NSEI Final report

Introduction

Purpose

The National Survey of Employment Intentions (NSEI) reports on changes in workforce size and composition, and workplace arrangements, specifically since 22 March 2020. This timeframe was immediately after the government announced the 4-tiered alert level system to help combat COVID-19. On 23 March 2020 the Prime Minister announced that New Zealand had moved to Alert Level 3 and would shortly move to Alert Level 4.

The NSEI is a survey of employers, not of individuals. This differentiates it from surveys that have been conducted among individuals and households, and it provides information from business owners and partners, and managers responsible for employment decisions. The NSEI aims to shed light on what might be happening at workplaces rather than in the economy as a whole, where the official statistics report data at a national or aggregate level.

There are 2 waves of the survey:

• Fieldwork for the first wave was undertaken in September and October 2020, 6 months after the announcement about the COVID-19 alert levels. During this time New Zealand, with the exception of Auckland, was at Alert Level 1. Auckland was at Alert Level 2 for the first half of the fieldwork and moved to Alert Level 1 in October.
• Fieldwork for the second wave was undertaken in March and April 2021, 6 months after the first wave and a year after the original announcement. During this time all of New Zealand was at Alert Level 1.

Research questions

The 2 waves of the NSEI address the following research questions, covering the 2 time periods.

1. What impact has COVID-19 had on staffing levels?
   1. What changes have there been in staff numbers by employment category[1] since 22 March 2020?
   2. What proportion of changes have been due to COVID-19?
   3. How many staff and contractors have left the business and for what reasons?
   4. How many businesses intend to hire staff?
2. Which occupations and skill sets are recruitment difficulties anticipated for?
   1. What occupations and roles are businesses looking to employ?
   2. Do employers anticipate that roles will be hard to recruit, and if so, what will they do about this?
   3. What skills are businesses looking to hire?
   4. Do employers anticipate that there will be a shortage of workers with the skills they require, and if so, why they anticipate a shortage?
3. What changes have there been in workplace arrangements?
   1. What changes have there been in workplace arrangements and are the changes intended to be temporary or permanent?
   2. Have the changes that were anticipated during the first wave been implemented by the time of the second wave, and if not, what are the reasons for this?
   3. What changes have there been in flexible working arrangements, and have flexible working patterns been introduced or extended as a result of COVID-19?

Survey coverage

The NSEI is a survey of employers, not of individuals. The survey covers businesses that employ 1 or more staff in addition to the owner. The sample was sourced from Stats NZ’s New Zealand Business Register and a probability sample was drawn, based on targets for industry groups and number of employees. Businesses with larger numbers of employees (over 20) were oversampled so that there are sufficient numbers to make valid comparisons between business sizes. Results have been weighted by industry and employee size to be representative of New Zealand businesses with 1 or more staff in addition to the owner.

17,000 records were originally received from Stats NZ and of these 80% were successfully telematched (a telephone number was obtained for the business). Of these 13,625, almost two-thirds (8,532 or 63%) provided a contact email address through a pre-calling exercise. These businesses were invited to participate in the first wave of the survey and 24% (2,049 employers) responded to the first wave.

Of these 2,049 employers, just over half agreed to be recontacted for the second wave of the survey and of the 1,085 who agreed to be recontacted, 70% participated in the second wave. In total 759 employers completed the second wave of the survey.

This report

This report has been written for a general, rather than specialised, audience and provides an overall summary of the main findings from the survey. Further information about the way the research was carried out or the survey findings is available on request to: LabourMarketsInsights@mbie.govt.nz

Although the findings are weighted to represent all employers by industry and employee size, the results are based on those employers who responded to the survey. To remind the reader that these are survey results, throughout the report we refer to the employers who responded to the surveys as:

• respondents
• employers
• responding employers, or
• businesses.

Businesses of different sizes, and the employers responding on the business’ behalf are reported as follows:

• Small businesses have 1-5 paid staff
• Medium businesses have 6-19 paid staff
• Small and medium businesses have 1-19 paid staff
• Large businesses have 20 or more staff

Please note that some graphs may not sum to 100% due to rounding of percentages.

