ENGINEERING. Talent insights. Critical roles, skills and salaries to shape your team in 2017

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1 ENGINEERING Talent insights Critical roles, skills and salaries to shape your team in 2017

2 The business context: Change is the new normal Organisations are under pressure from both internal and external factors, according to data from a Hudson survey of employers in New Zealand. Employers name their top 5 challenges for: The business 1 2 Increased customer demands Improving the digital customer experience 3 Compliance/regulation burdens 4 Increasing speed to market of new products and services The need to move faster Across New Zealand, employers have nominated that the main challenges for their organisations are driven by customers. In a digitally connected world, customers demand more immediacy and personalisation. Businesses must innovate or risk being bypassed by more agile competitors. 5 Collecting and analysing data Hudson research Nov 2016: employers, New Zealand 2

3 The workplace 1 2 Organisation or team restructures Implementing new technology platforms 3 Cultural transformation 4 New approaches to managing projects, eg Agile 5 Budget cuts The team Keeping employees engaged and motivated Retaining top performing staff Helping staff adapt to change Improving employee performance Technology leading to specialisation In response to the need to move faster and meet customer demands, organisations in New Zealand are undergoing restructures and are implementing new technology platforms, in the midst of cultural transformation. In the engineering space, technology is changing rapidly and teams are required to train or hire engineers who can work with specific software and technology platforms. This is making recruitment more difficult, as employers are seeking people with an increasingly specific set of experience and skills. Keeping spirits up In the midst of change, employees can become frustrated and disengaged. The number one challenge cited by managers is keeping their employees engaged and motivated, closely followed by staff retention, as they try to keep their top performers. With employers under pressure to manage through change, hiring is an opportunity to bring in people with a positive and adaptable mindset. Upskilling employees Employers are looking for highly specialised and specific skillsets, and it can be faster to hire people who don't need any training than to upskill your current team. However, this can make it harder to retain top employees, who may look elsewhere for career development opportunities. 5 Upskilling staff 3

4 The demand for talent: Hiring intentions continue to increase NZ permanent hiring expectations: net effect (%) increase 38.5 % maintain 54.9 % Permanent hiring expectations: net effect (% of employers intending to increase headcount minus % of employers intending to decrease headcount). decrease 6.6 % 2017 For the last 10 years, Hudson has taken the pulse on employers' intention to hire. In H1 2017, the net hiring effect is heading upwards after remaining steady in In particular, hiring intentions have jumped significantly in the North Island compared to six months ago, while Christchurch remains strong despite easing slightly from the very strong numbers throughout With a strong economy and positive outlook, hiring intentions in New Zealand have continued to rise, and based on the economic outlook from the Reserve Bank and other economic commentators, strong employment conditions look set to continue. The Reserve Bank forecasts that in the absence of major unanticipated negative events (such as earthquakes), prospects look good for continued strong economic growth over the next 18 months. 1 The bank predicts that the unemployment rate will continue to decline and gross domestic product (GDP) should grow by around 3.75%, driven by construction spending, continued record migration levels, and tourism. 2 Some economic commentators have been concerned about a possible correction to the strong NZ dollar and booming house prices, however ANZ Bank economists say this seems unlikely given the continued underlying strength of the economy. 3 1, 2 New Zealand Reserve Bank Monetary Policy Statement, November ANZ Economic Outlook, October

5 Christchurch and Wellington lead hiring demand 40.8 % Christchurch 36.7 % Auckland Permanent hiring expectations: % of employers increasing headcount by region. 40 % Wellington With 93% of New Zealand employers either increasing or maintaining headcount, the competition for talent in 2017 is set to be highly competitive. Hiring intentions in New Zealand are strong, driven by a robust economy and prospects of continued economic strength in Roman Rogers Regional General Manager Recruitment New Zealand 5

6 Planning for your team: Feeling the talent pinch Employers are looking for people with the right technical and soft skills, as well as cultural fit for their team. How hard is it to find the talent that you need? of New Zealand employers intend to increase or 93 % maintain headcount Main hiring challenges but more than 1 in 3 say it's harder to find top talent than it was a year ago Finding candidates with the right cultural fit for your team Finding candidates with the relevant technical skills Finding candidates with the relevant soft skills Getting budget approval for a new/ replacement role Assessing candidates Hudson research Nov 2016: employers, New Zealand 6

