Lecture/seminar outline

114.709: Managing 1. NZ’s labour market

Employment Relations (ER) 2. influences on the future labour
market
3. the relevance of sector
Week Three: ER in Contemporary 4. some conclusions
Workforces and Workplaces Reading e.g.s
– Statistics NZ (2019) Survey of working life: 2018
Prof. Jane Parker
– MBIE (Labour Group) Quarterly Labour Market
QB Room 3.03
Report, August 2018
Email: [email protected]
– Department of Labour (2008)
– Parker and Arrowsmith (2011)

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1 NZ labour market • labour markets function through the interaction of

workers and employers

• labour economics looks at the suppliers of labour

• let’s start with an exercise: services (workers), the demanders of labour
services (employers), and attempts to understand
the resulting pattern of wages, employment, and
– in pairs/groups, define a ‘labour market’ income

• put another way,

– in your opinion, what characteristics define NZ’s
labour market? Which of these are shared (cross- – demand side (jobs available)
national) features and which are unique? – supply side (people to do the jobs available)
– forces affecting the labour market (e.g. legislation)

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Labour market scorecard example (see handout)

i) key labour market components

Key indicator

• labour demand employment

• labour market matching unemployment rate
• labour supply labour force participation
rate
• labour quality degree holders
• workplace performance high quality jobs
• capital investment fixed capital investment

Source: Department of Labour (2011) Labour Market Scorecard

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Labour market scorecard example (con’td)
Exercise:

Exercise
• think about the implications of the labour market situation
Take a look at the labour market scorecard for May for employers/HR, unions, employees/workers
2016
• what might their respective responses be?
• What main trends and notable points can you
discern? – what key factors might influence their responses?
• Nb: there is an accompanying report at:

• http://www.mbie.govt.nz/info-services/employment-
skills/labour-market-reports/labour-market-
analysis/labour-market-scorecard/may-2016

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Key labour market trends

• (a) employee-oriented flexibility • (b) employer-oriented flexibility

Survey of Working Life 2018 Survey of Working Life 2018

• ½ of employees had flexible work hours, allowing them to start and finish work • nearly 2 out of 5 employees worked in jobs where their hours of work often
at different times each day changed to suit their employer’s needs
• flexitime most common in rental, hiring & real estate services; and • community & personal service workers most likely to have changing hours
professional, scientific & technical services (over 70% of employees) (48%0, then technicians & trades workers (42%)
• those with flexible hours reported higher levels of satisfaction with i) job and ii) • 1 in 6 employees needed to be available to work at certain times – even though
work-life balance than those without they may not end up working
• 9 out of 10 employees could take a few days of unpaid leave if needed to • of them, 41% were paid for some/all of these hours – nb: implications?
• 4 out of 10 employees who worker 30 or more hours a week believed their • 27% employees in accommodation & food services needed to be available
employer would let them drop their hours to less than 30 if needed for non-guaranteed work
• 16% employees had an arrangement to work from home while continuing to be • 42% of employees given less than 4 weeks’ notice of work times; 16% had less
paid than 1 week’s notice
• 22% of parents to a dependent child could be paid for working at homoe
(compared with 14% of non-parents)

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• Anderson (2011) :
• (c) non-standard work times – employment agreements (2008/9) survey of collective
agreements shows most agreements still reflect the normal 40
Survey of Working Life 2018 hour/5 day pattern
– however, the pattern varies considerably between industries (e.g. five
• 67% of employee people worked at non-standard times (outside of 7am-7pm, days’ work over 7 days in retailing and services)
Mon-Fri)
• more than 80% of those in mining, accommodation & food services, and
forestry & fishing worked non-standard hours at least once in 4 weeks • Hampshire (2012):
• Saturdays most frequently worked non-standard time – an increase in part-time and contract employment, although
• least common non-standard time: night work (11pm-5am) many companies have reduced working hours or salaries rather
• people working night shifts most likely to want different hours (35%, compared than making workers redundant
to 12% of people working during the day) – implications? • Nb: MSD (2016): The ratio between full-time and part-time work moved from
• 1 in 5 work non-standard times and experience related difficulties (e.g. sleep or 5.1 in 1986 to 3.7 in 2014, reflecting reducing proportions of full-time
health problems, lack of time with family) employed and increasing proportions of part-time employed

– note: calls to address Zero Hours Contracts (week 2) emphasised by

provisions in the Employment Standards Act (for an overview, see:
http://www.stuff.co.nz/business/better-
business/76622226/Employment-law-shake-up-coming-in-2016)