Key findings

The National Survey of Employment Intentions (NSEI) reports on changes in workforce size and composition, and workplace arrangements, since 22 March 2020. This was immediately after the Government announced the 4-tiered alert level system to help combat COVID-19. On 23 March 2020 the Prime Minister announced that New Zealand had moved to Alert Level 3 and would shortly move to Alert Level 4.

The NSEI was undertaken in 2 waves. Fieldwork for the first wave was in September and October 2020 and 2,049 employers completed the online survey. The second wave was undertaken in March and April 2021 and 759 of the employers surveyed in the first wave completed the interview. The survey addresses 3 research questions and we have summarised the key findings below.

Research question 1: what impact has COVID-19 had on staffing levels?

The biggest changes in numbers were for full-time permanent staff

The biggest changes in staff numbers since the alert levels were announced on 22 March 2020 were for full-time permanent staff, rather than for part-time permanent staff, casual staff, staff on fixed-term agreements, or contractors.

6 months after the alert level announcement, almost a quarter of the responding employers (23%) stated there had been a decrease in the number of full-time permanent staff and only 7% stated there had been an increase.

However, 1 year after the announcement, while 28% stated there had been a decrease in the number of full-time permanent staff, 18% stated there had been an increase in full-time permanent staff numbers, reflecting a more positive outlook.

Not all changes in staff numbers are attributed to COVID-19

However, not all the changes in staff numbers were attributed by employers to COVID-19. As time has gone on, employers attributed fewer changes (whether they be increases or decreases in the number of staff) to COVID-19. In the September/October 2020 wave, just over a third (36%) of the respondents stated that none of the changes were due to COVID-19, and in March/April 2021 almost a half (46%) of the respondents stated this.

Approximately half the employers might be looking to hire staff within the next 12 months

In both survey waves approximately half the employers stated they would be (or possibly would be) looking to hire staff within the next year, irrespective of staffing increases or decreases to that point. More employers in the second wave (28%) stated they were looking to hire staff ‘right now’, compared to 15% in the first wave. This suggests there was an increasing urgency to hire staff. As would be expected, larger businesses (with 20 or more employees) were more likely to be looking to hire than small and medium sized businesses (with fewer than 20 employees).

Research question 2: which occupations and skills sets do employers anticipate recruitment difficulties for?

Tradespeople were the most frequently mentioned occupational group employers wanted to hire

Employers looking to hire in the next 12 months mentioned the same sought-after occupations in both survey waves. Highest on the list were tradespeople, labourers and process workers, administration and office workers, and sales and marketing staff.

Of the respondents who stated in the first wave that they would like to hire specific occupations within the next 6 months, the following proportions had hired these occupations in that time frame:

• just over half (57%) had hired tradespeople
• more (70%) had hired labourers and process workers
• 77% had hired administration and office staff.

Employers anticipated difficulties in being able to recruit staff

Employers who were looking to recruit anticipated difficulties in being able to do so, and this anticipated difficulty is higher in the second wave. In September/October 2020, 26% believed it was ‘very likely’ they would experience difficulties and 44% did in March/April 2021.

If employers did experience recruitment difficulties, they stated they would consider doing the following:

• using contractors or consultants
• upskilling existing staff
• asking staff to work longer hours.

Personal qualities were the most sought-after occupational skill for staff

The most frequently mentioned skills that employers stated they would like to hire in the next 12 months were:

• personal qualities such as reliability and attention to detail
• trade skills
• customer service
• organisational skills and management, and
• communication and literacy skills.

Approximately half the employers in the September/October 2020 survey wave believed it was likely they, or New Zealand, would face a shortage of occupational skills. The reason most frequently given was that particular industries have relied on overseas workers (and related issues, such as workers requiring visas, immigration issues and border restrictions).

Research question 3: what changes have there been in workplace arrangements?

