Goodbye 2023 - Welcome 2024
The year that was and the year ahead - Welcome 2024
Happy New Year! As we enter another year of business we find it is a good time to reflect on what has been, and finalise our planning on the year that is to come. I’m big on practicing an attitude of gratitude and reflecting for me is also considering what I am grateful for. For myself personally in business I am grateful for the team I have around me. Always striving to achieve outstanding outcomes for our clients, they really do go above and beyond. It’s inspiring, motivating and an honour to work alongside them.
2023 has been a challenging year for many reasons. As a nation, just when we thought we were pandemic free we have faced they challenges of high inflation, a downturn in the housing market, and national flooding disasters. There has simply been a lot for us to navigate through, and many have made it through to this point feeling rather like they are in survival mode.
For us it was an incredibly busy year, partnering with employers to find key talent – no easy feat with widely felt talent shortages across most sectors. The shortage of key talent has meant that end to end recruitment processes have been stretched out to sometimes double the length of time depending on the role. We know that for our employers, recruitment and retention is one of the most challenging and competitive aspects to running a business – particularly over the past two years.
The talent shortage is seeing the unemployment rate currently sit at 3.9% it has remained steady, with prediction that this figure will rise and as enter uncertain economic times in 2024. For now, we are still working within a candidate-driven market, which leaves smaller businesses in a wage war with larger companies with more resources, resulting in a real hindrance to business growth.
Salaries have continued to rise, interestingly a recent statistical report indicated that every single region in NZ reached a record average high when it came to salaries in 2023, with the average salary in NZ being $71,800, up 8% from last year. Even with these wage hikes, 61% of New Zealanders believe their current pay does not meet the rising cost of living pressures. Money talks in present times, and whist not always the number one reason people look to change companies, it has certainly become a high priority.
A recent Strategic Pay survey noted that the Engineering & Technical, Finance & Accounting, and HR roles have been the most challenging and difficult positions to fill. Those who participated in the survey, also noted that staff turnover has mostly remained the same in comparison in to last year.
Following on from the international border closures due to COVID-19 lockdowns in 2021 to 2022, this year we have seen a strong recovery in the migration sector, with an increased number of permanent arrivals in 2023. We are seeing this filter through to the employment market – but it is slow. Mitigated somewhat as we continue to lose talent to the lure of off-shore roles and much higher salaries.
After six years of New Zealand being led under a Labour government, the 2024 General Election saw the National party take the win with a 39% party vote. With the Government’s 100-day plan just released, we see that the Government is promising action. Below are some of the key points that will be of note to employers in the year ahead:
• Extend 90-day trial periods to businesses with more than 20 employees
• Abolish fair-pay agreements
• Streamline NZ’s Immigration process (including a refresh of many Immigration NZ polices)
• Create a multi-million-dollar fund to promote regional tourism events/activities
• Ending various business support programs (E.g. Provincial Growth & Callaghan Innovation)
• Disestablish Te Pukenga
• Review of Government Departments staffing
It is fair to say that there will be ongoing challenges for business ahead. For many, 2023 was a year where we felt great uncertainty and volatility – increased cost of living pressures, rising inflation and interest rates, talent shortages, changes in Government and fears of an upcoming recession, we saw it all.
With modest reports on the year ahead in terms of the economic outlook, it’s fair to note that while it’s not looking exactly rosy, it probably won’t get any worse either. Interest rates are forecasted to level out, inflation slowing and the housing market improving. Despite the commentary the year ahead does have an optimistic feel to it.
So for employers, particularly in the first half of the year while the market may soften a little, we expect it to remain a candidate-led market. A focus on retention of key talent, training and development would be key. We expect the focus on salaries to remain strong, and offering incentives and benefits that equate to cash in the pocket may just give you the edge when it comes to recruiting.
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