Summary

Key Findings

• There is consistent evidence of an ongoing shortage of graduates in engineering and related technologies, architecture and building. The downturn in construction and manufacturing will reduce demand for these qualifications in the short term, but demand is likely to continue to increase in the medium to long term.
• Overall supply and demand appears reasonably well matched in medical studies, nursing and health. There are likely to be some specialist areas where demand has not been met and others where there is oversupply.
• There is also evidence of a shortage of graduates with postgraduate qualifications in information technology and bachelors and above in accountancy.
• The findings in this report support the view that increasing the number of people graduating with advanced trade, technical and professional qualifications is one part of the solution to addressing medium- to long-term skill shortages.

Executive Summary

During the period of steady economic growth from 2001 to 2007 there was increasing concern about the shortage of people with advanced trade, technical and professional qualifications. This was seen by the government as a priority to be addressed and was included in the Tertiary Education Strategy 2007-12. As the country moves through a period of global recession, this issue is by no means diminished. While short-term demand is less certain, demand for a more highly skilled workforce is likely to continue in the medium to long term. Also, the drivers of demand for people with advanced qualifications are not limited to economic conditions, but include the increased use of technology and demographically driven demand for health and social services.

This is the last in a series of three reports looking at advanced trade, technical and professional qualifications. The first report looked at skill demands within occupations and the qualifications held by the current workforce. It identified occupations that were experiencing ongoing skill shortage and required advanced-level qualifications. The second report looked further into the qualifications highlighted in the first report and made use of labour market data to see which ones may be in genuine shortage due to a lack of graduates.

This report uses recently developed data on tertiary education completions by field of specialisation to look at the trends in the supply of graduates in the areas highlighted in the earlier reports. It then presents estimates of how well the number of people who graduated from 2002 to 2009 was likely to have met demand from occupational growth and retirements. It also includes comments on the likely effect of inward migration in meeting shortages. However, outward migration is not covered due to lack of data.

This work aims to build the evidence for understanding which areas the tertiary education system could concentrate on more to address skill shortages. The relative supply of New Zealand graduates is just one part of the picture in terms of addressing skill shortages. It needs to be considered within the context of other factors, which include the quality and relevance of the content of qualifications, international supply of and demand for qualified people and the attractiveness of working in related occupations.

The analysis in this report confirms and modifies the conclusions of the first two reports.

The areas where there has been consistent evidence of a shortage of graduates are engineering and related technologies, architecture and building . Demand in these areas has been driven by strong economic activity, and also by increasing use of new technologies and a significant proportion of the existing workforce nearing retirement. Increases in supply have been restricted to below degree level and mostly achieved through industry training. Shortages at bachelors level and above appear to have been met by inward migration. While the downturn in the construction and manufacturing industries will ease demand in the short term, demand for skilled workers in these areas is likely to continue to increase in the medium to long term.

Supply and demand for advanced qualifications in medical studies , nursing and health appear to have been balanced overall. The overall supply of graduates has been reasonably well matched to demand generated by occupational growth and retirements. Inward migration has been similar to other fields of study. However, there are likely to be specialist areas that have not been well supplied, while other areas may have been oversupplied.

The analysis in this report found only two other areas where graduate supply appears to be insufficient to meet demand from occupational growth and retirements. These were people with postgraduate qualifications in information technology and those with bachelors and above in accountancy . The shortage of people with postgraduate qualifications in information technology has been met by a high reliance on inward migration.

The findings in this report generally support a theme established in the first two reports – namely, that increasing the number of people achieving advanced trade, technical and professional qualifications is only one part of the solution to addressing medium- to long-term skill shortages. In most areas, it is as or more important to ensure that graduates have knowledge that is relevant to the current and future labour market, which requires educators and employers to work closely together to identify and understand skill needs.

Introduction

Purpose of this report

New Zealand experienced a sustained period of economic growth from 2001 to 2007. During this period the proportion of the workforce holding tertiary education qualifications also increased. However, there was little growth in labour productivity in this period. The low labour productivity growth was partly due to increased employment rates, which resulted in more low-skilled workers entering employment and lower increases in the average production per person (Ministry of Education, 2008). At the same time, there were also persistent shortages of people with higher levels of skills in trade, technical and associate professional and professional occupations. The need to increase the number of people with advanced trade, technical and professional qualifications was signalled in the Tertiary Education Strategy 2007-12 (Minister for Tertiary Education, 2006).

At the time of writing this report, the country is experiencing the effects of a global recession. This has created uncertainty about skill demands in the short term. However, in the medium to long term, the need for higher skilled workers in order to support innovation and productivity is likely to persist. Also, the drivers of demand for people with advanced qualifications are not limited to economic factors. The drivers include increased adoption of new technology, increased demand for health and social services as the population ages and the further extension of regulation of occupations, with a focus on accredited qualifications, in the trades and health services.

