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2018 Beyond Recruitment Economic & Labour Report – The Impact of a Labour-Led Government and the Ongoing Struggle for Talent

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With the release of the 2018 Beyond Recruitment Economic & Labour Report, business leaders across New Zealand have again given us a unique perspective of an increasingly complex business environment. With many of the themes from our previous report resurfacing in this year’s results, I’m sure you’ll find some great insight into what’s important for our business leaders, and the issues facing employers in 2018.  

The Impact of the New Government 

A change in government is always going to have an impact on business confidence, and this case is no different. The new Labour-led government has had a significant impact on employers’ outlook on the economy, with 29% of respondents indicating that they were dissatisfied with the way government is supporting business growth (up from 6% in 2017). However, when you look at the data a little closer, it poses an interesting scenario.  

Many will see this change simply as a result of the transition to a Labour government, however, what has the government actually done to lead to this drastic shift? Is it just the expected reaction from businesses when a left-leaning government takes charge? Is this a case of change making people nervous, or are there facts to back up the shift in perspective?  

One possible explanation is the long-standing view that Labour-led governments tend to impede business activity. Although, the Prime Minister addressed this concern a few months ago, arguing that confidence in business activity remains stable and is more closely tied with GDP. However, despite the apparent negativity towards the government in our survey, interestingly, most respondents indicated fairly strong business confidence, and over 60% of respondents had continued to add to their workforce in the last year. 

Ongoing Talent Issues 

Continuing a trend from last year’s report, the key issue that emerged again in 2018 revolved around the ongoing struggle for talent. With 47% of respondents stating that sourcing talent was a major obstacle faced by their business, and 44% indicating that a lack of talent is the biggest barrier to ongoing success, it’s evident that this remains a major problem for New Zealand businesses.  

Despite many organisations struggling to attract the right people, respondents (in both Auckland and Wellington) were split 50/50 when asked about offering higher wages as a potential solution. However, what is clear is that the risks of wage increases are rising. With the combination of government-led wage agreements, and more importantly, increases in the cost of living having an impact on quality of life, higher pay might just be necessary to attract and retain the very best. Yet, even considering these struggles, 54% of respondents indicated that they are not intending to use overseas workers to fill skill gaps.  


Whilst the change in government has seemingly affected businesses’ outlooks in a negative way, we’re not actually seeing any changes to business activity – which creates an interesting scenario. For now, we’ll just have to wait and see how it unfolds, but this is certainly going to be something to revisit in next year’s report.  

We know that demand for top talent will never change, and some companies will always find it harder than others, but the current state of the market poses several obstacles. Looking ahead, if our business leaders want to continue attracting the people to make a difference in their businesses, careful workforce planning will need to become a priority. 

For more insights into the Economic & Labour Market, download the 2018 Beyond Recruitment Economic & Labour Report today. 


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