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 • (e) workplace autonomy
• (d) multiple job holders
Survey of Working Life 2018
Survey of Working Life 2018
• 56% employees felt they had a lot of control over how they do their tasks at work
• nearly 1 in 10 employed NZers have more than one job (222,900 people) • 45% felt they had a lot of control over how their daily work was organised, and 36%
reported having a lot of influence on decision-making that affects their tasks –
• MJHs more likely to work at non-standard times and more frequently implications?
• traditional 40 hour week is uncommon for MJHs (only 5% work it compared • higher levels of workplace autonomy related to higher job satisfaction
to 33% of single job holder) • those with high autonomy had better relationships with their direct manager
• MJHs are less happy with their work-life balance (71% report satisfied or very and colleagues
unsatisfied with it, compared to 76% single job holder) • high autonomy more common among self-employed people (67% reported a lot of
control or influence across three aspects
compared to 24% of employees)
• high autonomy particularly in agriculture,
forestry & fishing (43%), & rental, hiring &
real estate services (50%)
• men more likely to have high level of workplace
autonomy (33%) than women (26%) – why?

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• (f) temporary employees

Survey of Working Life 2018 voluntary exercise: for those interested: see Tucker (2002) for
criteria to determine whether a
• 9% of all employees (201,300 people)
• 48% of temp employees want to continue in temp work (others would prefer a particular employment situation is
permanent job) precarious or not
• most common reason for working in a temp job: unable to find other work (29%),
studies (24%) (see http://www.union.org.nz/wp-
• 1 in 3 temp employees had no leave entitlement; nearly one third had a % added
to their pay instead of annual leave content/uploads/2016/12/CTU-Under-Pressure-Detailed-Report-
• temp employees more likely than permanent employees to have hours change to 2.pdf)
suit the employer
• 53% of temps usually worked less than 30 hours/week in main job (32% wanted to
increase their hours)
• temp employees did less work-related
training, & had less workplace autonomy
• but no difference in job satisfaction levels of
permanent and temp employees

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– mechanisms to support workers in low pay and

casual employment:
• ERA 2000 and supporting legislation:

– social welfare, housing and regional policies

impact on income levels of low paid
– policies supported by strong upward lift in
earnings levels
– attempt to limit inappropriate use of fixed-term
agreements

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 • part-time working • (g) job security and tenure

– defined as less than 30 hours a week in NZ Survey of Working Life 2018

– averaged 419,000 from 1986 until 2019, reaching a high of
• quarter of employee people had been in their job for 10 or more years
554,000 in first quarter of 2018 and low of 264,000 in first quarter • 78% of employers, 55% self-employed and 38% of employees in same job for 5 or
of 1986 more years
– significant feature: around 35% of women and 10% of men work • longest tenure usually in ag, forestry & fishing; manufacturing; and public
part time admin & safety
• workplace autonomy was lower for employees with short job tenure
– can help achieve work-life balance but: • 4% of permanent employees said there was a high chance/almost certain that
they’d lose their job in the next 12 months (another 12% said a medium chance)
• often linked to inferior incomes, benefits, job security and
career opportunities
• problematic in career-building years (late 20s to early 40s) – not
yet over 20% of all women work very short hours (≤20 hours
a week)
• research on industries with high levels of casual and temp.
employment has found shorter hours are often prevalent

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• (h) work-related training • (i) skill mismatch

Survey of Working Life 2018 Survey of Working Life 2018

• 3 out of 4 employees who had done training in the last year had done it on-the-job; • 57% of employees felt their skills match job requirements well
just over half had done a course/study paid for by employer; 7% had paid for a • 35% felt over-skilled for their job; 8% under-skilled
course themselves • 15-24 year olds most likely to report being under-skilled
• of those who’d done training, 7 out of 10 spent five days or less in training • of those who felt under-skilled, two-thirds had trained in the last year
• professionals most likely to have trained in past year • no differences between men and women who felt under-skilled but men slightly
• 25-34 year olds and 45-54 year olds most likely to have trained more likely to feel over-skilled
• those under 24 years most likely to have done on-the-job training • job satisfaction levels lower for under-skilled people

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• (j) pay rises, and earnings differences

• (b) gender pay gap (9.2% in 2018) – second smallest
Average hourly earnings (NZ$) on record and low compared to other countries but
Men Women Total persistent
1991 15.62 12.86 14.47
– in the past, Dept of labour attributed it to 3 key factors:
2000 18.85 15.91 17.56
• position of women in work predominantly in a narrow
band of occupations and job levels
2006 22.96 19.97 21.63
• valuing of jobs where some skills are overlooked and
2013 29.24 24.74 27.48 some have a low value placed on them