7 Top 5 in demand: Technical skills CNC Maintenance Hybrid Mechanical and Electrical Engineering Lean Manufacturing, 5s, Continuous Improvement Hydraulics and Welding Tool making and Die-casting Soft skills Driving and managing change Innovative thinking Critical thinking Resilience Roles Engineering/Manufacturing Manager Maintenance Engineer Design Engineer Sales Engineer Production Manager/Supervisor Drive for results Demand for engineers is high Hiring intent among engineering employers is high for 2017, especially within manufacturing in the mid to senior levels. While this signals confidence from organisations that they expect to grow, it also heralds a potential rush for a very specific pool of candidates. Employers risk missing out on top talent Engineering employers are tending to take a black-and-white approach to hiring, looking for candidates who meet the precise criteria for a job role, and rarely taking a chance on candidates who have most but not all required skills. As a result, organisations are potentially missing out on strong talent, who could upskill quickly and add value in a fast-changing business world. To avoid this blindspot, hiring managers should look beyond the CV and consider transferable skills and capabilities such as the ability to drive and manage change. A generational skills gap Much of the engineering workforce is approaching retirement age, presenting a challenge for employers who are looking for mid-level and senior management professionals. After the Christchurch earthquake of 2011, we've seen people at the start of their engineering careers gravitating more towards the construction industry because of the huge demand and a resulting gap in the number of candidates available who are five years into their career. Employers are finding it harder and harder to find people with the experience they need to build the bench strength of their organisation. Talent pool shrinking With their laser focus on specific capabilities combined with competition for talent in the international market, the talent pool available to engineering employers is small. While some employers have realised that they need to evolve their employer value proposition, and create really compelling offers including, for instance, relocation packages or matching overseas salaries others are still expecting top talent to come to them. 7

8 Beyond the job ad: Winning strategies to source today's best talent The majority of New Zealand professionals are passive job seekers and consider themselves open to new opportunities, rather than actively looking for jobs. This signals a shift in the way that employers should approach sourcing top talent. They need to look beyond reactive job ads to get the best candidates in the market, not just the best available at the time. 46 % are open to new opportunities 41% Actively seeking 22% Passive/open to opportunities 35% 46% 24% Planning to stay 33% H H H H H H A large number of potential hires might be interested in a role but aren't actively looking for jobs. 8 Hudson research Nov 2016: employees, New Zealand

9 Strategic sourcing for the best talent 1. Plan ahead Successful sourcing is built on knowing the roles you need, the talent you want and when you ll need it. Identify business critical and hard-to-fill roles, plus roles with high turnover. 2. Know who you want Develop a profile of the people you need, starting with their skills, competencies and experience. Then look beyond technical knowledge to consider motivations and cultural fit. 3. Be where your talent is There s an abundance of sourcing channels blogs, SEO, events, referrals, networking, associations, LinkedIn, video, traditional media, online advertising, job boards, databases and your next great candidate could be attracted through any of them. They could even be already within your organisation. 4. Sell a compelling employee value proposition (EVP) Understand what your target audience wants, then create an appealing employment offering that engages candidates throughout the hiring process. With job interviews an increasingly twoway street, candidates care about issues like social responsibility, flexible work options, diversity and corporate culture. 5. Access a talent pool Having ready access to a pool of qualified candidates will maximise your chances of finding top talent quickly when roles become available. 9

10 Attracting talent: What are job seekers looking for? Hudson's research shows that the majority of employees surveyed in New Zealand are most attracted to roles in companies where the work environment suits them, with enough flexibility for a good work/life balance and challenges to keep them motivated. What attracts job seekers to a company Work environment Work/life balance Challenging role Advancement 5 opportunity Chance to make a difference Ensure you have a compelling EVP Be clear about your employee value proposition. Only a compelling offer will lure top talent. If you can't offer the best salaries, ensure you have a compelling narrative about why people would want to work at your organisation. Hudson candidate engagement research 2016, New Zealand Just like employers look for good cultural fit, candidates are looking for a work environment that suits them. 10