In April 2008, the Ministry published the first in this series of three reports looking at advanced trade, technical and professional qualifications (Earle, 2008a). That report looked at skill demands within occupations and the qualifications held by the current workforce. It identified occupations that were experiencing ongoing skill shortage and required advanced-level qualifications.

A second report was published in July 2008 (Earle, 2008b). That report looked at the qualification areas highlighted in the first report. It considered how well those qualifications matched the occupations with identified skill shortages, as well as examining measures of employment rates and income premiums to assess the value placed on these qualifications in the labour market.

This is the third report in the series. It looks at the number of people who graduated with the advanced trade, technical and professional qualifications identified in the first two reports. It provides estimates of how well the number of people who graduated is likely to have met demand from occupational growth and retirements. It also provides comment on the extent to which immigration has met shortfalls in demand.

The overall purpose of this work is to build evidence to understand which areas the tertiary education system could concentrate on more in addressing skill shortages. In each of these areas, further detailed work will be required to understand issues of quality, quantity and timeliness of supply.

Linking education to skill needs

The first report in this series discussed the link between education and skill needs. It noted that skill shortages arise and can persist for a number of reasons. These can include both insufficient supply of people with the required skills and lack of attractiveness of work within certain occupations and industries. Making changes in the supply of qualified graduates is just one of several possible responses to skill shortages.

The link between education and skill demand was conceptualised as a process with multiple links:

• People make decisions about what they would like to study and/or what occupation(s) they would like to work in.
• People attain education relevant to one or more occupations.
• People build experience relevant to one or more occupations (which may be before, during or after their period of study).
• Their qualifications and occupational experience enable them to be employed within one or more industries.

Methodology

This report looks further into the supply of qualifications. The new data presented in this report is the trends in numbers of people who have graduated with advanced qualifications in trade, technical and professional subjects. This data combines both provider-based and work-based completions and covers the period from 2002 to 2006 inclusive. The provider-based data comes from new work to identify the fields of specialisation of completed qualifications from course level data (Scott, 2009).

For each field of study, this report presents:

• a short summary of the findings from the previous reports
• the trends in completions by level of qualification from 2002 to 2006, including comment on which subsectors contributed to completions at each level
• results from a model which assesses the extent to which completions may have met demand generated by occupational growth and retirements, and the extent to which immigration has provided an alternative source of qualified workers
• a comment on the possible impact of migration.

The information in the tables in each chapter is further described below. A quick guide to the tables is also provided in Appendix A. A fuller account of the methodology used to calculate the numbers is provided in Appendix B. Notes on data sources are provided in Appendix C.

The model

The model results are indicative only. The results are sufficiently robust to provide a broad picture of the extent to which the number of graduates was sufficient to fill the estimated number of places available in the workforce. They go about as far as it is possible to using aggregated statistical data on qualifications and the workforce. The model looks at:

• Supply: The estimated number of people who graduated within each field of study from 2002 to 2006 at each level and who moved into employment
• Demand: The estimated net number of job vacancies created during that period for people with those qualifications as a result of
  • growth in related occupations
  • retirements.

The model then shows the difference between the number of graduates entering the workforce and the estimated net vacancies. The difference is shown in two different ways.

• The first figure is a total number over the five-year period. This figure provides an indication of the absolute size of the difference in terms of the number of graduates.
• The second figure presents the five-year total number as a proportion of people employed with the qualification in the specified field and level of study as at 2006. This figure provides an indicator of the relative size of the difference with respect to the size of the workforce.

The results of the model for all fields of study are shown in Table 1 below. These figures provide an average picture against which the specific field of study pictures can be compared. All numbers have been rounded to the nearest 10 for presentation in the report.

At first glance, the model would seem to suggest undersupply of diplomas, masters and doctorates and oversupply of level 4 certificates and bachelors. However, the model only shows demand due to employment growth and retirement. The model does not include demand for a greater proportion of the workforce overall to hold tertiary qualifications. This has been a significant factor in a number of occupations, where work is becoming more complex and there is a demand for a more highly skilled workforce. It is not possible to meaningfully estimate this effect from existing data.

Therefore, in absence of other evidence:

• if supply is less than demand, it can be inferred that the number of people who graduated did not keep up with employment growth and turnover due to retirement
• if supply is equal to demand, it can be inferred that the number of people who graduated was sufficient to fill new jobs and replace people who are retiring, but may not have been sufficient to meet increased skill demands in the workplace
• if supply is greater than demand, it can be inferred that the number of people graduating has resulted in a greater proportion of the workforce holding tertiary qualifications.

These results can then be considered alongside evidence from the earlier reports to assess whether there may be a shortfall or surplus of graduates relative to demand.

Accounting for migration

Inward and outward migration is a significant factor in considering the supply of skilled workers in New Zealand. New Zealand has one of the highest rates of both inward and outward skilled migration among developed countries. Overall, the volumes are roughly equal and cancel each other out (Dumont and Lemaître, 2005).

