Hiring expectations remain steady in New Zealand, however, rising consumer confidence is translating into a more active candidate market and employers should be on high alert to retain key talent and drive current and future productivity and performance, according to the latest Hudson Report: Employment Trends.
Nearly two-thirds of employers (64.5 percent) nationally intend to keep staffing levels steady this quarter, while 28.4 percent intend to employ more people. Consumer confidence is at a 32 month high, and this combined with great summer weather and rising optimism is flowing through to buying decisions.
“In the wake of the GFC employees have been sitting tight in their current roles,” says Roman Rogers, executive general manager, Hudson New Zealand.
“However, increases in consumer confidence mean candidates are now starting to look at their employment options, so we can expect to see more people movement if this positivity continues.”
Nationally, construction, property and engineering has by far the strongest intention to hire, followed by government and financial services/insurance.
“Confidence remains high in the South Island, however clarity around what is required for the Canterbury re-build is reflected in a drop in hiring intentions of 8.4pp this quarter.
“Hiring sentiment in the capital is also positive as the public sector continues to push through large tranches of work against the government’s re-election agenda. This is focused particularly in the area of database integration and the reduction of duplication across various ministries and departments.”
The Report also looks at organisations’ use of High Potential Programmes to build employee capability, retain key talent and drive strong business outcomes. Over half of all employers (59.6 percent) currently have such programmes in place, and this reflects a shift toward businesses recognising that they need to invest in retaining talent.
“Smart employers know the market will regain strength again at some point, and this will result in greater demand and competition for talent assets,” says Mr Rogers.
“Being able to hold onto talent, and accelerate their growth, will enable them to ride the wave of growth as and when it arrives.”
“Increased productivity is still the name of the game for New Zealand businesses. But with the labour market steadying and consumer confidence on the rise, it’s now more important than ever that employers are evaluating and balancing the business needs of their organisation with their approach to talent management.”
“There is often a misconception that High Potential Programmes are high cost, yet the key elements of a successful programme are within reach of most organisations, whether large or small, and an on-going commitment to high potential employees will help mitigate any potential business disruption driven by the changing marketplace.”
Organisations’ biggest challenge is identifying talent. ‘High potential’ is not the same as ‘high performance’ although there is some overlap – 93 percent of all high potentials are also high performers, yet only 29 percent of high performers have high potential. This clearly highlights that being focused on high performance alone will deliver short-term results, but poses risk in the longer term.
“Identifying talent with high potential isn’t easy. Employees must be judged on their potential ability to perform a task they have never done before. In today’s risk-adverse environment this can be challenging, but it is necessary to protect the longer-term talent pipeline of the organisation.”
Hudson has identified four main indicators of high potential – the ability to manage complexity and change; cognitive ability and mental efficiency; personal drive; and relational and cultural sensitivity. Cognitive ability is the principal indicator across all levels, yet New Zealand employers are using prior performance (22.5 percent), attitude (19.0 percent) and career aspirations (13.9 percent) to evaluate high potential. This suggests there is still some confusion and employers may be missing out on identifying some high potential employees.
Useful tools include behavioural and psychometric testing, cognitive ability tests and observation at assessment and development centres. These tools provide objective assessments rather than relying on opinions or any biased views.
To maximise effectiveness, High Potential Programmes need to be consistent and sustained with a clear purpose. The value of the programme can then be evaluated against agreed objectives that may include retaining key staff, filling roles internally, filling roles quickly and the higher performance from high potential employees. Common elements of effective programmes are high touch, individual customisation and mentoring, coaching and exposure to new experiences.
Ultimately, HR and recruitment practices must be continuously assessed to ensure organisations are able to retain the key talent and capability necessary to succeed in the current environment. New Zealand businesses remain focused on productivity and performance, and consistent, sustained High Potential Programmes can and should play a key role in unlocking potential, building a strong talent pipeline and driving successful business outcomes in the long-term.
