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Comprehensive Guide to Skills Shortages and Demand in New Zealand’s Labour Market

Comprehensive Guide to Skills Shortages and Demand in New Zealand's Labour Market

In New Zealand, like in many countries, the labour market is constantly evolving, influenced by economic trends, technological advancements, and demographic shifts. 

One of the critical factors shaping this landscape is the presence of skills shortages and varying demands across industries and regions. 

Understanding these dynamics is essential for both job seekers aiming to enhance their career prospects and employers seeking to attract and retain skilled talent.

What Are Skills Shortages?

Skills shortages occur when there is a gap between the skills employers need and the skills job seekers possess. 

This imbalance can lead to unfilled job vacancies and challenges for businesses looking to grow. 

Identifying which skills are in short supply can provide valuable insights into where job opportunities lie and where individuals might consider upskilling or reskilling.

Factors Contributing to Skills Shortages:
  • Technological Advancements: Rapid changes in technology often outpace the availability of skilled workers, particularly in sectors like IT, cybersecurity, and digital marketing.
  • Demographic Trends: Ageing populations and changing workforce demographics can lead to shortages in specific sectors such as healthcare, where there’s an increasing demand for aged care workers and nurses.
  • Industry Growth: Emerging industries or sectors experiencing rapid expansion may struggle to find enough qualified candidates to meet demand, such as renewable energy or biotechnology.

Understanding Demand in the Labour Market

Demand refers to the need for workers with specific skills or qualifications within various industries and sectors. 

Recognizing where demand is highest can help job seekers target their efforts effectively and enable employers to tailor their recruitment strategies to attract the right talent.

Key Aspects of Demand:
  • Industry-Specific Demand: Different industries experience varying levels of demand depending on economic conditions, consumer preferences, and government policies. For example, the construction industry may experience fluctuations in demand based on infrastructure projects or housing developments.
  • Regional Disparities: Demand for certain skills can vary significantly across regions. Urban areas often have higher demand for technology and professional services, while rural regions may seek skills related to agriculture or tourism.
  • Skill-Level Demand: Beyond specific industries, there is also demand for workers at different skill levels, from entry-level positions to senior management roles. Understanding where your skills fit within this spectrum can guide career decisions and development plans.

Strategies for Job Seekers: How to Navigate Skills Shortages

For individuals looking to capitalise on skills shortages and enhance their employability, proactive strategies can make a significant difference in securing desirable job opportunities.

Practical Steps for Job Seekers:
  • Research In-Demand Skills:
    • Use online job boards, industry reports, and professional networks to identify which skills are currently in high demand.
    • For example, data analytics, artificial intelligence, and project management are consistently sought-after skills across various sectors.
  • Upskilling and Reskilling:
    • Invest in training courses, certifications, or workshops that align with identified skills gaps in your chosen field.
    • Government-funded initiatives and online learning platforms offer accessible options for acquiring new skills without interrupting your current job.
  • Networking and Professional Development:
    • Attend industry events, seminars, and webinars to stay updated on trends and expand your professional network.
    • Join professional associations or online communities related to your field to exchange ideas and job leads with like-minded individuals.
  • Consider Geographic Mobility:
    • Research job markets beyond major cities to uncover opportunities in regions experiencing skills shortages.
    • Rural areas and smaller towns may offer unique advantages such as lower living costs and a better work-life balance.

Strategies for Employers: Attracting and Retaining Talent

Employers play a pivotal role in addressing skills shortages by adopting strategic recruitment practices and fostering a supportive workplace culture that attracts and retains skilled employees.

Effective Recruitment Strategies:

  • Competitive Compensation Packages:
    • Offer competitive salaries and benefits packages to attract top talent in competitive fields.
    • Consider additional perks such as flexible work arrangements, professional development opportunities, and wellness programs to enhance employee satisfaction.
  • Talent Pipeline Development:
    • Collaborate with educational institutions and industry bodies to develop internship programs, apprenticeships, and graduate recruitment initiatives.
    • Investing in future talent not only addresses immediate skills gaps but also ensures a sustainable workforce pipeline.
  • Promote Work-Life Balance:
    • Emphasise a healthy work-life balance through policies that support employee well-being, such as remote work options, childcare support, and mental health resources.
    • A positive workplace culture that values diversity and inclusion can also attract a broader range of candidates with diverse skill sets and perspectives.

Staying Updated and Engaged: The Key to Long-Term Success

In a rapidly changing job market, staying informed and adaptable is crucial for both job seekers and employers. 

Continuous learning and proactive engagement with industry trends can provide a competitive edge and ensure sustained growth and success.

Best Practices for Continuous Improvement:
  • Regular Skills Assessment:
    • Conduct regular skills audits within your organisation to identify emerging needs and areas for development.
    • Encourage employees to participate in ongoing training and professional development programs to keep their skills relevant and up-to-date.
  • Industry Collaboration and Advocacy:
    • Engage with industry associations, government agencies, and educational institutions to advocate for policies that support skills development and workforce planning.
    • Collaborate with peers and competitors through industry forums and working groups to address collective challenges and opportunities.
  • Feedback Loops and Adaptation:
    • Solicit feedback from employees, customers, and stakeholders to identify areas for improvement and innovation.
    • Foster a culture of continuous improvement where feedback is valued and acted upon to drive organisational success and employee satisfaction.
 Shortages and Demand in New Zealand's Labour Market


Navigating skills shortages and demand in New Zealand’s labour market requires a strategic approach and a willingness to adapt to changing conditions. 

Whether you’re a job seeker aiming to enhance your skills or an employer seeking to attract and retain top talent, understanding these dynamics is essential for long-term success.

By leveraging proactive strategies, staying informed about industry trends, and fostering a supportive workplace environment, individuals and organisations can position themselves competitively and contribute to the growth and prosperity of New Zealand’s economy.


What are the main skills in shortage in New Zealand?

The main skills shortages are in skilled trades like construction, engineering, IT and technology roles, healthcare (nurses, doctors), tourism and hospitality workers, and some management/executive roles. 

Specific occupations with shortages include software developers, IT consultants, civil and mechanical engineers, and various construction trades.

How does Immigration New Zealand identify skills shortages?

Immigration New Zealand maintains a “Green List” of highly paid and care workforce roles facing shortages, as well as temporary “Sector Agreements” for lower-paid roles with shortages like transport and construction. 

Previous skill shortage lists from 2019 also indicate areas of demand across sectors like IT, engineering, healthcare, trades, tourism etc.

What causes skills shortages in New Zealand?

Key causes include strong demand from sectors like construction and technology, an ageing workforce, skills mismatch between graduate skills and employer needs, and the “OE” culture where many young New Zealanders travel overseas. 

The COVID-19 pandemic and closed borders also exacerbated some shortages.

How is New Zealand addressing skills shortages?

Strategies include encouraging more vocational training and reskilling programs, increasing immigration for in-demand roles through skilled migrant visas, and efforts by industry groups to promote relevant education pathways. 

However, challenges remain in upskilling the domestic workforce fast enough.

What are the impacts of skills shortages?

Skills shortages can limit productivity and business growth if employers cannot find appropriately skilled staff. 

It can also lead to higher wages in shortage areas to attract workers. 

For individuals, a lack of opportunities in their field can lead to underemployment or having to take lower-skilled roles.