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Employers taking a 'Steady as she goes' approach to hiring, according to Hudson Employment Expectations report

Wednesday 6 October 2010, 10:47AM

By Daniel Fielding

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National Permanent employment expectation
National Permanent employment expectation Credit: Daniel Fielding

AUCKLAND

While one in five New Zealand employers intend to increase their permanent headcount in the forthcoming quarter, the majority are planning on keeping current headcounts steady, according to the Hudson Report Employment Expectations Survey.

The Report shows a net 19.8% of businesses intend to increase their permanent headcount during October to December 2010, down 0.5 percent points (pp) from the previous quarter.

“This slight dip is on the back of five quarters of growth in positive sentiment so we shouldn’t be overly concerned by these results. It’s widely accepted that our road to economic recovery will be a slow and gradual affair, rather than a rapid rise to prosperity,” said Marc Burrage, Executive General Manager, Hudson New Zealand.

“The Hudson Report was undertaken before the Canterbury earthquake and ongoing impact of this event remains unclear. In the immediate term, particularly in the Canterbury region, hiring is very likely to be on hold while businesses assess the impact of the quake and work to resume normal operations,” said Burrage.

South Island employers’ hiring expectations had softened before the earthquake hit, with employers reporting the first decline in sentiment in 18 months (down 12.1pp to 22.4%). This is likely to have been influenced by the collapse of South Canterbury Finance and a low in new manufacturing orders. Sentiment in the lower North Island also declined by 3.8pp to 13.1%. This is largely being driven by continued restructuring within central Government departments. Meanwhile, upper North Island employers reported an increase in sentiment with a net 22.4% of employers intending to boost their staff numbers during the next quarter.

This quarter again sees strong employer intentions to increase the size of their contracting/temporary workforce (an increase of 1.7pp to a net 14.9%). This represents the strongest result in contracting/temporary hiring expectations since the second half of 2007.

“The continued increase in businesses intending to hire contracting/temporary employees is a positive trend as traditionally, this has been an indicator of improving economic conditions. Now more than ever, employers are appreciating the flexibility that a contract/temporary employee provides – it’s also good news for the increasing number of skilled professionals who are opting for contracting careers,” says Burrage.

All industries reported a positive sentiment for a fifth consecutive quarter with the exception of the government sector which is focused on increasing cost efficiencies. About half of the industries surveyed reported lower levels of optimism compared to the previous quarter, including construction/property/engineering, financial services, professional services, manufacturing, IT and FMCG.

Meanwhile, telecommunications, private healthcare, retail and education were more positive in their outlook compared to the July to September quarter.

“Sentiment in the telecommunications sector jumped by 33.8pp with 18% of employers intending to increase staffing levels which is likely to have been influenced by the Government’s Ultra Fast Broadband initiative, and while the IT sector was down slightly, sentiment remains at its highest level since 2008,” said Burrage.

The retail sector’s increase in sentiment of 5.9pp to 13.3% is likely to have been influenced by an improvement in retail sales across the June 2010 quarter, although tempered by the impending GST increase in October.

“What is clear from this quarter’s report is that employers remain cautious and are looking to rebuild their teams in a considered way, rather than making dramatic changes.”