26 minute read
Special Report
Exile on Main Street
IMPACT: Gore has lent heavily on migrants to fill the worker shortage and is home to 45 ethnicities, but Mayor Tracy Hicks is confident as large urban centres become too costly, New Zealanders will be lured south by opportunity, high wages, lower living and housing costs. Photo: Natwick
This week, Farmers Weekly journalists Richard Rennie and Neal Wallace investigate how two different districts, Opotiki and Gore, are trying to encourage new workers and address an ageing workforce while facing a static or falling population.
Neal Wallace neal.wallace@globalhq.co.nz
NEW Zealand’s rural-led economic recovery is being hamstrung by a shortage of working-age staff, an inability to retain people and intergenerational social issues.
Some rural districts already struggling for staff face even greater labour challenges in the coming years if demographic predictions prove accurate.
Work by retired University of Waikato demography professor Dr Natalie Jackson is forecasting that in the next decade 75% of the country’s regional authorities will experience a decline in their working age population as young people either leave for bigger urban centres or are not being born.
The primary sector worker shortage is extensive: 4000 dairy workers, hundreds of truck drivers, 2000 meat workers, 200 agriculture contractors and up to 10,000 in horticulture.
Rural depopulation could be accentuated, with predictions 50,000 people could leave NZ now borders have reopened.
Jackson predicts Opotiki in the Eastern Bay of Plenty and Gore in Southland will experience population losses of 7% and 3% respectively in the coming decade, impacting growth aspirations.
For Opotiki this comes as the district builds a more diverse primary sector, looking beyond traditional pastoral and forestry to the sea and horticulture for income generation for iwi and investors.
In Gore the employment challenge is largely about maintaining business as usual, sustaining and processing the dairy, sheep, meat, wool and cropping industries.
Pre-covid that shortfall would have been filled by migrants, but a combination of closed borders and a government immigration reset tightening access to foreign workers and elevating the wages that have to be paid has curtailed migrant numbers.
Absenteeism is a growing issue among the meat and horticulture sectors with employers claiming the granting of a fifth week of sick leave is being treated by some as annual leave.
On any one day, 15% of meat workers will be absent with that figure blowing out to 25% of staff in some departments.
Along with the existing worker shortage, meat companies have been unable to further process meat and fruit has been left unpicked.
An unemployment rate of 3.2% for the first quarter of 2022 indicates the NZ labour market is “extremely stretched” warns the ASB.
It is the lowest as measured by the Household Labour Force Survey since 1985 and at 3.2% is above its maximum sustainable level, senior ASB economist Mark Smith said.
Similarly, wage growth has risen to a post global financial crisis high with more to come, as workers seek compensation for soaring inflation.
Smith warns the relaxation of border restrictions could tighten the labour market further as Kiwis head offshore on a belated overseas experience.
Jackson identifies north Waikato, Waimakariri, Selwyn and Southern Lakes districts among the few rural districts likely to experience gains in their working population.
She estimates some districts can expect a 12% slide in their working-age population of 20 to 65-year-olds, a figure reflecting a significant drop in NZ’s fertility rate over the past 20 years.
While the national workingage population will grow 7% nationally between now and 2033, 31 of the country’s 66 district councils can expect their labour force population to shrink, even allowing for immigration.
An optimistic scenario where immigration is 55,000 a year and fertility boosted from 1.6 to 1.9, still means almost half the country’s territorial authorities will still have reduced working-age populations.
The mayors of Opotiki and Gore highlight lifestyle, opportunity, low house and cost of living costs as reasons for locals to stay and people to move there.
Trouble is, virtually every other community leader is touting the same line.
Opotiki Mayor Lyn Riesterer said the district is standing at the dawn of a new era for growth, with significant investment from the Provincial Growth Fund providing a new harbour development linked to mussel factory and farming ventures.
Gore has lent heavily on migrants to fill the worker shortage and is home to 45 ethnicities, but Mayor Tracy Hicks is confident as large urban centres become too costly, New Zealanders will be lured south by opportunity, high wages, lower living and housing costs.
Opotiki mayor looks to future
Richard Rennie richard.rennie@globalhq.co.nz
OFFICIALS charged with boosting rural employment in the Opotiki district doubt predictions the district will suffer a labour crisis in the coming decade.
