Worker shortage threatens ‘construction boom’
The NZ building and construction sector is set to lead New Zealand’s economic recovery, according to the New Zealand Chinese Building Industry Association (NZCBIA), if it can fix issues with a shortage of skilled workers and high job turnover across the industry.
According to a new report, commissioned by the New Zealand Chinese Building Industry Association (NZCBIA), in 2022, almost 40% of the workforce had less than a year of experience in the industry. Additionally, in 2023, it shows that over 90% of new entrants came from outside the sector.
NZCBIA president Frank Xu says while the economic outlook for the industry is positive, the findings show there is work to be done.
“Building and construction is a $99 billion industry which supports 576,000 jobs across New Zealand. The pipeline for new construction projects needs to be better planned to ensure the stability of the industry and the new Government needs to continue with clearing regulatory hurdles for getting projects underway.
“This report shows that we have issues with our construction industry workforce that we must address to strengthen the sector. Biggest are the issues of employee churn and our need to train more skilled people,” says Xu.
The report, authored by economist Shamubeel Eaqub, also identifies issues with poor public perception of the construction industry, which is attributed to long-standing productivity issues in the sector. Xu says the same problem of stalled productivity in the construction industry is apparent across the OECD.
‘We’ve had 30 years of stalled progress, but this is not unique to New Zealand with many comparable countries facing similar productivity challenges. We’re in the middle of the OECD pack, but the report points to how we can do better,” he says.
To address issues with productivity and skilled worker shortages, the report calls for New Zealand firms to ramp up frontline training and micro-training to build workforce skills and retain people and knowledge in the industry.
TK Yong from Auckland-based Livefirm Construction says their dedicated training programmes for workers have significantly improved both employee retention and productivity.
“We’ve been investing in upskilling our carpenters for many years, and we’ve seen huge benefits for us as a company and for our workers themselves.
From a cost-benefit perspective, improving skills is highly beneficial for the company. The investment in skill development yields substantial returns. Our employees gain valuable knowledge, experience greater income progression, and are more likely to remain with us longer.
“Industry-wide, more dedicated training systems and resources to upskill people will go a long way
to reducing turnover and boosting the speed, quality, and productivity of our national workforce,”
Yong says.