Because of the limited coverage of information on migration by field and level of study, migration has not been added into the overall model. Instead, each section includes a comment on the extent of inward migration by field and level of study. These comments are based on an analysis of the number and proportion of permanent and long-term migrants arriving in New Zealand for the first time in the period from 2002 to 2006. It doesn't include trends in return migration by New Zealand citizens and permanent residents.

Inward migration has the largest impact for people with a postgraduate qualification, where only half of people in employment in New Zealand in 2006 were New Zealand born. The period from 2002 to 2006 was marked by significant inward migration, with one in five employed people with postgraduate qualification and one in eight with a bachelors degree having migrated to New Zealand in that period.

The migration tables in each chapter look at the number of people in employment who were born overseas who arrived in New Zealand from 2002 to 2006 with the level and field of qualification specified. The first column provides the total number of people. The second column provides this number as a proportion of all people in employment with a qualification in that field and at that level. The third provides a comparison to the average proportion of people in employment who have arrived from 2002 to 2006 across all fields of study at that level. From these tables, it is possible to infer if a particular field of study has had a greater or lesser demand for new migrants than the qualified workforce overall.

There is no data available on outward migration by field and level of qualification. Dumont and Lemaître (2005) provide an overall count of New Zealand expatriates with bachelors degrees and above and show that the number is about equal to the number of immigrants in New Zealand with the same level of qualification. However, there are likely to be differences in the balance of inward and outward migration across fields of study.

Occupational movement

The model uses information on the total number of people with specified level and field of qualification in employment. It looks at how well the tertiary education system has performed in maintaining this 'stock' of qualified employees. It does not attempt to account for whether these people worked in occupations relevant to their qualifications. This is a fairly complex area to examine and clearer for some qualifications and occupations than for others.

The second report in this series provided some information on the extent to which people work in occupations related to their qualifications (Earle, 2008b). This is noted in each chapter as context for assessing the overall results for each field of study.

Information Technology

Previous findings

The first report found that while there was an adequate supply of people with diplomas in information technology, there was an unmet demand for people with bachelors degrees and above in this field.

The second report found a moderate level of occupational matching for people with diplomas in information technology and a much stronger match for people with bachelors and above. People with information technology qualifications had much higher unemployment rates than others with the same level of qualification, particularly those with diplomas. They were likely to earn more than others with the same level of qualification in management and professional occupations, but less in technical and other occupations.

The second report concluded that increasing the number of people with bachelors and above qualifications may contribute to reducing skill shortages, but only if issues of quality and relevance of qualifications were also addressed. There was limited evidence that increasing the number of people with diploma-level qualifications would reduce skill shortages.

Trends in completion of qualifications

From 2002 to 2006 there was an overall decrease in the number of people completing diploma and bachelor-level qualifications in information technology. The numbers completing at masters and doctorate level stayed fairly constant.

Figure 1: Number of people completing information technology qualifications by level

In 2006, 63 percent of diploma level graduates graduated from a private training establishment and 32 percent from an institute of technology or polytechnic. At bachelors level, 72 percent graduated from universities and 25 percent from institutes of technology and polytechnics. For masters and doctorates, 94 percent of graduates were from universities.

Comparing supply and demand

The comparison of supply and demand suggests that there has been an oversupply of graduates at diploma level, adequate supply at bachelors level and a shortage at postgraduate level.

Table 3 below indicates that there has been declining demand for people with diplomas in information technology. The number of people employed in the related occupational group has decreased. The current workforce with diplomas in information technology is relatively young. Sixty-two percent were aged under 35 in 2006 and only 3 percent were aged 55 and over. Given the young age profile of the workforce, their average employment participation rates will increase with age over the next five years, while very few will retire. This results in a negative value for the retirement rate.

There has been a large number of graduates at diploma level in the period from 2002 to 2006 relative to the estimated size of the workforce.  This oversupply fits with the finding in the second report of higher unemployment rates and lower occupational matching for people with diplomas in information technology.

The model suggests adequate supply at bachelors and honours level. There has been considerable occupational growth for computing professionals. The current workforce with bachelors in information technology is relatively young, which results in a negative retirement rate in the same way as for diplomas. The result of this situation is likely to be an increased proportion of the workforce with bachelors degrees in information technology. The first report highlighted this as the main area of demand.

At masters and doctorate level, the model suggests that supply is falling short of demand.  While the numbers are relatively small, people with qualifications at this level play a critical role in innovation and leadership within the information technology industry, as well as providing the future pool of academics.

Effects of migration

The proportion of people employed with information technology qualifications who arrived in New Zealand from 2002 to 2006 was considerably higher than the average across all fields of study. These figures suggest that the strong supply from domestic graduates is also being supplemented by significant inward migration. The undersupply of domestic graduates at masters and postgraduate level appears to be made up for by a high reliance on migration.