Predictive work by Waikato University demographer Professor Natalie Jackson has raised the prospect of Opotiki being one of several districts nationally to suffer a significant decline in its working age labour force aged 20-65.
Her estimates are that even with moderate migration gains, the district’s labour force shrinks by 7% and up to 11% should migration remain low.
But Opotiki Mayor Lyn Riesterer said this is not the first time she has seen such predictions and doubts they will be fulfilled.
“Over the past three years we have actually seen our population grow, from 9200, to now be at 10,000. We attribute part of this to covid, with people coming home to whanau, and also seeing jobs with the opportunity to buy a house,” Riesterer said.
The 10,000 population is up 10% on the 2006 census and in 2018, 20% of the population had moved back in only the past two years.
Along the poor end of the Bay of Plenty, Opotiki was hit hard in the 1980s by Rogernomics, with sheep farming subsidies removed, two clothing and one shoe factory closing and many Ministry of Works staff redundancies.
In the meantime, the golden glow of the kiwifruit industry the Western Bay enjoyed was late arriving, with the Opotiki GAINS: Opotiki Mayor Lyn Riesterer says she is unconvinced population decline in Opotiki will become a full blown exit of working age people in coming years.
district struggling through three decades of reduced labour opportunities and dwindling services.
In a population where 65% are Māori, the district has recorded unemployment rates typically double the country’s average and a deprivation index making it the third worst in the country after Wairoa and neighbouring Kawerau.
But looking out over the next 10 years, Riesterer sees every reason for the district to not only continue attracting ex-locals back, but to keep them and to grow, thanks to some major initiatives from iwi, the primary sector and government.
The district is now a hub for higher-value kiwifruit cropping further up the coast and is moving to farming the sea alongside its existing land-based assets of pasture, forestry and orchards.
And under the Provincial Growth Fund, Opotiki’s boat literally came in.
After over a decade and five funding attempts, it received $80 million towards its harbour development and a mussel factory operation, which opened in August last year.
It represented a significant injection to a small district economy that generates about $450 million of GDP a year.
Operating as Open Ocean Whakatōhea Mussels, the factory will ultimately employ 230 people by 2025, representing the last piece of the district’s aquaculture puzzle for more employment.
The factory fits with the massive 5000ha of ocean area off the town’s coast that was a key part of the Whakatōhea Treaty settlement.
It was the first settlement to include ocean area as part of the deal and is the largest open ocean farming zone in the world. The focus on the sea makes sense in a district where 75% of the land is locked in DoC estate, while also claiming 50% of the Bay of Plenty’s total coastline.
It is also the culmination of iwi elders’ vision to farm the sea to provide income for whanau.
Barbara MacLennan, workforce manager for the development agency Toi EDA, said the projects have been undertaken with an eye on ensuring long-term, sustainable jobs are offered locally first.
“We have asked, ‘what does a good job look like?’ There is a strong values base at heart of that, something some sectors have been incredibly slow to get across,” MacLennan said. The Opotiki district has suffered generations of embedded welfare dependency and even now in a time of plentiful jobs has 1500 of its 10,000 population on benefits.
Of these over half are unemployment benefits, with intergenerational welfare dependency common.
“It has taken three generations to get into this position and will take time to get out, there are no quick fixes. People need a lot of pastoral care to step into work,” she said.
She said moving people into work involves more than simply promising a living wage.
The district has developed a “pathways to work” approach almost a decade ago, identifying people while still on a benefit, both young and old, and helping deal with drug, family and housing pressure prior to placement in a job.
This can be as simple as helping would-be employees get their car licence, often the first step to other higher-paying licences, including forklift operating and heavy trucks.
“We have put support in to encourage employers to take someone on without a licence and wrap around to help them get it while working,” she said.
The “pathways to work” philosophy has become a blueprint later embedded in tender documents for the harbour and factory projects.
“It means much more of the supply side to these projects is now sourced locally, like concrete for example, and involves local people and businesses,” she said.
Sector advised to work with schools
Richard Rennie richard.rennie@globalhq.co.nz
THE primary sector has some challenges to overcome about how it is perceived before it can successfully engage more of a younger generation in the Opotiki district.
