1. Labour market modelling project Name of presenterMark Dean Venue or eventRSE conference, Mission Estate, Napier Date of presentation06 July 2016 An update for the RSE conference

2. Topics we will discuss today An introduction to the labour modelling project Some interesting trends Survey workshop 2

3. 3 INTRODUCTION TO THE LABOUR MODELLING PROJECT

4. Why are we doing this? Strong growth in Hort Vit sectors Access to seasonal and permanent workers a constraint Labour supply / demand forecasts to help - Industry invest with some confidence - Govt agencies to determine policy settings Project is jointly funded by industry and Govt with a Technical Advisory Group (TAG) overseeing it - Part of the Sector Workforce Engagement Programme (SWEP) 4

5. Who is the team? The TAG includes the following members: - Gary Jones (Pipfruit New Zealand) - Brett Cameron (MSD) - James McDevitt (MPI) - George Rarere (MBIE) - Nick Montague (MBIE) - Nicola Crennan (NZ Wine) NZIER developing the labour market model - Mark Dean (Project lead) - Dion Gamperle (Grower survey) - John Stephenson (QA) 5

6. Process: project is now in Phase 2 Phase 1 completed - Review of prior research - Scope work required for labour market model - Report with model description and detailed project plan Phase 2 underway - Data - Grower survey template tested and refined - MBIE working on StatsNZ dataset - Grower associations, Govt agencies,… - Model development - Target 31 Aug for final model delivery 6

7. What are we doing? NZIER are developing a model which captures - the labour force at the end of each month (to June 2022) - the flows of labour into / out of this pool during each month (eg. local population growth, migration,…) The model “matches” workers to demand using “levers”, eg. - wages, - worker productivity, - planting decisions, - policy settings… We can explore various scenarios Can we find a solution that is “just right”? 7

8. 4 crops, 5 regions, 7 worker groups 4 Crops: - Kiwifruit - Wine grapes - Pipfruit - Summerfruit 5 Regions: - Nelson/Marlborough - Central Otago - Hawkes Bay - Bay of Plenty - Northland 8 7 worker groups: - NZ permanent workers - NZ casuals - NZ seasonal labour scheme - Work and Income clients - RSE - Working holiday visas - International students and other visas

9. 9 SOME INTERESTING TRENDS FROM THE DATA WE HAVE SEEN SO FAR

10. Growth in migrant labour is stronger in the South Island 10 Data source: MBIE IDI team Migrant workers include RSE, working holiday, essential skills and international students

11. Sth Island regions tend to have lower unemployment, and businesses have more trouble finding labour 11 easy to find workers difficult to find workers

12. Most HortVit regions have experienced below average population growth If there is limited population growth in local areas, then for the industry to grow we need: - Local workforce to become more productive, - Higher proportions of people entering the workforce, and/or - Kiwis from other regions / more migrants 12

13. 13 SURVEY WORKSHOP

14. Why the survey? 14 Recall we need to match workers to demands How do growers and workers currently “match”? - what worker groups are used? - how many are used? - for which tasks? What are the “levers” that will drive our forecasts? - Are workers responsive to wage offers? - Are there constraints such as accommodation? - Can we improve labour productivity? etc… StatsNZ data (MBIE IDI team) will provide useful insights and allow statistical estimation of trends, but really need more granular data to understand a “typical” growers business model (and the variation between growers)

15. Three sections for respondents to complete 1.Demand for seasonal labour 2.Characteristics or “qualities” of your workers 3.Production and profit 15 Contractors will get a slightly different version of the survey to answer

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17. Section 1 Your labour demand for each task (1a to 1f) - Thinning/pruning/harvesting/etc - Hours or days demand for each task - Monthly profile of this demand - By worker type if available Quantity of labour hired over the year (1g to 1j) - By worker type - Number at peak - Number over the year - Hours or days worked - Wages Why? In our model we need to match growers demand (tasks) to the workers available 17

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23. Section 2 How productive are your different worker groups (2a) Staff turnover (2b) and mobility (2c to 2d) Whats important for retaining staff (2e) Accomodation (2f to 2h) Why? We need to quantify the “levers” that will drive our forecasts, eg. - How productive are each worker group? - Are workers responsive to wage rises? - Are there constraints such as accommodation? 23

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26. Section 3 Planted area and annual production (3a to 3c) Financial performance (3d) Why? We can then calculate: - How productive is your labour force (tonnes/hour worked) - Do you have financial headroom to increase wages? - Are there interesting trends when evaluating all responses? (eg. do respondents with certain worker groups tend to be more productive/profitable than their peers?) 26

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29. 29 APPENDICES

30. Model overview 30

31. Key model outputs 31

32. Demand for labour will be determined by production forecasts Demand for labour by growers will be built up in the following steps: - land area planted (hectares) - applying yield factors to determine the kg of product per hectare - Applying labour productivity factors to obtain the labour demand hours for each task Profitability will also be modelled - for example, there cannot be a situation where wages are increased to a point where losses result (at the prevailing prices) 32

33. Seasonal labour peaks vary between fruits and regions 33

34. Feedback from survey test 34