Engineering and related technologies

Engineering and related technologies qualifications cover a wide range of areas including manufacturing, mechanical, industrial, civil and electrical/electronic engineering and technology. Qualifications at level 4 prepare people to work in the trades and as plant and machine operators. Diploma-level qualifications generally prepare people to work as engineering technicians, while degree and above qualifications generally prepare people to work as engineering professionals.

Previous findings

The first report identified unmet demand for people with engineering and technology qualifications at all levels. Demand has been driven by technology changes, as well as the growth in the construction industry.

The second report found that people with engineering and technology qualifications were well matched to related occupations. Males with engineering and technology qualifications were less likely to be unemployed than males with other qualifications. However, unemployment rates were relatively higher for females with engineering and technology qualifications. There was clear evidence of income premiums being paid to people with engineering and technology qualifications occupations.

The second report concluded that there is a clear case that increasing the number of people with engineering and technology qualifications at all levels would contribute to reducing skill shortages.

Trends in completion of qualifications

From 2002 to 2006, there was a steady increase in the number of people completing level 4 certificates in engineering and technology. The number of people completing has been steady at higher levels, except for a small increase in bachelors completions in 2006.

Figure 2: Number of people completing engineering and related technologies qualifications by level

Below degree level, the largest number of completions was in electrical and electronic engineering and technology, where there was an overall increase in graduates from 2002 to 2006. For level 4 certificates, the other main areas of completions were in mechanical and industrial, automotive, process and resources and manufacturing engineering and technology.  For diplomas, the other main areas were in civil, mechanical and industrial and manufacturing engineering and technology.

Figure 3: Number of people completing engineering and related technologies qualifications by level and narrow field¹

Electrical and electronic engineering and technology was also the largest area of completions for bachelors and honours degrees, followed by mechanical and industrial engineering and technology, and civil engineering. Completions of masters and doctorates were fairly evenly spread across electrical and electronic, civil, mechanical and industrial, and process and resources engineering and technology.

In 2006, 94 percent of level 4 certificate graduates completed their qualification through an industry training organisation. The remainder completed at either an institute of technology or polytechnic or at a private training establishment. At diploma level, 43 percent of graduates were from institutes of technology and polytechnics, 28 percent from industry training, 23 percent from universities and 6 percent from private training establishments. The proportion from industry training has increased over the last four years, while the proportion from institutes of technology and polytechnics has decreased. The majority of bachelor degrees (93 percent) are completed at universities, with the remainder completed at institutes of technology and polytechnics. All masters and doctorates were completed at universities.

Comparing supply and demand

The comparison of supply and demand suggests shortages of engineering and technology graduates across all levels of study, with shortages being greatest at diploma level. This concurs with the findings in the second report.

Employment in engineering and technology related occupations grew from 2001 to 2006. Retirements also added to demand, particularly for people with level 4 certificates where the existing qualified workforce is older than average. Overall, the supply of graduates has not been sufficient to keep up with the demand.

It is possible that the demand for people with engineering and technology qualifications will reduce during the recession. However, once the country is out of recession, the demand is likely to pick up again.

A closer look at specific areas of engineering and technology reveals differences in supply and demand.  In Table 6 below, some narrow fields of study have been combined where there is a cross-over of skills and/or occupational groups.

In manufacturing, process and resource engineering the largest number of graduates entering employment have had level 4 certificates. This is an area where there is demand due to retirement but very little net occupational growth evident. At diploma level, the occupational demand is decreasing and graduate numbers are more than enough to meet the losses due to retirement. So at both certificate and diploma level, the number of people graduating would appear to be more than the number of job available due to retirement and net occupational growth. However, at bachelors level, the number of graduates entering employment is just short of the estimates of jobs available due to net occupational growth and retirement.

In automotive, mechanical and industrial engineering, the number of graduates with certificates and diplomas entering the workforce hasn't matched the estimated number of retirements, on top of which there has also been occupational growth. At bachelors and above, the number of graduates entering employment has matched the number of retirements and estimated occupational growth.

In civil and geomatic engineering, the number of graduates entering employment has been insufficient to make up for the combined effects of occupational growth and retirements. This is true for both diplomas and bachelors.

In electronic and electrical engineering, the number of graduates entering employment with level 4 certificates has been more than the number of retirements and increased jobs due to occupational growth. At diploma and bachelors levels, there has been an overall shortfall.

In aerospace engineering there appears to be an oversupply of graduates with certificates. This is mostly due to a decreasing number of people working in related occupations. In maritime engineering there appears to be an undersupply of graduates with certificates and diplomas.  These are relatively small fields and occupations at diploma and bachelor levels, making comparisons unreliable.

Effects of migration

The proportion of people employed with below-degree-level qualifications in engineering and related technology qualifications who arrived in New Zealand from 2002 to 2006 has been about the same as the average across all fields of study. These figures suggest that migration has not had much effect in easing shortages of staff with qualifications at these levels.

