Central Otago Labour Market Surveys

Labour Market Survey 2018

A new report on labour issues facing Central Otago's horticulture and viticulture sectors indicates ongoing and intensifying labour challenges.

The report's data came from surveys and interviews with horticulture and viticulture growers during June and July this year. Druce Consulting, who produced a previous survey on the sector in 2015, conducted the 2018 survey.

Central Otago Labour Market Governance Group Chair Stephen Jeffery said the level of response to the survey when calculated against planted hectares was very pleasing and gave "a high level of confidence" in the collated data.

"It's becoming increasingly more important that the surveyed industries and the wider community have an overview of projected growth, not only in planted hectares but also projected labour requirements and accommodation.

"It's encouraging to see further growth in Central Otago's rural economy and crucial that we have good information to understand and plan for the future."

The report revealed plans for 465 hectares of new cherry plantings in the next four-five years (a 56% increase on current plantings), with feasibility studies under way to develop a further 495 hectares of cherries.  There will be new grape plantings of 284 hectares, which is a 14% increase and will bring the total Central Otago vineyard estate to 2275 hectares.

The authors reported optimism among growers but noted continued growth for these sectors was "contingent on solving the labour challenges".

The peak horticulture harvest period will see an increase in labour demand of 1186 workers over the next five years, with predicted viticulture increases for the same period of 123 workers at harvest.

Accommodation provision is a big issue to resolve, with the report predicted an increase of beds to a total of 6198 beds to cater for peak harvest demand by 2021/22 for both sectors. While there is a predicted increase in bed and camping capacity supply of 1615, there is still a forecast shortfall of 2298 beds.

Mr Jeffery said the key thing now was to take the report's data and recommendations and use them to guide action that will bring solutions. This would take a strong concerted effort by growers, stakeholder groups and local and central government, supported by the governance group.

The 2018 report includes 13 recommendations to be driven at a strategic, workplace, training and community level. These include the governance group chair highlighting with officials the need for raising the Regional Seasonal Employment (RSE) cap; improving processing capacity over the Christmas break; and increasing promotion of horticulture and viticulture work opportunities to holiday visa holders. Exploring options for engaging underutilised workers in the community such as older people and parents with young children and allowing more flexible work conditions is another recommendation.

Central Otago Mayor Tim Cadogan said he was struck by the importance of RSE workers and backpackers for our seasonal labour supply.

"I endorse the report's recommendation that we need, as a community, to acknowledge the ongoing value of these groups to our region. Finding ways to celebrate their contribution, making sure we stand out as a great destination in a competitive seasonal labour market and get known as a welcoming and vibrant community, are ways every one of us can help our district prosper."

The survey was funded jointly by the New Zealand Fruitgrowers Charitable Trust, Central Otago Winegrowers Association, Seasonal Solutions Cooperative Ltd, Immigration New Zealand and Central Otago District Council. 

Horticulture and Viticulture 2015

This report on the horticulture and viticulture sectors and indicates a bright future, if certain hurdles can be overcome.

"The Central Otago Labour Market Survey is the clearest and most in-depth picture we have to date of workforce issues for these industries," said John Lane, Chair of the Central Otago Labour Market Governance Group.

The report's development involved both surveying and interviewing horticulture and viticulture growers, and gaining their industry insights on what's working well and what areas have room for improvement. 

"There are lots of positives in the report, including the fact both the horticulture and viticulture industries in Central are on track for moderate to strong growth over the next 10 years, with cherry plantings predicted to increase by 34% over the next five years," Mr Lane said.

"What's very clear from the growers' responses is that they're keen to work in partnership with industry, local and central government to ensure their industries realise their full potential."

While the future looks bright for growers, the report identifies key areas that need to be addressed to cope with a growth in crops and production.  

The report highlights a lack of suitably trained staff and the limited availability of appropriate accommodation as areas that could potentially impact on productivity in the region.

It notes that while New Zealanders and Recognised Seasonal Employer (RSE) workers are the mainstay of both industries, there is a dependence on backpackers as a source of labour at peak times that is a key fragility in the market.  

Commenting on the dependence on backpackers John Allen, Regional Commissioner for the Ministry of Social Development, said "finding work for job-seeking New Zealanders is a priority, especially in an area like Central Otago which is rich with seasonal work opportunities". 

"But we need to work out how we can ensure that New Zealanders who are looking for work have the right training to access jobs in these industries. Based on the findings of this report we look forward to working more closely with these two industries to understand how we can give jobseekers the right preparation to do these jobs." 

Accommodation provision is one of the biggest issues to resolve, with the report predicting labour demand to grow with an additional 600 beds required by 2018/19. 

"The way forward will require employers and the industry to work closely with local and central government to identify solutions," said Mr Lane.

Recommendations in the report include: reviewing training needs; exploring housing options; running workshops on industry best practice; and greater promotion of Central Otago as a seasonal work destination. 

Five Growth Sectors

The report scopes labour issues in five sectors of the Central Otago economy - construction, irrigation, transport, hospitality and agriculture, which are on course for strong growth over the next five years.

“This growth will be driven by intensification of farming, irrigation development, commercial and residential building confidence, growing numbers of international and domestic visitors and growing consumer confidence,” said Chair of the Central Otago Labour Market Governance Group John Lane.

The report was produced after surveying a small number of key employers in five industries – construction, irrigation, transport, hospitality and agriculture – to gain insight into labour market issues in those industries.  

“All five sectors are optimistic and buoyant with an expectation that this will continue in the short and medium term.  Rural growth is in part dependent on future dairy prices and access to reliable sources of water for irrigation,” said Mr Lane.

“The survey also indicates that the impact of poor data communications is being felt in both Alexandra and Cromwell highlighting the need for current UFB and Rural Broadband enhancement projects of the Central Otago District Council,” he said.

While the businesses surveyed generally reported high rates of staff loyalty and retention, all were concerned about their ability to recruit skilled workers.  With strong growth predicted it is unsurprising that there will be increased demand for workers across the five industries surveyed, accentuating the skill shortages already identified.

“Central Otago businesses understand the importance of up-skilling and investing in training of staff,” Mr Lane said.  Although he noted that some businesses think there is room for training providers to work more closely with them on the placement of graduates into work.

In particular the transport and agricultural businesses remarked they would welcome more young people entering their industries. The report suggests this could be encouraged by businesses building better links with schools and the reintroduction of work experience schemes and training cadet schemes.

“Just as we found with our survey of the horticulture and viticulture sectors, some employers surveyed for this report felt there was a shortage in Central Otago of long term rental accommodation, which was impacting on the availability of workers and the ability of firms to recruit,” said Mr Lane.  

The governance group will use the information from both this and the earlier Horticulture and Viticulture report to assist in the development of a Central Otago labour market plan to help the district prepare for future economic growth, Mr Lane said.  

The Central Otago Labour Market Survey reports were commissioned by the Ministry of Social Development and the Central Otago District Council, and were conducted by local business consultants Tara Druce and Martin Anderson.




 
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