Labour shortfall hits productivity, profits

Bar and restaurant owner Jeremy Stevens has spent $20,000 desperately trying to recruit workers in the past year – and he is still badly short-staffed.

Stevens is one of many of Canterbury employers battling a staffing shortfall that new research says requires thousands of immigrants annually to fix.

Dr David Dyason of Lincoln University has calculated the region will be short of at least 10,000 skilled and unskilled workers annually for the foreseeable future.

Stevens, co-owner of Aikmans Bar and Eatery, Cafe Valentino, and Mr Brightside bar in Christchurch, said he may have to cut back trading at his two central city premises from seven days a week to five.

Stevens said that pre-pandemic, about a third of his staff were in New Zealand on working holiday visas.

He has 63 workers now but needs ‘‘about a dozen more’’. He said he is constantly advertising and recently has turned to recruitment companies, which can cost thousands of dollars.

Staff were hard to keep, he said, and he is having to pay more for less-skilled people with the borders closed.

Dyason’s research on Canterbury’s response to the border closure and Covid pandemic found an inflow of people prepandemic, coupled with the lower economic activity afterwards, had created a labour buffer for the region ‘‘but this is quickly reducing’’. His paper said the ageing population was contributing to the problem of a shrinking workforce.

‘‘For a region that relied heavily on the international labour market, the border restrictions as a result of the Covid-19 pandemic could potentially be disastrous if restrictions remain in the long run,’’ Dyason said.

ChristchurchNZ senior economist Jorge Chang Urrea said the labour shortage was severe in the engineering, tech, health, food and fibre, agri-tech, and manufacturing sectors. The ageing population would mean an estimated shortfall of 50,000 workers until 2030, with the

effects of the closed borders coming on top of that, Urrea said. ‘‘Basically there are not nearly enough skilled workers here. Employers are desperate to find and retain staff, across the board.

‘‘If we don’t have the skilled workforce, it is hammering the productivity of the region. We definitely need migrants and we are lobbying central government to allow workers in.’’

Leeann Watson, chief executive of the Canterbury Employers’ Chamber of Commerce, agreed the region was tens of thousands of workers short even before Covid. ‘‘Now, with the borders being closed and without the same levels of immigration, it is definitely taking an extra toll,’’ she said.

Watson said while hospitality and horticulture had always depended on overseas visitors, a wide range of industries was badly affected. ‘‘Right across all sectors it is having an impact – both the skilled and unskilled workers. The labour shortage is the number one issue we are hearing from employers.

Watson said that while the Government had programmes in the pipeline to boost specific skills, other solutions were needed in the meantime. The temporary working visa extension had made a significant difference but a long-term change in immigration policy was needed, she said.

‘‘The needs are right now. We need international talent, we are just not big enough as a country.’’

A submission from the chamber to the

Government’s Productivity Commission in September called for both vocational education and more flexible migration.

‘‘Productivity loss from labour shortages can impact a business’ ability to operate, let alone focus on future innovation, and can put extra strain on business owners and workers,’’ it said.

Neil Hamilton, general manager of industry body Canterbury Tech, said things were ‘‘very tight’’ for employers in the technical sector. Previously businesses had relied heavily on overseas workers for the most skilled roles.

Hamilton said tech businesses needed to attract more people, and hire and train less experienced staff.

reporting by Marine