For degree and postgraduate qualifications, the proportion people employed who arrived in New Zealand from 2002 to 2006 is above the average across all fields of study. These figures suggest inward migration may have helped ease shortages of qualified staff.

A breakdown of inward migration by shows rates similar to the average across all fields of study in manufacturing, process and resource engineering and in maritime engineering. In all other narrow fields, the rates were higher than average at most levels.

Architecture

Previous findings

The first report identified unmet demand for architects with bachelors degrees and above and draughters with diplomas. Demand was driven by growth in the construction industry.

The second report showed that people with architecture qualifications were well matched to related occupations. Males with diplomas and bachelors degrees in architecture were less likely to be unemployed than people with qualifications at the same level in other field. People with diplomas and bachelors degrees in architecture were likely to earn more as managers and professionals, but less in other occupations.

The second report concluded that there was a clear case that increasing the number of people with diplomas in architecture would make a contribution to addressing skill shortages. At bachelors level, increased completions may also contribute to addressing skill shortages. However, the quality and relevance of provision may also be important to address.

Trends in completion of qualifications

From 2002 to 2006 the number of people completing bachelors degrees in architecture increased, while the number completing diplomas fluctuated. The number of masters and doctorates completed remained stable.

Figure 4: Number of people completing architecture qualifications by level

In 2006, 71 percent of diploma completions were from institutes of technology and polytechnics and 84 percent of bachelors completions were from universities. From 2002 to 2006 the number of people completing qualifications in architecture through institutes of technology and polytechnics decreased, while the numbers completing through universities increased.

Comparing supply and demand

The comparison of supply and demand confirms that the number of architecture graduates has not kept up with demand from occupational growth and retirements. This finding is consistent with the second report.

The model suggests that there are greater shortages at bachelors level and above than at diploma level. The demand for architects may drop in the short term in response to the recession. However, this is an area where there is likely to be ongoing demand in the medium- to long-term, particularly in response to demands for improved building design standards and reducing the environmental impact of buildings.

Effects of migration

The proportion of people employed with architecture qualifications who arrived in New Zealand from 2002 to 2006 has been below the average across all fields of study. This suggests that inward migration may not have been sufficient to ease the shortage of domestic graduates.

Building

Previous findings

The first report identified unmet demand for people with qualifications in building. Considerable demand was evident in the building trades for people with diplomas and level 4 certificates in building. This demand was driven largely by growth in the construction industry.

The second report found that there was a good match of people with building qualifications to related occupations. Males with building qualifications are less likely to be unemployed than males with qualifications in other fields. Significant premiums are paid to people with building qualifications across management, professional and associate professional occupations, but not in the trades.

The second report concluded that there was good evidence that increasing the number of people with level 4 certificates and diplomas in building would make a contribution to reducing skill shortages.

Trends in completion of qualifications

From 2003 to 2006, the number of people completing level 4 certificates in building doubled. At the same time, the numbers completing diplomas and bachelors degrees remained low and stable.

Figure 5: Number of people completing building qualifications by level

In 2006, 65 percent of people completing level 4 certificates in building did so though an industry training organisation, 25 percent completed at an institute of technology or polytechnic and 10 percent at a private training establishment. The major growth at this level has been within industry training.

For diplomas, 77 percent were completed at an institute of technology or polytechnic in 2006 and 20 percent at a private training establishment. Over the four-year period from 2003 to 2006, 59 percent of bachelors completions have been at institutes of technology and polytechnics and 41 percent at universities.

Comparing supply and demand

The comparison of supply and demand suggests that the supply of graduates with certificates and diplomas in building has not kept up with demand resulting from occupational growth and retirements. This confirms the findings in the second report.

Demand has been generated almost equally by occupational growth and retirements. While occupational growth is likely to decrease during the recession, there will continue to be a need to replace qualified workers nearing retirement. The introduction of licensing requirements, increasing demand for registered builders and improvements in building technology and standards will also increase the demand for current workers to gain recognised qualifications.

Effects of migration

The proportion of people employed with building certificates and diplomas who arrived in New Zealand from 2002 to 2006 was lower than the average across all fields of study. At bachelors level, the proportion of employed people who settled in New Zealand over the five-year period was considerably higher than the average across all fields of study. These figures suggest that the shortages of graduates with certificates and diplomas in building were not made up for by migration.

Medical Studies

Medical studies cover the qualifications required to be a medical doctor, including both general practitioners and specialists. Recognised qualifications in this field of study are all at bachelors level and above. Medical studies are looked at in total in this report due to the limitations of available census data. Nursing and other health disciplines are covered in the subsequent chapters.

In this section, bachelors qualifications have been separated from postgraduate certificates and diplomas to differentiate between initial medical training through bachelors of medicine/ bachelors of surgery and further medical training.²

Previous findings

The first report identified unmet demand for people with medical qualifications at bachelors level and above. This was being driven by greater demand for health services, in part due to an aging population.