As a district, Opotiki could provide a burgeoning pool of young talent to meet the district’s future growth aspirations in horticulture and aquaculture, with 22% of its population aged between 0 and 14, compared to 19% nationally.
But Barbara McLennan, workforce management for development agency Toi EDA, said there is a need for greater engagement between the primary sector and school pupils if the sector wants to make more of the human resources on hand into the future.
“They do not get into schools early enough and there is a poor perception and reputation for primary industry among many whanau,” McLennan said.
She maintains there is even greater need for engagement by the primary sector, given the absence of specialised agribusiness teachers in the local high school.
“There is a need for employers here to create more excitement about the opportunities they offer. You so often go into a group of students and these jobs are not on the tip of their tongue,” she said.
Barbara MacLennan Toi EDA
She acknowledges the one-size-fits-all education system means qualifications and studies are not always well matched to regional opportunities.
To help counter that, Toi EDA has engaged a work exposure programme known as WE3 continuum.
The system’s three steps involve children being “exposed” to the world of work at age 10-14, “exploring” as 13- to 16-year-olds what may interest them for work, then “experiencing” work from 16-18, in real-world settings.
“Work experience matters, let’s have a go at co-designing some work experience and exploration between industry and local schools, one size will not fit all districts,” she said.
“We could then follow up young peoples’ curiosity so the teacher can be upskilled in helping them further that interest.”
She is excited about the relationship developing with nearby Whakatāne High and the local mussel industry, with the school offering a marine studies course from Year 12.
The covid pandemic has also bought a silver lining with funding from the Ministry for Social Development, targeted specifically at employing more rural young people under 30.
Mayor Lyn Riesterer said all rural areas that have taken up the funding have placed over 1500 young people, and in the past year Opotiki has placed 50 under-30s into new, full-time work.
Special report
Tough harvest for eastern BoP
Richard Rennie richard.rennie@globalhq.co.nz
LONG-TIME Opotiki kiwifruit grower and contractor Brett Wooten is finding this season more challenging than ever over harvest, and said he can’t wait for migrant labour to return to the eastern Bay of Plenty.
Wooten grows 24ha of kiwifruit spread between Green and SunGold, and also runs a large contracting business to harvest and manage kiwifruit orchards in the district.
Like most growers he would prefer to employ locals. But he has clearly become frustrated at this season’s labour challenges.
He needs about 150 staff on the ground this season, but admits some days he is short as much as 40%. Despite Opotiki having over 800 jobseeker beneficiaries, he will often have to try 30 locals, just to get 8-10 to turn up for a shift.
“And sometimes I may only get four or five out of that. I admit, I will worship the ground backpackers and RSE workers walk on should they return next year,” Wooten said.
“I have all but given up (on locals), they are too stoned, too drunk – gangs and drugs are the biggest issues here.”
He is compelled to separate some work teams on grounds of their respective gang affiliations, lest scraps break out in clients’ orchards during shifts.
However, he also said he has some extremely loyal hardworking local employees who he deeply respects that have been working for him over 15 years.
Barbara McLennan, workforce management for development agency Toi EDA maintains kiwifruit has been slow off the mark when it has come to offering permanent, well-paid jobs to locals.
“In 2015, about one in five jobs was full-time and that is changing. But the payment of a living wage has been one of the most important things to come out since covid limited RSE workers here too, before this just was not happening across the industry,” McLennan said.
She said the ability to pay more full-time roles, aided by the arrival of the district’s mussel plant has helped many iwi who may be supporting extended whanau in their household.
“And we have seen kiwifruit step up offering far more flexible hours and being quite innovative, offering transport to jobs, meals at the start of shifts and sites for people in camper vans to stay,” she said.
Wooten has long taken the view that the “bottom 10%” of the community need lifting up, leveraging off the opportunities the likes of him can offer. He was part of a community of growers donating 1-2c a tray to a fund that accumulated almost $100,000.
However, he said conflicting objectives among contributors meant it became spread too widely, and he felt compelled to resign.
Even as more orchards are developed further down the coast, Wooten is circumspect about how far future expansion can go, given labour constraints.
“I really think once you get down toward Te Kaha, we are going to see a mini-Tonga there, with RSE workers having to do the job,” he said.
Eastpack and Seeka are the two main post-harvest processors in the district.
