Business group warns skills crisis is now employers' top concern
The Employers and Manufacturers Association (EMA) has called on the next government to address a deepening workforce readiness crisis and resist the urge to overhaul employment legislation, as New Zealand gears up for a general election in November.
The EMA's 2026 Election Policy Directives, released on Monday, identify workforce skills and the stability of employment law settings as some of the most pressing issues facing the business community.
The directives reveal a striking shift in employer sentiment around workforce readiness. Just a few years ago, only around 35 to 40% of EMA members flagged work readiness as a key concern. That figure has since climbed to above 60%.
"The skills and work readiness of our emerging workforce is possibly our biggest handbrake on productivity," the document states.
EMA Head of Advocacy Alan McDonald was blunt about the scale of the problem, pointing to rising numbers of young people who are not in employment, education or training (NEET).
"The number of NEETs in the 18–24 age bracket continues its concerning rise," McDonald said.
"There is no doubt one of the drivers behind these numbers is a reluctance by employers to hire those new faces. They are simply not ready for the workforce, lacking many basic skills, and struggling with the simple disciplines of turning up, listening and engaging in the workplace."
The EMA is calling for an integrated workforce and skills strategy that aligns immigration, education, and employment policy to address long-term challenges rather than short-term pressures.
Specific asks include faster recognition of overseas qualifications, expanded micro-credentials, annual refreshes of immigration skills lists in partnership with industry, and a Pacific fly-in/fly-out visa.
Workforce readiness for AI
The organisation also raised concerns about New Zealand's preparedness for the rise of artificial intelligence.
The directives note that coding was only recently added to the school curriculum, and that some of the world's largest technology companies have already moved beyond the need for coders entirely, using AI to write code for them.
"Add in one of the most rapidly ageing workforces in the world, a general sluggishness to adopt and invest in new technology, and the advances of artificial intelligence and we risk being left behind as a country," the directives warn.
Stable employment reforms
On employment law, the EMA urges the next government to maintain stability and certainty.
The organisation is urging policymakers to allow the new Employment Leave Act, which replaces the long-troubled Holidays Act, time to bed in before any further significant changes are contemplated.
"None of the recent changes, which we see as moving in a positive direction for business, will endure if we face another round of political utu and change for its own sake," McDonald said.
"Reforms in areas such as the problematic RMA, infrastructure planning and implementation, education and immigration, fast-tracking energy generation, employment law and gains in Free Trade Agreements need time to settle and stick. That's regardless of who is in Government."
The EMA's employment relations priorities also include index-linking the minimum wage, removing living-wage mandates for government contractors, reviewing Employment Relations Authority dispute resolution processes, and introducing minimum standards for no-win, no-fee employment advocates.
McDonald acknowledged the cumulative toll of instability on business confidence, describing crisis management as having become routine for employers.
"Some calm would be a welcome respite," he said. "If whoever forms the Government can keep the major settings and guardrails in place, and make some adjustments around the edges, that's about as close to bi-partisanship as we can expect — and that level of stability would be welcome."
