Diversity & Inclusion: A new Aotearoa emerges

Paul Spoonley, Distinguished Professor at Massey University, summarises the evolving new landscape of New Zealand’s demography and asks what employers need to be doing now to address these changes.

In this magazine and elsewhere, a lot of attention has been given to the need to recognise the changing face of Aotearoa, and rightly so, for reasons I will outline here. But often, this diversity is primarily focused on gender and ethnicity. It is much more complicated than that.

The decade from 2010 to 2020 has set the scene for a very different New Zealand to emerge. This has several components in terms of what is changing, and COVID-19 has accelerated some of these changes and completely altered others.

It is no exaggeration to say that these changes will be transformative, none more so than in our workplaces and how those workplaces interact with the different characteristics and profile of catchment communities.

Ageing New Zealand had one of the largest and longest-lasting postwar baby booms (1945–1965). And those baby boomers started to reach the age of 65 in 2010. In the 2013 Census, 600,000 people were aged over 65. Soon there will be over a million, and they will constitute about a quarter of the New Zealand population.

Already, some parts of New Zealand – Thames-Coromandel, Kapiti Coast – have a local population profile that sees 30 per cent or more in this age group. This ageing of the population will characterise more and more regions and smaller towns through the 2020s.

I should now hurriedly add that the age of 65 means less and less in terms of when a New Zealander stops working. New Zealand has the second-highest rate in the Organisation for Economic Co-operation and Development of those aged over 65 in paid work (a quarter of all over 65s are still in paid work), and this is expected to keep growing, both for reasons of choice and because some will have to keep working.

At Massey University, we have undertaken the annual surveys of employers for Diversity Works New Zealand for some years. What continually surprises me is the lack of awareness – and what is equally disturbing is the lack of policies – to address the ageing of the population and workforce.

Fertility New Zealand has had replacement levels of fertility (2.1 births per woman or better) until recently, unlike most of southern Europe, Germany or Japan. But, in 2017, we saw below replacement levels of fertility for the first time. Currently, the birth rate is 1.7 births per woman in New Zealand. This rate is not sufficient to replace the existing population.

What is … surprising is the lack of awareness – and what is equally disturbing is the lack of policies – to address the ageing of the population and workforce.

It is a bit more complicated than simply fewer births. There is a growing pattern of delayed first births so that New Zealand women are having their first babies in their mid-thirties or later. And there are fewer teenage pregnancies. Last year, there were more births to women aged 40 or over than to New Zealand teenagers.

The total number of births has not changed much, but the number of births relative to the growing population has. We are seeing more examples of ‘one and done’ or no births. Employment and maintaining income levels are seen as more important for younger generations.

This has all sorts of employment impacts. One is that the supply of workers will slow as there are fewer births relative to both the size of the population and labour demand. Another is that workplace policies in relation to maternity and paternity increase in importance in terms of both recruitment and retention. Employers will need to consider how these new generations see and value employment. As Chloe Swarbrick reminded us, with her retort in Parliament, generational differences do matter.

All the evidence is that COVID-19 will dampen birth rates further. There is both the economic or employment uncertainty combined with the public health risks of having a child. The Brookings Institute has forecast between 300,000 and 500,000 fewer births in the United States of America directly related to the effects and uncertainties of COVID-19. What will be the impact on New Zealand?

Immigration At the start of the last decade, New Zealand was experiencing major net losses in terms of immigration. Remember that, in 2012, nearly 54,000 New Zealanders left to live permanently in Australia in that one year alone. But, by 2013, a different story of immigration began to emerge.

The International Air Transport Association is forecasting disruption to international mobility of three years through to 2023, not a few months as some seem to expect.

Between 2013 and early 2020, New Zealand added more than 400,000 people to its population from net immigration gains. It is the most sustained period of net gain, combined with annual net gains that are easily the highest in this country’s history.

When the country went into lockdown in March 2020, the previous 12 months had seen the highest net gain from immigration ever, at 71,500, with the largest group of migrants involving returning New Zealanders, followed by migrants (in rank order) from India, China, South Africa, the Philippines and the United Kingdom. Then the borders closed.

What was equally staggering was the reliance on temporary workers and students. At the point of lockdown, 310,000 people were on temporary work and study visas in New Zealand. Industries, employers and regions were relying on either temporary or permanent (or both) workers. What next?