Eastpack chief executive Hamish Simson said he sees a disjoint between the training skills schoolleavers are receiving in the district and the district’s job needs.
He accepts the sector has some responsibility to engage with locals and points to school holiday employment as a successful example.
“For many of these kids we are their first boss and workplace exposure, we spend a lot of time inducting them because we want them to come back,” Simson said.
Eastpack also works with the Ministry of Social Development (MSD) to engage beneficiaries.
“Does this help get some off unemployment? Yes, but it’s not 100% successful. The challenge is not enough people are workready, to stick with something day in, day out,” he said.
Seeka has recently purchased Opotiki packhouse operator OPAC. The company is also developing 65ha of orchards up the coast at Te Kaha with iwi.
CEO Michael Franks said the company has a history of working with iwi and MSD in other regions, and was likely to build on that in Opotiki.
This includes limited period on-boarding programmes giving potential employees an insight to the business.
An active cadet programme could also be replicated locally, with 13 already on a five-year programme to Level 4 industry training.
But like Simson, Franks is adamant RSE workers and backpackers will remain a key part of the labour supply into the future.
Simson said Opotiki is and always will be on the edge of the industry in terms of accessing labour supply, given the increased plantings, distance, small population base and inherent social issues.
“The job opportunities are there, but everyone’s challenge is how do you reduce unemployment in a town where it has always been high?” he asked.
“Guys like Brett really are at ground zero right now, especially after the year we have had where labour is at a crisis point.”
TOUGH: Opotiki kiwifruit grower and harvest contractor Brett Wooten says future growth of kiwifruit in Eastern BoP will have to rely upon migrant staff.
Hamish Simson Eastpak
Filling vacancies still a challenge
Neal Wallace neal.wallace@globalhq.co.nz
GORE has 90 job vacancies, a problem that is becoming more pronounced and shows no sign of going away.
The jobs are across the spectrum: farming to automotive, education to retail and hospitality.
“Generally speaking, employers are crying out for workers and it’s across all the sectors as they probably are throughout the country,” Gore District Council’s newcomers network co-ordinator Mark McCann says.
The district has a population of about 13,500, with Gore home to 10,000 of those, which has been steady for the past 15 years.
But it is ageing with a median age of 43.6 at 2018 census.
McCann says job vacancies have in recent years varied between 80 and 100 but it is worsening without access to foreign labour.
Competition from Australia, which offers a two year work for residency programme for dairy workers, has accentuated that problem as will the resumption of international travel.
Like many rural communities, migrant workers have filled the vacuum.
Gore is now home to 45 ethnicities including a large population of Filipino farm workers.
“Agriculture is very reliant of people from overseas, They fill a large part of the void,” McCann says.
Gore Mayor Tracy Hicks recalls as a youngster there were few migrants in the community but says they are now an integral part.
Like most rural communities, young people from Gore tend to drift to larger centres for education and many do not return, either working in urban jobs or venturing overseas.
“We have to ensure the lifestyle they enjoyed as they grew up here is still there when they settle down so they want to come back.”
He says attracting people to move to rural communities is a challenge and, like many other local authorities, his council is promoting the region’s lifestyle, lower housing and living costs alongside opportunities.
“We’re placing a focus on lifestyle, that Gore is a good place to raise a family and for young people and it is close to Stewart Island, the lakes and mountains,” Hicks says.
“Alongside that we have a number of jobs.”
He acknowledges the inducement was used by other councils to promote their districts but says workers from Wellington and Auckland are being attracted to move to Gore.
Hicks says managing Gore’s ageing demographic is a challenge.
“We are looking at what happens as older generations transition out of work and what that means to the community, while also finding younger people to fill the gaps.”
One challenge for young rural people is getting their driver’s licence.
Testers visit from outside rural towns, but co-ordinating days they are available with demand can be challenging and delay young people getting their licence.
McCann says the council works with the Ministry for Social Development (MSD) on a Closing the Gaps initiative that provides funding to support youth into employment,and helping people move to the regions for work.
They aim to place 50 job seekers with employers each year, but in the past 18 months have placed 98.
McCann says he would like more farmers to be involved in the scheme, which is tailored for small to medium businesses.