The second report confirmed this picture. It showed that people with medical qualifications are most likely to work in the health professions. They have very low rates of unemployment and distinct income premiums.

Trends in completion of qualifications

The number of people completing bachelors qualifications were steady from 2002 to 2006. This reflects funding limits on the undergraduate intake of medical students. While the limits were been increased in 2004, these increases will only flow through to completion from 2009. The number of people completing postgraduate qualifications and masters and doctorates has also been fairly steady since 2003.

Figure 6: Number of people completing medical qualifications by level

Comparing supply and demand

The comparison of supply and demand suggests that the number of graduates entering employment with bachelors and postgraduate certificates and diplomas in medicine was sufficient to meet demand from occupation growth and retirements. However, the supply of people with masters and doctorates fell short of demand.

For medicine, these results only provide an overall picture. The data doesn't provide a detailed picture of which areas of medical practice graduates are qualified to enter. Underneath the general trends there may be distinct differences between medical disciplines. Also the data doesn't take account of higher-level medical education that is undertaken outside of New Zealand.

The general conclusion that can be drawn from the model is that the overall number of graduates was probably about right up to postgraduate certificate and diploma level. However, further analysis would be required to quantify possible mismatches within specific areas of medicine.

At postgraduate level, the apparent shortfall may reflect the extent to which New Zealand relies on overseas providers to provide these qualifications.

Effects of migration

The proportion of people employed with bachelors in medical studies who arrived in New Zealand from 2002 to 2006 was greater than the average across all fields of study. However, the proportions with higher level qualifications in medicine were lower than the average across all levels of study. These figures suggest there was a reliance on migration to fill medical jobs in New Zealand. However, there may be difficulties in attracting more highly trained medical specialists from overseas.

Nursing

Nursing qualifications cover registered and enrolled nurses, midwives and health care assistants.

Previous findings

The first report noted shortages for registered nurses and midwives. Registered nursing shortages were possibly more due to recruitment and retention than to undersupply of graduates, but graduate undersupply was noted as an issue for midwives. Shortages of enrolled nurses appeared evident in 2007. Increased demand for people with nursing qualifications is being driven by greater demand for health services, including demand due to an aging population.

The second report found that people with nursing qualifications were more likely to work in health professions than other occupations. They were also less likely to be unemployed. However, as at 2006, people with nursing qualifications were likely to be paid less than others in the same broad occupational group with the same level of qualification. Nurses' salaries have increased substantially since then. The report concluded that increasing the supply of nursing graduates may contribute to reducing skill shortages.

Trends in completion of qualifications

From 2002 to 2006, the number of people completing bachelors qualifications in nursing was fairly steady. Diplomas in nursing are no longer provided. The diploma completions shown below cover diplomas in midwifery and certificate courses to prepare for registration as a New Zealand nurse. Completions of level 4 certificates in nursing have dropped off somewhat since 2004.

Figure 7: Number of people completing nursing qualifications by level

In 2006, nearly all level 4 certificate and diploma graduates were from institutes of technology and polytechnics. Around 38 percent of bachelors graduates were from universities, and the rest from institutes of technology and polytechnics. This proportion was fairly steady from 2003 to 2006.

Comparing supply and demand

The comparison of supply and demand suggests that the supply of graduates with level 4 certificates in nursing was insufficient to keep up with occupational growth and retirements, and the supply of graduates with bachelors degrees was about even with occupational growth and retirements.

Level 4 certificates enable people to work as health care assistants in hospitals, rest homes and other health care facilities. The major driver of demand is the proportion of the current trained workforce nearing retirement. The number of people graduating has been sufficient to meet estimated occupational growth, but did not cover retirements.

The numbers for diplomas and bachelors have been combined in the model, as bachelors qualifications have largely replaced diplomas. However, the workforce is still fairly evenly split between nurses with bachelors degrees and those with diplomas.

The model suggests that the current supply of nurses graduating with bachelors degrees was about sufficient to cover occupational growth and retirement. The effect of this is not captured in the model.  Also, the data doesn't provide detail about areas of nursing specialisation where there may be greater or lesser supply and demand.

Effects of migration

The proportion of people employed with level 4 certificates in nursing who arrived in New Zealand from 2002 to 2006 was the same as the average across all fields of study. However, the proportions with diplomas and bachelors were lower than the averages across all levels of study. These figures suggest that migration is not helping ease the shortage of people with level 4 certificates.

Other Health

The fields of study included here in other health are pharmacy, dental studies, optical science, public health, radiography and rehabilitation therapies.³

Previous findings

The first report noted that there was a high demand for health associate professionals across these areas, particularly retail dispensary assistants, dental therapists, physiotherapists and occupational therapists. In the professional health occupations, supply and demand seemed to be more evenly matched for these areas.