2015 30.65 26.53 28.77

• relationship between the structure of paid work and women’s
job choices and progression, especially relating to family
responsibilities
2018 33.58 29.47 31.70
– some specific issues: concentration of women and men in different
occupations, pay setting processes, access to formal and informal
career paths and mgt positions, part-time work, family responsibilities,
Source: Statistics NZ education and training, workplace cultures …

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 Gender pay gap – recent snapshot Recent research (see Ministry for Women, 2017)
• the GPG has generally been decreasing since 1998, but has stalled • using NZ Income Survey data from 2015: 80% of gender pay gap
in the past decade driven by harder to measure factors like conscious and unconscious
• across the public sector, women are underrepresented in senior bias
management, part-timers are disadvantaged and underused, • proportion of the gap that is unexplained becomes larger and more
workplace cultures inhibit women’s full participation & contribution & significant for female employees on higher wages
opportunities for women’s participation & progression limited • relative size of the gap increases for female employees on higher
nb: Pay and Employment Equity (PaEE) Unit, and PaEE investigations incomes
discontinued in 2009

• see also Dixon report (2000):

https://women.govt.nz/sites/public_files/Pay%20Inequality%20bet
ween%20Men%20and%20Women%20in%20New%20Zealand,%20b
y%20Sylvia%20Dixon.pdf

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Videos: Employment outlook 2017-2020 (MBIE, 2018)

• https://www.youtube.com/watch?v=it0EYBBl5LI

• https://www.youtube.com/watch?v=oC1tEqMQQ4A

• https://www.youtube.com/watch?v=SNIkdzwmuVM

Source: MBIE (2018) _

https://www.mbie.govt.nz/dmsdocument/334
3-short-term-employment-forecast-2017-
2020-february-2018-pdf
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Exercise: 2 Influences on NZ’s future labour market

Other labour market developments?

• Department of Labour (2008)

• e.g. feminisation of service industries (8 out of 10 women
workers are employed in a service job – Parker and – population and labour force changes
Arrowsmith 2011) – continuing globalisation
– technology and changing skill requirements
• other trends? In your group, discuss other trends you – climate change and resource pressures
have discerned in the NZ labour market
– Also: MBIE (2018): Quarterly labour market report
(August).

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• (i) population and labour force changes Ratio of the pop’n aged 65+ to the pop’n aged 20-64

– NZ still quite ‘youthful’ but is following other

developed countries with a rising median age for its NZ
What
population
can
you
– slowing labour force growth infer
– more older workers from
this
– greater ethnic diversity chart?
– record participation and employment

Source: Dept of Labour (2008), using OECD and Statistics NZ data

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A comparison of age groups in the next 50 years

(NZ)
Ethnic share of NZ population in 2006 and 2021

European Maori Asian Pasifika

or other
2006 76.8% 14.9% 9.7% 7.2%
2021 71.3% 16.2% 14.5% 9.1%

Source: Statistics NZ Ethnic Population Projections, April 2008, series 6 (2006 base)

Ministry of Social Development (2011)

• in 2016, 46% of 18-24 year olds in NZ will be
(are?) of Maori, Pacific or Asian descent
Source: Johnson, R. (2018)

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National ethnic pop’n projections (2013 base) to 2038

Change in cultural diversity of older population

Source: Stats NZ population projections

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• (ii) continuing globalisation • (iii) technology and changing skill requirements
– pace of technological change / AI
– increase in global labour supply – increasingly educated workforce
– impact on NZ jobs – linking education and training to workforce needs
– more offshoring – workplace training and skills developments
– growing international labour flow – non-standard work arrangements
– pressures to raise labour productivity – changing nature of work
• towards improved labour productivity? – new health and safety concerns

– changing values and aspirations

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• (iv) climate change and resource pressures NZ: Just Transition

– adapting to climate change and reducing emissions • new Just Transitions Unit established to share and coordinate the
work of transitioning NZ to a low emissions economy
– decarbonisation and green skills
• 15,000+ NZers and organisations had a say
– large UK and European literature now on this, as well on the Government’s proposed Zero Carbon
as employer, union and social movement responses Bill (now Act) – zero carbon by 2050 or
sooner (based on UK’s 2008 Climate Change
Act)
• just transition as in fair, equitable and
inclusive
• NZ Council of Trade Unions (2017)
Just Transition: A Working People’s
Response to Climate Change
(October):
http://www.union.org.nz/wp-
content/uploads/2019/02/JustTransition.pdf