MSD figures show that in the quarter to December 2021,there were 780 people on a benefit in the Gore district, with numbers fluctuating from about 700 in 2018 to more than 800 in 2020.
Of those, 354 were receiving a job seeker benefit, 186 were solo parents, 225 supported living and 15 on other benefits.
Almost all beneficiaries are of working age, aged 18-64.
JOBS APLENTY: Gore District Mayor Tracy Hicks leads a campaign to attract workers to Gore. Photo: Natwick
Staff shortage forces labour rethink
Neal Wallace neal.wallace@globalhq.co.nz
DAIRY farmers are giving up trying to recruit new workers, says a Southland farmer.
Jason Herrick, who farms near Mossburn, said the 4000 workers the industry needs will be fewer now, as he is hearing farmers are making management changes to reduce their labour needs because they cannot attract New Zealanders or secure migrant staff.
Relief milkers are now charging $45/ hr and the worker shortage is leading to poaching and higher wages, which will be inflated further by new conditions attached to recruitment of migrant workers
Herrick said employers must currently pay immigrants a minimum of between $27 and $28/hr.
Under new conditions that will now increase to about $40/hr, which will push up other wages as existing employees seek wage relativity.
Herrick employs four Filipinos and says for many farmers’ immigrant workers are the only short-term solution.
The fact many migrants are being recognised by Dairy Industry Award titles shows they want to learn and are ambitious to advance their dairy careers.
He said changing the perception of dairy farming to make it an appealing career for New Zealanders is an intergenerational challenge that is hampered by attacks from environmental and animal welfare groups and incorrect public perceptions.
Most farmers are reluctant to defend their sector in fear of being further attacked and labelled.
“Most farmers put their head in the sand and hope it goes away because they don’t want to be shot down,” Herrick said.
Ironically, an exceptionally dry summer helped Southland shearing contractor Jamie McConachie navigate this shearing season with fewer staff than he usually needed.
A shortage of shearers and wool handlers is a major challenge, but the exodus of stock from a rain-short province reduced demand for his services.
“It is hard to find career shearers and wool handlers, people who want to make a choice as a career or a job,” McConachie said.
At the peak of the season McConachie needs 80 workers, but changes to the shearing patterns are impacting the inter-island flow of workers, while closed borders have prevented the trans-Tasman movement of workers.
The North Island main shear is starting later and ending later, which is crossing over with South Island shearing.
Similarly, pre-lamb shearing is getting busier in the south from June to August.
The pool of rural people who normally work in the shearing industry is shrinking and competition for those that remain is heightened.
“It’s getting harder and harder. The rural fabric has changed,” he said.
With workers increasingly living in larger centres, they now have to travel further to sheds.
He said with fewer workers, issues such as the quality of shearing facilities and working conditions are becoming employment factors.
Farmers with substandard sheds could find it harder to attract shearing contractors.
He does not believe the physical nature of the job is a deterrent, saying that, along with the potential earnings, it is part of the attraction.
EXTRA HANDS: Dairy farmers Jason Herrick and Macoy Iguana. Herrick employs four migrant workers on his Southland farm.
Special report
A vocation worth promoting
Neal Wallace neal.wallace@globalhq.co.nz
THE head of one of the country’s largest transport groups is urging the education system to promote vocational training and careers to help address a nationwide truck driver shortage.
Anthony Jones, the chief executive of Invercargill-based HW Richardson Group, says the national rural transport company, which employs 2500 staff, is short about 75-80 drivers while the contracting side of the business needs a similar number.
“Where have all the people gone?” asks Jones.
He says jobs as drivers, mechanics and other transportrelated vocations were highly technical, important careers, but the education sector traditionally promotes tertiary-based academic careers, viewing vocational careers as low-skilled.
“It’s a stigma applied incorrectly.”
The worker shortage is encouraging competing transport operators to lure staff with higher wages and conditions, but Jones says that is not a sustainable solution.
He says his group promotes lifestyle, health and safety, the quality of gear and work conditions to attract and retain staff while also targeting students at Southland high schools.
“We want to show them that there are great career paths and lifestyle.”
The company runs its own driver training scheme, the HWR Driving and Assessment programme, which aims to fill vacancies and upskill staff.
In 2021 the 20 trainers completed more than 2750 assessments, spanning both in-cab assessments and licencing and everything from forklifts to various heavy classes.