The second report found that people with other health qualifications were more likely to work as health professionals or associate professionals. Those with qualifications at diploma level and above had relatively low unemployment rates. People with bachelors in other health areas were generally paid more than others with the same level of qualification.

The report concluded that increasing the number of people with bachelors in other health areas could contribute to addressing skill shortages. For people with qualifications below degree level there may also be issues about conditions and attractiveness of employment.

Trends in completion of qualifications

From 2002 to 2006, there was a steady increase in the number of people completing level 4 certificates and bachelors degrees in other health fields. The number of completions at diploma level remained steadier.

Figure 8: Number of people completing other health qualifications by level

In level 4 certificates, the largest number of completions was in 'other health', which covers paramedic and first aid trainer certificates. This was also where there was the most growth. The other areas are rehabilitation therapies and public health.

Diplomas cover 'other health', rehabilitation therapies, public health and pharmacy. The most significant growth has been in public health, while there has been a decline in diplomas in dental studies.

There is a large and growing group of bachelors degrees that have been coded to the 'other health' detailed field. These were mostly bachelors in health science where courses had not been coded to a specific health area. The largest specific area of completion has been rehabilitation therapies. There has been overall growth in completions in all areas except optical science. (Note that dental studies is subject to a funding cap).

Figure 9: Number of people completing other health qualifications by level and narrow field

In 2006, 67 percent of level 4 certificates were completed at a private training establishment, 14 percent at an institute of technology or polytechnic and 10 percent through an industry training organisation.  At the diploma level, 39 percent were completed at a private training establishment, 37 percent at an institute of technology or polytechnic and 24 percent at a university. Eighty-two percent of bachelors degrees were completed at a university and the rest at an institute of technology or polytechnic.  These proportions have been fairly stable over the last four years.

Comparing supply and demand

The comparison of supply and demand suggests that the overall supply of graduates in other health areas was at least sufficient to cover occupational growth and retirements. Supply was particularly strong for level 4 certificates. This may reflect efforts to extend the proportion of the workforce with recognised qualifications.

A further breakdown by narrow field reveals considerable variation. Pharmacy and dentistry appear to be undersupplied with graduates. Both areas have had occupational growth and have a number of employees nearing retirement. Public health and other health would appear to be significantly oversupplied, particularly at level 4. Rehabilitation therapies is meeting demand, with a shift towards more people attaining bachelors degrees in this area.

These figures need to be interpreted with some caution. The demand figures rely on coding of qualifications in the census. This coding may differ at the narrow field level from the coding of qualifications by tertiary education organisations. This is likely to be a problem with public health and other health qualifications in particular.

Effects of migration

The proportion of people employed with other health qualifications who arrived in New Zealand from 2002 to 2006 was less than the average across all fields of study.

Looking at the narrow fields of study, generally the proportion of people employed who arrived from 2002 to 2006 was lower than the average across all fields of study. The exceptions were diplomas in public health and certificates and bachelors degrees in rehabilitation therapy.

Other Fields of Study

Accountancy

The first report noted that there appeared to be some shortages of accountants, particularly auditors. The second report concluded that there was evidence to suggest that increasing the number of accounting graduates could help reduce shortages in this area.

From 2002 to 2006, around 800 to 1000 people graduated each year with bachelors degrees or above in accountancy. The model suggests that this number has been insufficient to meet the effect of occupational growth and retirements, leaving an overall shortfall of supply compared with demand.

The proportion of people employed with a bachelors degree or above in accountancy who arrived in New Zealand from 2002 to 2006 was 16 percent, compared with 14 percent for all fields of study. These figures suggest that the shortage from New Zealand graduates may have been partly met by inward migration.

Finance and sales

In the first report, shortages of finance and sales associate professionals were noted. The second report concluded that there was no clear evidence that increasing the number of graduates would address skill shortages in this area.

From 2002 to 2006, around 2,000 people a year graduated with bachelors degrees in the area of finance and sales and about 250 to 300 with diplomas. The model suggests that there could be a shortage of people with diplomas in finance and sales. However, this is more than made up for by a strong supply of people with bachelors degrees.

The proportion of people employed with a diploma in finance or sales who arrived in New Zealand from 2002 to 2006 was 13 percent, compared with 8 percent for all fields of study. For bachelors and above, the proportion was 8 percent, compared with 13 percent for all fields of study. This suggests that the shortfall at diploma level is being balanced by higher inward migration.

Human and welfare studies and services

The first report found that there was an ongoing shortage of social workers due to low graduate supply, recruitment and retention difficulties and the demands of study on the current workforce to upgrade their qualifications to meet the new registration requirements. The second report concluded that there was no clear evidence that increasing the number of graduates would address skill shortages in this area.

