Nigel Tutt Chief Executive of Priority One

As readers will know, the economic environment for our country has changed significantly in 2022. Covid-19 uncertainty has been replaced by concern about inflation and the corresponding increase to interest rates, meaning households have a dramatically different outlook to what we have become used to. For businesses, by far the main issue we hear about is lack of available workforce – this is our number one barrier to growth of our economy at present.

In the past few decades Aotearoa businesses have become used to having human resources on tap. Immigration has been a handy way of keeping our export industries in growth mode – advantageous for any economy. Our population growth has corresponded with the growth of our economy and the businesses within it.

That environment has changed a lot in a short space of time. During the past few years, immigration had increasingly become a source of policy contention due to concerns over infrastructure provision, housing availability, exploitation and taking jobs from Kiwis. This was all brought to a halt anyway with Covid-19-induced border closings, and a reopening that's been slow at best. As a result, businesses find themselves very short on staff – best shown in a very low unemployment rate.

Scarcely believable

Economic statistics for the last quarter show unemployment at 2.9 per cent for the Western Bay of Plenty, with New Zealand at 3.2 per cent. These are scarcely believable figures and well below the average unemployment rate for the last 20 years in our region of 4.8 per cent, a figure that tends to fluctuate only by a percentage point at best.

Employers are facing increased competition from other countries that roll out the red carpet for new talent, pay more than NZ and have lower living costs. We've been late to open the borders, confused about matching immigrants will skill needs and slow processing visas – collectively this puts our businesses at a disadvantage.

All of this means businesses face serious concerns about a lack of staff, which means they're likely to be more conservative about growth opportunities in future and are very concerned about retaining the staff they have. There is increased competition within the BOP businesses for talent, which increases earnings and cost of business alike.

More flexible

On the positive side, we've seen many employers become a lot more flexible in their work practices and hiring policies. That may involve better pay, conditions, flexibility and benefits. A number of employers are also keen to give employees a chance where they may not have before, helping people get into work that might not have been there for a while. Lastly, they'll look for ways to grow their businesses without dependence on people – hopefully improving our productivity as a nation and setting us up better for the future.