The food and beverage manufacturing skills gap will grow by 38 percent, reaching 40,000 workers by 2028 if the industry is unchecked. Disruptions caused by Covid, immigration policy settings, supply chains and the international labour market are the causes, according to research commissioned by Hanga-Aro-Rau, the Manufacturing, Engineering and Logistics Workforce Development Council.
The sector currently accounts for nearly 40 percent of the manufacturing industry’s GDP. The most challenging skill to fill in the industry is understanding connecting equipment and industrial control software. A growing need for cultural and language skills was also highlighted.
Employment rates among ethnic groups have changed, with the participation of Maori and Pacific peoples in the industry dropping 25 percent lower than pre-Covid levels. Researchers found that Maori and Pacific workers are less likely than other ethnicities to complete training of find work following the completion of their training.
“We know that Maori and Pacific workers will pass knowledge down through to the younger generations within the workplace. They are also an essential referrer to the industry, and it is common to see extended whanau working within the same firm for decades. When this link is broken, and an individual leaves the industry, the impact on the sector can be far more widespread reducing the pool of potential workers from future generations,” said Phil Alexander-Crawford, deputy CEO of Hanga-Aro-Rau.
The study also found that the domestic workforce cannot reduce the shortfall if net migration does not return to pre-Covid levels.
“Historically, around a quarter of skilled labour needs in manufacturing and engineering are met by migrants. By 2028 we will need 463,000 workers in key regions around the country. However, based on current trends, a skills shortfall of over 40,000 is set to constrain future manufacturing output. We need to begin work immediately to reduce barriers preventing the development of an equitable domestic workforce.”
“It is not uncommon for manufacturers to be facing a 15 percent shortfall in their current workforce. Up until around 12 months ago, this was mainly at the higher skill levels; however, this has now grown to include semi-skilled labour as well. A large part of New Zealand’s manufacturing and engineering sector does not operate in the high-volume, low-value production of consumer goods. They’re typically SMEs who are dominant in a small niche of the capital goods business and have longstanding relationships with relatively few customers. When you’ve had good relations with customers for 20 years, and you have to tell them you can’t fill any orders until the end of next year, and you are losing customers as a result, this is a serious blow to a business of this size,” said Dieter Adam, NZ Manufacturers and Exporters Association CEO.
To support the current situation, manufacturers must break down training barriers that prevent diverse cultural backgrounds from participating and upskilling existing staff. Incorporating more shift flexibility is also encouraged to draw more females and young people into the workforce.
“New initiatives which reinforce the attractiveness of the sector and increase workforce participation in training are needed to reduce the skilled labour shortage - particularly within key demographics such as Maori, Pacific, disabled people and females, who are underrepresented in these industries,” said Alexander-Crawford.
“Our estimates show that there is a significant workforce capability and capacity gap of up to 17,000 manufacturing roles and 12,000 engineering roles, and the size of this gap is likely to increase if current trends persist. This capacity and capability gap is putting upwards pressure on the cost of labour and risks constraining output,” said John Tan, partner at Deloitte.
