The Great Resignation – Are We Waiting for the Tsunami to Hit?
New Zealand is just starting to see evidence of “The Great Resignation” hitting our shores. It’s starting to feel a lot like the aftermath of an offshore earthquake, the Tsunami warnings are sounding, and we are holding our breath to see if it is a false alarm, whilst upping our emergency planning.
Let’s look at what trends and stats are telling us about the NZ Market. Findings from a recent report, stated that New Zealand is enjoying "record-high" labour force participation. Stats NZ released the March Quarter Unemployment Data, confirming the unemployment rate remained at 3.2%, according to Work and Wellbeing Statistics Senior Manager Becky Collett – “one of the lowest recorded since the HLFS series began in 1986”. These results have New Zealand’s Unemployment Rate sitting sixth equal lowest in the OECD.
Whilst the unemployment rate is one measure, a far more useful one for employers, is the rate of underutilisation (a broad measure of the spare capacity in our labour market), with a marginal increase from 9.2% to 9.3% over the March quarter, meaning the actual number of people underutilised rose by 4000 to 280,000. The underutilisation rate includes people in NZ that are unemployed, underemployed and within the potential workforce. Specifically, this could be people working part time, who are available and looking for full time work, or students or retirees who are open to part time work opportunities that fit with their lifestyle requirements. This shows that whilst unemployment is at a record low, there has been an increase in the number of people who could be available for more work, with the right skills, training, development, and investment opportunities.
The Labour Market
So, with unemployment at record lows and wage inflation at record highs, what is the NZ job market doing? If we look to the NZ stats for ‘’Filled Jobs’’, Public Administration & Safety and Construction sectors drove the most growth in the December 21 Quarter. We predict that these stats have remained consistent, and the feedback from the companies we work with is that skilled roles are difficult to fill, and there is a shortage of candidates with Trades backgrounds or Senior Leadership level skills.
The NZ Labour market is tight, with daily stories of businesses looking to alternative options to fill vacancies and candidates commanding significant salaries as potential employers battle to secure them.
Couple this with our borders opening to all vaccinated travellers from 21 June 2022 without the need for COVID testing before arriving in NZ, and the new Employer Accreditation Process with New Zealand Immigration, it’s a coin toss to see if NZ can entice talent into the country or see talent make a shift to overseas. The lure of overseas remuneration offers may become a significant factor as other countries try to fill their own market gaps.
With rising costs of living and media articles that promote employee benefits such as flexible working, NZ organisations need to be clear on what benefits are on offer. A recent report has shown only 33% of employees in New Zealand are satisfied with their current benefits. The top five benefits individuals wanted were:
- Training, either internal or external (57%)
- Over 20 days of annual leave (55%)
- Ongoing learning and development (53%)
- Mental and physical health and well-being programmes (38%)
- Formal career paths (38%)
There are a multitude of articles popping up, providing insight on how to set yourself apart in the war for talent in a tight labour market, ranging from, having structured approaches to remuneration for existing and new employees, to clear policies and procedures for flexible/hybrid working and guides on how to make work life balance a success.
Whilst the first step is to have an offering in place for new and existing employees, the next and more important step is how to clearly articulate that offering to the talent market.
Your Employee Value Proposition
This is where your Employee Value Proposition (known as your EVP) comes in. This is the unique set of offerings an employee receives from your business in exchange for their skills, capabilities, and experience. If this is a new concept for your business, we highly recommend you take the time to identify and invest in your EVP. Whether you have fostered it or not, your EVP exists.
EVPs should be unique to your business and reflect your core values, they should be relevant and compelling to both current employees and those you wish to attract to your business. In a recent article, Stephanie Love (HR Consultant) shared her view on the Employee Hierarchy of Needs, where employee needs fall into three categories:
- Foundational - Your compensation, benefits and wellbeing packages all need to be competitive.
- Experiential - What is the experience going to be working for the organisation? Is there career progression, leadership opportunities and training opportunities?
- Emotional - Does your company have a purpose, do your employees value that purpose?
