Employers show signs of putting axe away

By Tamsyn Parker

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New Zealand’s employment market appears to be stabilising, according to a report by recruitment agency Hudson. The agency’s quarterly survey found employers are shifting away from reducing headcounts towards holding staff numbers steady.

Employers intending to reduce their permanent staff levels fell from 23.7 per cent to 15.3 per cent while those wanting to hold present levels over the next three months grew from 64 per cent to 68.8 per cent. Employer sentiment also shifted into slightly positive territory after the number of companies wanting to increase staff grew from 12.4 per cent to 15.9 per cent.

Hudson executive general manager Marc Burrage said there had been a lot of change among New Zealand businesses in recent months and some who had made tough decisions early were starting to recover. “While I don’t want to under-estimate the impact of external factors, the market recovery seems to be stabilising.”

Burrage said many employers were reluctant to make further cuts because of the impact on staff morale, brand reputation and customer relationships. 

Some were beginning to take on more temporary staff to manage the workload, which also allowed them to be flexible if the market did step back. But the recovery of employer sentiment is very sector-dependent. The report found sentiment in the construction and property sector continued to fall, dropping a further 1.7 percentage points to -17.5.

Tourism had the biggest improvement, jumping up 21.5 percentage points but remains the most negative industry at -22.2 per cent. Barrage said many tourism employers were intending to reduce permanent staff as a result of fewer New Zealanders travelling overseas and a drop in discretionary incomes. Government employment expectations have stabilised while IT companies remain far more positive than any other sector.

Regionally the Upper North Island remains the weakest in terms of hiring expectations. While sentiment improved in the Upper North Island it remains negative at -3.3 per cent. A net 5.6 per cent of employers in the lower half of the North Island intend to hire staff while 2.1 per cent of South Island employers want to.

Large companies remain the most negative, with a net 2.2 per cent intending to reduce staff, compared with the net 3 per cent of medium businesses and net 9 per cent of small businesses which intend to hire staff. Meanwhile a survey by human resource consultants Mercer found Australasian businesses were still planning to make job cuts but they would be smaller.

Of the 88 companies spoken to 57 per cent said they would make cuts but only 1.2 per cent planned to cut more than 10 per cent of the workforce.