I write this in the first few working hours of the latest (August) lockdown. This one will be different. Not only will it (hopefully) be shorter than the initial Alert Level 4 lockdown in 2020, but employers know that as soon as we come out of it, the war for talent will be back on.
With the demand for candidates continuing to drastically outstrip supply, smart employers will use this latest lockdown as an opportunity to get a small head start on their competitors. But can we expect the war for talent to come to an end any time soon? In my opinion, the answer is no.
The Real Cause of the Talent Shortage
I liken major economic events, such as the GFC and subsequent rebound of the recruitment market, to a rubber ball being dropped then bouncing back up. The ball bounces back a little higher than where it was dropped from.
The current situation, however, is more like that ball being smashed with force into the ground, causing it to ricochet high into the air again with even more speed. Twelve months after the first lockdown, the market is still accelerating over, with no sign of it slowing down.
Everyone knows New Zealand is experiencing a severe shortage of talent, and most employers are blaming this on the closed borders. I don’t share that view. With our borders being closed, we don’t have talent coming in (except Kiwis returning), but on the other hand, we don’t have anyone going out. The only impact resulting from this situation is a rise in salaries. This is because most immigrants will take a lower salary to gain New Zealand experience, and without those people coming in, we are seeing salaries being pushed higher.
So, if we can’t blame the borders, what is it?
Growth. It's simple growth.
A friend of mine recently joined a software development company that has doubled in size over the last two years. This is one of many examples illustrating the way government and private sector organisations are growing at rapid rates, with the demand for talent being the highest it’s even been in my 22 years of recruitment.
How do we overcome this? Most recruiters will tell you the obvious, “Move quickly” or “The candidate is interviewing you, not the other way around” or even “If you like the candidate, offer them at the interview”. However, with the current challenges shaping the market, I worry this may not be enough. In fact, employers may need to fundamentally change what they look for when they hire.
Winning the War for Talent
Now, back to my friend who joined this software development company. He was hired as a Business Analyst. He has never had the title of Business Analyst and technically never been in a pure BA role, but has the right attitude and transferable skills to do the job.
This is what we need to do to overcome the shortage.
According to a 2019 study from Florida State University, there is no significant correlation between an employee’s previous work experience and their performance in a new organisation. This is an important consideration to keep in mind when interviewing – being flexible around hiring requirements and looking at qualities outside of direct experience will significantly increase your chances of securing the talent you need.
One last point. If you are holding out hope that once the borders open up, all our problems will go away, consider this. By the time things go back to semi-normal and we can travel again, we will have three years’ worth of young people leaving New Zealand to go on their OE, pretty much all at once.
Of course, this is just one perspective on a very complex situation. If you’d like more insight into the current employment market, Beyond Recruitment has a webinar coming up on 7 September hosted by Economist Shamubeel Eaqub, who will be discussing New Zealand’s talent shortage crisis, so be sure to keep an eye out for the recording and summary of that event.
To discuss any of these points or for help with your next recruitment drive, feel free to reach out to me.