Signs of a changing relationship between skills shortages and unemployment, along with some unusual statistical quirks, are clouding New Zealand’s labour market picture, according to the latest employment and wage data.
The country’s labour market has been sending conflicting signals over the past year or two, Felix Delbrück from Westpac said. “On the one hand, there’s been a steady rise in job vacancies and surveyed skilled labour shortages, and wage inflation has inched up to levels that aren’t far from historical averages. But jobs, growth and unemployment have stayed stubbornly soft, Delbrück said.
This gap persisted into the June quarter with strong GDP growth and further ticks up in skill shortages but with employment confidence research showing that households remained downbeat about job opportunities, and businesses were only hiring modestly, he said. “The growing gap between unemployment and skill shortages makes us suspect that there has been an updrift in ‘structural’ unemployment in recent years… In other words, it may have become harder to match people to job opportunities, resulting in rising wages for some while others remain unemployed.”
A number of unusual statistical quirks in the labour data were recorded, Delbrück said. These included:
Frustratingly volatile employment figures – with the 0.3% employment growth partly statistical payback from the tick up that came in the March quarter.
A puzzling jump in the female labour force participation unemployment rate – which will probably fall back into line with the results of the past year.
Wages rising at about the historical average rate despite high unemployment – which suggests that skill shortages exist in some occupations or regions, while workers were unemployed elsewhere.
“We suspect that the devil will be very much in the details of next week’s labour market [information] releases”, Delbrück said. “Even so, major surprises in the headline employment and unemployment figures are likely to prompt a market response – and given the tendency for the labour data to throw curve balls we don’t take much comfort from being close to market expectations.”
Meanwhile, recent Gallup research (covering 146 countries) found that most of the world was pessimistic about the job market with an average of 57% saying it was a bad time to find a job in their local communities. Europeans were the most pessimistic (72% said it was a bad time), while optimism was highest in the Americas (38% said it was a good time).
HR professionals need to ensure they continue to pay close attention to both their recruitment and retention strategies in order to attract and obtain talent in a volatile and unpredictable labour market.