11 Nurturing potential hires: Personalised communication is key Continuous engagement is essential to developing a relationship with a potential hire, even when a role is not yet available. When asked which channels were the most effective for engaging their interest, New Zealand professionals showed clear preferences. The best methods of continually engaging with prospective candidates: Professionals don't want you to reinvent the wheel when it comes to contacting them. Overwhelmingly, they prefer the tried and true methods of phone and % via personalised 49 % via company website 91 % via phone call 40 % via LinkedIn InMail Maintaining good relationships Ensure you provide a personalised, positive and consistent experience for candidates, from the point of initially engaging with them right through to the job offer. Hudson candidate engagement research 2016, New Zealand 11

12 The hiring process: A crucial factor in securing top talent A good quality hiring process is a chance to demonstrate your employee value proposition and is fundamental to a strong employer brand. If it's a disorganised or disengaging process, employees will assume that it reflects the workplace and steer clear. 85 % of New Zealand professionals believe that the experience with an organisation's job application and interview process is important when deciding to join a company The top 5 important aspects during the application and interview experience 1 Understanding the details of the position requirements Ongoing communication about application status Knowing the next steps in the process A reasonable time frame for a final decision Ease of application submission Hudson candidate engagement research 2016, New Zealand 12

13 Remuneration: Underpaid and underappreciated? Getting salary right is an essential part of the equation for hiring managers as they cope with the challenge of engaging and motivating employees. If people are feeling underpaid, they may also be feeling underappreciated. The answer? Communication and transparency. 39 % How much has your base salary increased by in 2016? 49 % Of those who received an increase, 77 % of New Zealand employees feel they are underpaid received no increase received an increase of 1-5% Ensuring salary satisfaction Refer to up-to-date salary data and clearly communicate that when making a salary offer to ensure continued engagement and job satisfaction. Alternatives to pay rises Employees say they would be willing to swap a pay rise for: 1. More annual leave 2. Bonuses and incentives 3. Flexible work conditions The Hudson Report: Forward Focus 2016 Hudson research Nov 2016: employees, New Zealand 13

14 Salary guide: Engineering Permanent Roles - Annual base salary 2017 NZD '000 Electrical Electrical Designer Electrical Drafter Electrical Engineer/PE Mechanical Mechanical Design Engineer Mechanical Drafter Mechanical Engineer/PE Maintenance Engineer This salary guide is a compilation of salary and market information provided by Hudson consultants, clients, candidates and other sources across New Zealand. Information was gathered by drawing on the extensive knowledge of our specialist recruitment consultants across Hudson s specialist practice groups. Salary ranges are approximate guides only. They relate to base salaries and exclude superannuation/ bonuses/incentive schemes/stock options. Chemical Engineer/PE Process Engineer Structural Engineer Management General Manager Engineering Manager Maintenance Manager Design Manager

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16 Methodology Hudson undertook quantitative research with hiring managers and employees across New Zealand to analyse the talent landscape and provide insights on what employers might expect in 2017 and beyond. We canvassed the views of 1,529 New Zealand employers and employees in November From these findings we developed this report a combination of the survey findings and Hudson's specialist insights on the hiring landscape. We have also included data and insights from Hudson quantitative and qualitative research of 3,555 candidates from the Asia Pacific region undertaken in H to better understand the way that job seekers engage with recruiters and the job selection process. Percentages don't always total 100% as respondents could select more than one option for certain questions. Hudson Engineering Hudson's specialist recruitment consultants have the in-depth market knowledge of salaries, job titles and hiring trends to ensure you achieve the best outcome for your organisation at the appropriate remuneration. We build highly nurtured and engaged pools of select talent so you can find the right person quickly. This means greater speed and precision in placements, and higher satisfaction for both clients and candidates. Our proprietary assessment tools and techniques will help you find candidates with the right technical skills and capabilities for the role and for your team, so you can achieve higher performance and superior business results. nz.hudson.com