Many employers reduced work hours for staff, however this was generally a temporary measure

In both survey waves nearly 4 in 10 of the responding employers stated they had reduced work hours for existing staff since March 2020. Almost two-thirds of the employers stated in September/October 2020 that the reduction in work hours was intended to be temporary, and by March/April 2021, nearly three-quarters of these employers stated the situation had changed back to how it was before 22 March 2020.

Reflecting the labour market dynamics at the 2 survey time periods, a greater proportion of respondents in March/April 2021 had hired more staff (28%) or increased work hours for existing staff (14%) than the proportion of respondents indicating this in September/October 2020 (11% and 5% respectively).

There has been an increase in flexible working arrangements, in particular employees working remotely

In the first survey wave 6 months after the introduction of the alert level framework, almost a quarter (24%) of the employers had increased the number of employees who could work remotely (eg could work from home). This percentage had increased to 30% in the second survey wave, a year after the introduction of the alert level framework.

In the second survey wave, a year after the introduction of the alert level framework, respondents were asked whether they had introduced flexible working as a result of COVID-19 related restrictions. 4 types of flexible working options were provided for respondents to comment on:

• flexible work hours
• flexibility of workplace
• flexible weekly/yearly work patterns
• flexibility structured around other interests/responsibilities.

The majority of employers made no changes in these flexible work patterns as a result of COVID-19. The biggest changes were in the flexibility of work hours, where 26% stated they had introduced or extended this flexibility, and in flexibility of workplace (ie the ability to work from out of the workplace), where 22% stated they had introduced or extended workplace flexibility as a result of COVID-19.

In summary

The biggest changes in staff numbers were for full-time permanent staff, and in both the September/October 2020 and March/April 2021 waves the proportion of respondents stating there had a been decrease in numbers was higher than the proportion stating there had been an increase. Reflecting a more positive outlook, there was a rise between the 2 waves (from 7% to 18%) in the proportion who stated there had been an increase.

Some of these changes will reflect normal churn in the labour market and reasonably high proportions of employers stated that none of the changes were due to COVID-19 (in the September/October 2020 wave just over a third, and in the March/April wave almost a half).

In both survey waves approximately half the employers stated they might be looking to hire staff within the next year. More employers in the second wave (28%) stated they were looking to hire staff ‘right now’, compared to 15% in the first wave. This suggests there was an increasing urgency to hire staff.

Tradespeople and labourers/process workers were the most frequently mentioned occupations that employers might be looking to hire, with administration/office staff and sales and marketing the occupations next most sought. There was an increase between the 2 survey waves in the proportions of respondents who anticipated they would experience difficulties recruiting staff. In the first wave approximately half thought it was likely they would have difficulties and in the second wave almost three-quarters did.

Reflecting the occupations employers might be looking to hire, the skills most sought in staff were firstly personal qualities (eg reliable & honest, willing to learn, flexible, personable), then trade skills, customer service, organisational skills & management.

In both survey waves nearly 4 in 10 of the responding employers stated they had reduced work hours for existing staff since March 2020. Almost two-thirds of the employers stated in September/October 2020 that the reduction in work hours was intended to be temporary, and by March/April 2021, nearly three-quarters of these employers stated the situation had changed back to how it was before 22 March 2020.

Reflecting the labour market conditions at the 2 survey time periods, a greater proportion of respondents in March/April 2021 had hired more staff (28%) or increased work hours for existing staff (14%) than the proportion of respondents indicating this in September/October 2020 (11% and 5% respectively).

There has been an increase in flexible working arrangements since 22 March 2020, in particular employees working remotely (eg working from home). In the first survey wave 6 months after the introduction of the alert level framework, almost a quarter (24%) of the employers had increased the number of employees who could work remotely. This percentage had increased to 30% in the second wave a year after the introduction of the alert level framework.

Overall, the findings from the NSEI show the initial very negative expectations about the impact of COVID-19 on the labour market did not eventuate. At 6 months after the alert level announcements, employers were not as pessimistic about the outlook as had been predicted, and after a year many had hired or were looking to hire additional staff within the next year.

[1] These are: full-time permanent staff, part-time permanent staff, casual staff, staff on fixed term agreements, and contractors.

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