By Ian Taylor

This article was  written prior to the onset of the COVID-19 crisis. On reflection though the themes are still timely. Post this current disruption investment in infrastructure will re-emerge as a means of supporting an economic recovery. Balancing this approach with a focus on developing and aligning a national workforce to the needs of a vastly changed economy will remain a highly relevant ‘conversation’.


As the Government announced $12 billion worth of investment in New Zealand’s infrastructure at the beginning of 2020, Finance Minister Grant Robertson heralded the announcement as releasing the “handbrake” on the economy and society created by the chronic underinvestment before Labour came to power in 2017. The spending would encourage growth and create jobs, he added, while the transport spending programme – $6.8 billion – would boost and future-proof the economy. 

So far, so good. However, are we overlooking development of our greatest resource – our people?

According to the Productivity Commission our nation is one of a small number of OECD countries with both a low level of labour productivity and low productivity growth. Why? It’s “a combination of New Zealand's small domestic markets and large distances to global markets … very few New Zealand businesses operate at the global technological frontier in their industry …”, says the Commission. Further, the recent OECD Economic Survey of New Zealand partly attributes our low productivity (and earnings) to “qualification and skills mismatches … and low rates of … R&D activity”.

To lag further behind in an increasingly digitised, globalised and disrupted workforce environment is simply not an option. Particularly when research indicates that more than half of the global workforce may lose their jobs due to automation, and the fact that 42% of foundational employment skills will change significantly by 2022. Further still, a recent article in the Harvard Business Review, suggests that “more skilled countries show better economic performance and lower risk of labour market disruption from automation.” 

Norway, the number one top productivity performer in OECD rankings, boasts an economy growing at more than two per cent a year. Coincidentally, it has a highly-educated labour force and was the first nation to collaborate with the OECD to apply its (now revised) Skills Strategy in practice, aiming to ensure the nation’s competitiveness rests on the skills of its workers above other resources. 

Europe overall is a regional top performer, due partly to the way it has revamped its labour agencies to focus on more ’active’ strategies such as retraining of the unemployed rather than relying on unemployment benefits. Such reforms, as outlined in a recent McKinsey discussion paper, have helped reduce unemployment in Germany from 12 per cent in 2005 to 5 per cent in 2017, while simultaneously increasing labour participation. 

There has also been a recent move to make on-the-job training the norm. France has recently set a minimum amount of time to be spent on employee training, and also provides tax credits to entrepreneurs who invest in on-the-job training. Similarly, in the UK, the Apprenticeship Levy mandates that employers allocate funds to hiring apprentices. Belgium uses training vouchers to help small-to-medium businesses to upskill employees, providing a good incentive for smaller businesses who traditionally spend less on educational training than larger organisations.

Such initiatives are not limited to Europe however. In Singapore, everyone over 25 years of age now receives a skills grant to invest in education, such as improving technical skills (for example, cyber-security) or core skills (for example, accounting). The initiative has been reported to be successful, with nearly 10 per cent of the population taking part and 8/10 participants reporting positive impacts on their work. 

And in Indonesia, a Government initiative which offers substantial tax deductions (of up to 200 per cent) for businesses which invest in human resources development, was announced late last year, while Argentina is a top performer in the technology space and has developed an innovation-based economy with a model which sees universities emphasise the teaching of practical technology skills.


So, if investment in people is critical, how is it done at a company level? 

While governments have an important role to play in building the workforce of the future, companies still have a significant role to play. There are plenty of ways to ensure your organisation is harnessing the power of workforce development to remain competitive, without spending the big bucks:

  • Fill that skills gap

Investing in employees to develop new skills and enhance existing ones is critical. Upskilling in any area can be in the form of formal professional development courses, however, this is not the only way! Mentoring can often be a more cost-effective option, and according to a 2018 DDI study, more financially successful organisations offer formalised mentoring programmes and subsequently reap the benefits. Other options are job shadowing, contributing towards higher education costs, and offering secondment opportunities with partner organisations.

  • Embrace AI and automation

Some trends come and go, but artificial intelligence (AI) has seen sustained growth over the last five years. The most successful organisations will embrace the movement to empower their human and virtual workers to interact seamlessly.

Although it has taken time for meaningful business cases to emerge, AI and Machine Learning (ML) are increasingly being used to inform businesses and make structured decisions in place of humans. 

Automation has also surged across industries. But it still hasn’t replaced human jobs that are more creative, and not narrow in scope. The application of advanced technologies, including AI and ML, to increasingly automate processes and augment humans is what Gartner refers to as Hyperautomation in their Strategic Technology Trends for 2020. This shift will continue to have implications for upskilling the workforce in 2020 and beyond.

  • Prioritise company culture

Culture is at the heart of a company, providing direction for how leaders and employees interact and work together. Work culture has been hailed by influencers as the driving force for companies to become more innovative, technology-driven, employee-focused, and inclusive. Leaders who recognise the value of individual contributions, and help unleash this potential, play a key role in creating inclusive work cultures. Remember if you don’t spearhead company culture, it will be done for you, and you may not like the results!

  • It’s not all about the money

One of the cheapest and easiest ways to invest in your staff is to show them you care. Employee experience continues to be a focus for companies seeking to improve employee outcomes like satisfaction, engagement and performance. At the forefront are organisations like those topping Fortune's list of great places to work – recognised for creating cultures that promote fairness, equality and innovation. Great workplaces like these ensure leaders are well-equipped to provide the support, guidance and coaching necessary to maximise individual growth and development.


There are big changes ahead which will transform the way we work. With well-coordinated and strategic investments in workforce development by individuals, companies and the Government, we can harness New Zealand’s many positive attributes to release that “handbrake” to a more sustainable economy.

Posted in: News

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