difficult to compete with government departments for the likes of financial controllers and office staff.
Over the past year the public service has employed an extra 442 policy analysts, and Employers and Manufacturers Association chief executive Brett O’Riley has been trying to hire one for months.
He says kāinga Ora has been “hoovering” up staff and in some cases government departments are paying well above market rates. “I’m talking $40,000 or $50,000 above private sector.”
O’Riley managed top hang onto several staff by giving them a pay rise, and Pearson says that is not uncommon in the current climate.
“There’s a lot of counter offering and improvement of terms and conditions when people think their staff are at risk, so the ratio of approaches to placement has been lowered somewhat.
“We’ll have people who will apply for a job and want the job, and at the last minute they end up staying because their employer pulls out all stops.”
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