The number of people completing a diploma in human and welfare studies and services increased from 500 people in 2002 to 750 in 2006. The number completing a bachelors degree increased from 420 to 580. The model suggests that the supply of graduates has been more than enough to cover occupational growth and retirements. Some of the extra supply will be due to current employees upgrading their qualifications to meet registration requirements. Even so, there is no evidence from the model to suggest that further increasing the number of graduates would address occupational shortages.

The proportion of people employed with a diploma in human and welfare studies and services who arrived in New Zealand from 2002 to 2006 was 4 percent, compared with 8 percent for all fields of study. For bachelors and above, the proportion was 9 percent, compared with 13 percent for all fields of study.

Behavioural science

The first report found that there were ongoing shortages of psychologists. The second report found that there was no clear evidence that increasing the number of people with qualifications related to this occupation would reduce skill shortages.

From 2002 to 2006, around 1,250 people a year graduated with bachelors degrees or above in behavioural science. The model suggests that this is more than enough to cover occupational growth and retirements.

The proportion of people employed with a bachelors degree or above in behavioural science who arrived in New Zealand from 2002 to 2006 was 11 percent, compared with 14 percent for all fields of study.

Law

The first report found that there was some evidence of shortages of qualified barristers and solicitors. The second report found that there was clear evidence to suggest that increasing the number of people qualifying in law could help address skill shortages. The shortages were probably driven by demand for legal services in property and resource management as the construction industry grew.

From 2002 to 2006, around 1,800 people a year graduated with bachelors and above in law. The model suggests that the current supply of law graduates at bachelors and above is more than sufficient to cover occupational growth and retirements.

The proportion of people employed with a bachelors degree or above in law who arrived in New Zealand from 2002 to 2006 was 7 percent, compared with 14 percent for all fields of study.

Food and hospitality

The first report identified that there were shortages of butchers, bakers and chefs and that low levels of training in these areas may be a contributing factor. The second report concluded that there was no evidence to suggest that increasing the number of graduates would help reduce skill shortages.

From 2002 to 2005, the number of people completing level 4 certificates in food and hospitality increased from 740 to nearly 1,200. In 2006, the number dropped back to 1,050. The model suggests that the number of people completing level 4 certificates is more than enough to meet demand from occupational growth and retirements.

The proportion of people employed with a level 4 certificate in food and hospitality who arrived in New Zealand from 2002 to 2006 was 4 percent, compared with 5 percent for all fields of study.

Summary

Table 27 below summarises the findings for each field of study discussed in this report. It shows whether the trend in the number of graduates decreased, remained the same or increased, and then shows if graduate numbers entering the workforce were less than, equal to or greater than the net number of vacancies in related occupations, as set out in the model. The shaded boxes indicate the fields and levels where the number of graduates has fallen short of the estimated demand from occupational growth and retirements.

Table 27: Summary of trends and supply and demand across fields of study (2002-2006)

The analysis in this report both confirms and modifies the conclusions from earlier reports.

The areas where all three reports have consistently found evidence of a shortage of graduates are engineering and technologies, architecture and building . A closer examination of the engineering and technology area revealed particular shortages in civil engineering and across industrial, manufacturing and mechanical engineering and technology. All three of these broad areas have had increased demand due to the construction and infrastructure boom from 2000 to 2007. Demand for qualified employees has also increased within these areas due to developments in technology. There is also a reasonably large proportion of the current workforce nearing retirement age. The only increase in graduates in these areas has been at level 4, mostly through industry training. Provider-based training does not appear to have grown to meet increased demand for diploma and degree-level qualifications. Shortages of people with bachelors qualifications and above have been met by inward migration.

In the medical studies, nursing and health fields the overall supply of graduates has been sufficient to meet occupational growth and retirements. Inward migration has been similar to other fields of study. These findings modify the conclusions in earlier reports about skill shortages being driven by insufficient graduates. However, there are likely to be graduate shortages within some specialist areas. There is evidence of a shortage of graduates with level 4 certificates in nursing to work as health-care assistants. Closer examination of the 'other health' area found particular shortages in pharmacy and dental studies. There may be also be shortages within some medical and nursing specialisations that are not captured in the data used in this report. Other areas may be oversupplied. However, the data in this report is insufficient to draw a definite conclusion.

This report suggests a shortage of people with postgraduate qualifications in information technology . There has been high reliance on migration to fill shortages at this level. However, this report confirms the findings in the earlier reports of an oversupply of people with lower-level qualifications in this field.  The other area of shortage suggested in this report is accountancy . This strengthens the findings in the earlier reports of a shortage in this area. There is no evidence in this report of a shortage of graduates in law, which was highlighted as an area of shortage in the second report.

Footnotes

1. 'Other' includes environmental engineering, biomedical engineering and fire technology and rescue services.
2. The University of Auckland's Bachelor in Human Biology has not been included, as it is an intermediate qualification and was discontinued in 2004.
3. Veterinary studies and complementary health (naturopathy, acupuncture and traditional medicine) have not been included.