The 2013 to 2020 period might soon be seen as one of exemptional migration and that the ‘new normal’ might be quite different. This new normal might not emerge for some time. The International Air Transport Association is forecasting disruption to international mobility through to 2023, not a few months as some seem to expect.

Regions

The demographic stories differ, depending on the region in question. We are forecasting that many territorial authorities will experience either population stagnation or decline over the next decade. The West Coast of the South Island is the first region to see population decline (as well as an ageing of the population), but many regions are already seeing key towns growing while the surrounding rural areas, plus smaller towns, experience an ageing and declining population.

The population growth of recent years has been driven by net immigration. And the emphasis on recruiting skilled immigrants has meant that immigration has been a significant source of talent supply. Most obviously, the effect has been seen in the upper North Island, with Auckland, Tauranga and Hamilton all growing at high rates. A shift from major cities to regions is also occurring, which COVID-19 has accelerated.

Will the impacts of COVID-19, combined with internal migration, change our scenario of increasing levels of population stagnation and decline in many regions? Unlikely, although even small numbers of migrants – internal or international – do make a big difference in regions. The point here is that we need to understand the regional impacts a lot better than we do. It’s worth understanding that some of the most profound impacts will occur in certain regions because they have relatively thin labour markets and, in these circumstances, demography will have profound effects on labour and skills supply.

Ethnicity

Population growth in the past decade has been largely driven by immigration, and, given the source of these immigrants (temporary and permanent), New Zealand has become much more diverse. (I have used the ‘superdiverse’ description for some time to highlight these trends.) In the 2018 Census, over 27 per cent of all New Zealanders had been born overseas, while in Auckland, the figure was more than 40 per cent.

The other factor that underscores this growing diversity has been the declining fertility of Pākehā New Zealanders and the ongoing (relatively) high fertility of Māori and Pasifika. If we look at schoolage populations, nationally and regionally, it is possible to see the effects, with many more identifying as Māori and Pasifika while Pākehā dominate the over 65s.

Over the next two decades, and considering the impacts of COVID-19, we will see growth in the Asian communities (they will make up about 36 per cent of Auckland’s population in the late 2030s and about a quarter of the total population), Māori will continue to grow and will constitute almost onein-five New Zealanders, and Pasifika will comprise about 11 per cent of the population. But there will be important generational differences, so younger populations will have even higher proportions of Māori and Pasifika, and there will be important regional differences.

Demographic transformation

The past decade has set the groundwork for the emergence of a very different Aotearoa. Over the next two decades, the above changes will become more apparent and have significant implications for employers.

As one of those involved in the Diversity Works New Zealand annual surveys of employer attitudes and practices, and as a judge for the Diversity Awards, I have been both impressed and appalled by what I have encountered over recent years.

Some employers and firms are forward-looking and understand how significantly things are changing and are responding in interesting and innovative ways. And others (unfortunately, a rather larger group it seems to me) are going to struggle.

Organisations in this latter group are often characterised by a failure to fully recognise the implications of these demographic changes and are now struggling to recruit, retain or acknowledge key demographic groups (as current or potential employees).

When I explore the implications of movements such as “Black Lives Matter” and “@MeToo” or what a consideration of LGQBT+ means for employers, there might be a shrug or mutterings about “political correctness”. When I point out the changing ethnicity or age distribution and ask about a sector or a firm’s policies, there might be some comprehension, but often that understanding goes little further than the here and now. There is little leadership, no policies or worker or community engagement. An interesting question to put, if policies are in place, is to ask how success is measured. It is surprising how often ethnic, disability or gender diversity is not measured, often with the justification that ‘employees’ would object.

It is an exciting moment in this country’s demographic and political history as we consider the implications of this new demography. I think there is generally a lag in understanding and then in action. And I think many of the policies that might have worked in the past will not work in the future. Innovation, recognition and inclusivity will be critical to successful firms and employers, now and in the future.

Distinguished Professor Paul Spoonley was, until recently, the Pro-Vice-Chancellor of the College of Humanities and Social Sciences, Massey University. He is the author or editor of 27 books, the most recent being The New New Zealand: Facing Demographic Disruption (2020). He is a programme leader of a research programme on the impacts of immigration and diversity on Aotearoa. He was made a Fellow of the Royal Society of New Zealand in 2011 and was a Fulbright Senior Scholar at the University of California Berkeley in 2010. Since 2013, he has been a Visiting Researcher at the Max Planck Institute for the Study of Religious and Ethnic Diversity in Göttingen, Germany.