EVPS need to be effectively communicated if it is to be a key driver of talent attraction, engagement, and retention,” added Love.
The psychologist, Frederick Herzberg, studying job satisfaction in the 60s classified hygienic or motivation factors, and much theory is based on this today. Motivation factors increase job satisfaction while the presence of hygiene factors prevent job dissatisfaction. Motivation factors included the presence of achievement recognition, interesting work, clear responsibilities, opportunity for progression and development. Hygiene factors – more likely to create turnover – included: incompatible Company policies, poor leadership, lack of status, lack of security, unfavourable work conditions, and failure to meet core remuneration expectations.
So, what should you be thinking about in your EVP and what can you add to your emergency survival kit in preparation for the Great Resignation Wave, here’s our suggestions:
Tips for being ahead of the Great Resignation Wave:
Attraction and Recruitment:
- Ensure you capture talented, interested people right from the beginning. Refine your employee value proposition, and candidate experience, and keep candidates informed.
- It’s important to get Recruitment right first time, consider tools and assessments that will help you determine team and role fit of candidates.
- Are your role adverts true representations of what it is like to work in your business? No-one wins when you dress up your roles/business to be more attractive to talent and misrepresent the role or company in the process.
- Your current employees are also your best advocates in the marketplace. Utilise tools like Employee Confidence Surveys to gauge whether your employees are onboard with your future direction, can provide powerful insights.
- A well-designed employee referral scheme is a great recruitment tool. It’s important to consider what steps you may adjust in your recruitment process in recognition of trusting a recommendation from an existing employee.
Ways of Working:
- Expand your horizons, be open to different work approaches, e.g., would job-shares work in your business? With part time roles better suiting working parents, students with the ability to work adhoc hours or those easing into retirement, then finding alternatives like job-sharing arrangements can increase the quality and quantity of talent available to you.
- Flexibility and hybrid work arrangements look here to stay. Whilst it can be a draw card for candidates, it may also be a “saving grace” with your existing team. At the very least be open to conversations with your team about their needs and wants and clearly communicate business reasons if flexible arrangements can’t be met.
- Where you are embracing hybrid and flexible working, it’s even more important to make time to connect either online or in person with your team, whether it be online lunch catch ups, to Friday night drinks or weekly buddy calls.
Reward, Recognition, and Investment:
- Health and Wellness is “in”, taking a good look at your wellbeing offering and taking steps to show your team members that their wellness is important to you, goes a long way. We are seeing a trend in more companies extending wellbeing to include looking out for employee’s financial wellbeing (which for many, has taken a hammering through the Pandemic).
- Everyone likes to see their hard work and effort recognised and rewarded. Look at non-monetary ways to recognise your team members, additional time off, thank you notes, shared morning teas etc. Everyone likes to feel appreciated.
- Never has there been a more pressing reason to have a structure/framework to support your pay decisions (base pay and any incentives), based on reliable and validated benchmarking data. Just be clear where a manager can flex within the framework and where consistent approaches must apply, to ensure you are closing any pay equity gaps across the business.
Connection and Growth:
- Investing in the training and development of your existing team, employees who are given opportunities for growth and development or career advancement are more likely to stay with your company.
- “Re-induction” investing in the same level of support for promoted employees or employees returning from significant periods of leave or absence from the business (parental leave, post-accident/illness leave, sabbaticals) to help them assimilate back into work, as you provide for new employees settling in.
- Employees with a strong connection to their employer are more likely to be engaged. Get involved in regular 2-way communication methods.
- Invest in developing effective teamwork across your business, issues can exist in any team, and flexible/hybrid working can add a new layer of complexity. Agree as a team:
- What you are there to achieve
- Your collective performance goals and which ones are only achievable by working interdependently.
- What actions you will commit to.
- How your success on each goal is measured.
- How you will communicate with each other – both in sharing successes and challenges with each other.
- Review your policies and procedures, do they reflect the culture and decision making that you are fostering in your business, have you considered the diversity of your employees and how to make policies and procedures more inclusive to all.