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3. The relevance of sector

• DoL conclusions:
(i) Manufacturing
– accelerating economic, social & technological change
• significant pop’n cohorts will more through the workforce with • still a significant employer – 191,000 jobs (Castalia Ltd, 2014)
gradual petering out of LF growth after 2020 – NZ’s largest economic sector; contributes 14.6% of GDP in
• globalisation will sustain large economic shifts, with 2012
implications for competition, offshoring, labour flows – one of the more manufacturing-heavy countries in the OECD

• increased labour productivity will be required to remain • much manufacturing activity related to processing of primary
competitive and compensate for reduced LF growth
resources (e.g. timber) or geographical location or need for
• new tech: continue to drive demand for skill requirements, market proximity (e.g. ¼ mfg jobs in food and beverages
plus increased demand for higher education and more production)
generic skills + more demand for low-skilled service jobs
• evolving nature of work itself • most manufacturing jobs are relatively skilled
• shift away from pure manufacturing to bundling of
• environmental pressures: larger role in tech & skills devt
manufacturing and services
– need understanding of how the sector works and skills it requires
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 Nb: what might constrain the adoption of HPWS
practices in manufacturing?
• important policy and industry concern: productivity (e.g.
Treasury 2008) and HPWS (‘win-win’ scenario for ER
parties, employers and unions) • vagaries of competition and difficult trading conditions
– important practice in HPWS: employee training and – small firms especially
employee participation (e.g. NZ OI Glass)

• as well as HPWS, (Labour) government promoted • where a firm does not comprise groups of employees
workplace ‘partnership’ initiatives (e.g. with EPMU, PSA whose commitment is important
unions)
• dependent on nature of the manufacturing firm

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(ii) Services • forms of control – service industry examples:

– fast food sector: approximates Taylorist manufacturing
• NZ service sector varied, and accounts for most private sector
paradigm yet even in such a highly structured work
employment
environment, there is large variation in management style,
– retailing; wholesale trade; accommodation, cafes and restaurants; workplace culture and the experience of work
personal and other services; cultural and recreational services;
transport, storage and communication; finance; property and business • relates in part to small size of many of these
services workplaces
• despite its diversity, service sector work can be differentiated – hotel and catering sector: cost control generates a
from that in manufacturing: ruthless approach to employee relations with authoritarian
– large number of small firms (low capital reqt, higher % of female management and ready us of dismissal
employment) → higher level of part-time work)
• but some NZ research finds low levels of employee
– usually involves a direct and immediate employee relationship with the stress – why?
customer (implications for managerial approaches to motivation and
control)

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Video: James Cook Hotel

– call centres: c. 27,000 ‘seats’ in 2008 (up 8.5% on
preceding year)

• http://www.youtube.com/deptoflabour#p/u/8/Ty
• early research: ‘white collar factories’ or ‘electronic sweatshops’ but
CY5rIAT70 not all call centres are the same

• some require staff to have a high level of product knowledge and

Questions problem-solving skills, and in these, some evidence of employee
• how has JCH developed its ‘software’ (people)? What involvement, teamwork, commitment to training, better and more
stable pay and choice over working time
prompted this?
• high employee turnover cost has encouraged the industry to offer
• what benefits has this had for JCH? more flexible career opportunities to women (Hunt 2004)

• Would you describe JCH’s measures as ‘good’ ER? • hence, as in manufacturing, organisation and experience
Why/not? of work varies according to contingencies

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• these contingencies include:
Conclusions
– labour market conditions and employee turnover • labour market functions through the interaction of workers
(supply) and employers (demand); its components assessed
– type of business by primary and other indices
– product market niche
• key labour market trends in NZ – meaning for ER
– firm’s financial and management resources
– significant pay rises, earning differences, gender pay gap
• a significant part of the service sector employment is routine, – casual and temporary employment
unsatisfying work that is also insecure, low paid and governed – working time patterns, part-time working
unilaterally by hard-line management (e.g. Web Research
2004) • influences on NZ’s future labour market – meaning for ER

• yet perceptions and experiences of service work differ by – population and labour force changes
different types of employees – continuing globalisation
– technology and changing skill requirements
– climate change and resource pressures

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• significance of sector Next week

– manufacturing: HPWS (employee training and participation),
partnership • REGULATION 1
– service sector: differentiable from manufacturing, issue of • international instruments – nb: centenary year of the ILO >
(employee) control and ER adoption of key Conventions and Declarations
• various practices and perceptions • legislative and institutional frameworks
• tripartism and social dialogue
• the politics of employment
• emphasis of supply-side and demand-side interaction(s), and
thus interaction of initiatives by ER parties • Recommended readings:
– Rasmussen (2009) Ch 10, pp. 289-92
– Rudman (2009) or newer
– Parker et al. (2011)
– de Silva (1997)
– ILO website on conventions and declarations
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