Each assessment and licence costs $3000 and while not every graduate will continue working for Richardsons, Jones says the overall benefits outweigh those issues.
Solving the issue of an ageing driver workforce requires lateral thinking.
Jones says some drivers nearing retirement no longer want to drive long line-haul routes so Richardsons moves them to their concrete business, keeping them gainfully employed driving short distances while retaining their skills and filling a crucial role.
Jones says another attribute the company invests heavily in is health and safety, using driver technology such as fatigue monitors and cameras to make the job safer.
Promoting the lifestyle of working in rural communities can be a challenge but Jones, who was born and bred in Australia and worked for much of his life in Sydney, has experienced first-hand the benefits of such a shift.
Moving to live and work in Invercargill he has found the lifestyle relaxed and the locals are interested in people.
Jones says while those rural community attributes need to be promoted, staff moving to work in rural communities also need support and to feel valued.
Anthony Jones HW Richardson Group
BATTLE: HW Richardson chief executive Anthony Jones says the worker shortage is encouraging competing transport operators to lure staff with higher wages and conditions, but Jones says that is not a sustainable solution.
Industry jobs still a hard sell
Neal Wallace neal.wallace@globalhq.co.nz
THE days of advertising job vacancies and then sifting through the applicants are gone for large rural employers like the Alliance Group.
Its manufacturing manager Willie Wiese, says employers have to start recruiting well before the season, using creative tactics and supporting their workers.
Alliance and Silver Fern Farms estimate they are each short about 500 workers this year.
The whole industry estimates it is short about 2000.
Realising early last year staffing would be an issue, Alliance began early recruitment and training of staff, reviewed its recruitment methods and looked at issues facing workers.
Wiese says one issue identified is a lack of housing in rural towns.
Alliance has targeted potential workers from South Auckland and Wiese says while pastoral care and support is important for people relocating, the major challenge is housing.
Luring families from high population areas into jobs in the regions is more difficult than it sounds.
The loss of friends and family, adjusting to new communities and housing are all barriers which Wiese says needs Government support to make happen.
Alliance now runs all but two of its plants for 10-11 months of the year making jobs more permanent and desirable than seasonal positions.
A collective agreement with the NZ Meat Workers’ Union allows staff to move between plants according to need, which helps maintain production levels according to livestock supply.
This season Alliance brought 200 workers in to bolster its Lorneville workforce while another 90 were recruited from the Cook Islands, with many working at its Mataura plant.
Wiese says while this has helped, the worker shortage required a reconfiguration of plants to allow the daily management of further processing and cutting linked to worker availability.
Financial incentives are another tool.
The minimum starting wage has been increased to $24.50/ hour, an education system has been introduced so staff can get national qualifications and staff who refer a new employee can earn $600 provided they stay for a minimum length of time.
Wiese accepts meat industry jobs are hard and repetitive and the requirements to constantly wear personal protective equipment and work in minus 25degC conditions are demanding.
Alliance has invested $60m in automation in the past two years to reduce the reliance on labour and is working with engineers to expand technology into areas such as the slaughter board.
Silver Fern Farms regional operations manager Marcus Beadell says attracting and retaining staff is a significant focus.
“We pay a starting wage far in excess of the minimum wage and have a focus to ensure new starters get appropriately introduced to the industry, for example using buddy trainers.”
SFF also provides staff wellness, job sharing opportunities, discounted insurance options and meat sales.
“If someone recruits one of their friends or family to join the team SFF pays them a $500 referral fee.”
Fonterra is also feeling the impact of a tight labour market across its retail, on farm support and processing businesses.
Fonterra’s director NZ manufacturing Alan Van Der Nagel says as a seasonal business it needs a pool of short term workers to cover peak milk periods, which are not attractive positions when there are plenty of job options.
While there have been some delays in filling positions, this has not impacted the co-operative’s ability to process milk.
SCRAMBLING: This season Alliance brought 200 workers in to bolster its Lorneville workforce while another 90 were recruited from the Cook Islands, with many working at its Mataura plant, right. PUTTING DOWN ROOTS: Alliance Group manufacturing manager Willie Wiese says one issue identified as a barrier to recruitment is a lack of housing in rural towns.