Manufacturing and engineering
As a significant employer and contributor to GDP, the engineering and manufacturing sector is a critical enabler of industry across the Waikato, which requires skilled and qualified staff at all levels.
With an ageing workforce, new ways of recruiting, training and retaining workers are essential for sustained sector growth. Apprentice and cadet programmes are widespread in engineering career pathways and emerging in the manufacturing sector. The approach to skills training, certification and on-the-job learning requires rejuvenation and new models of targeted delivery.
Manufacturing has been crucial in cementing the Waikato as Aotearoa New Zealand’s agricultural powerhouse, with dairy product manufacturing accounting for 62% ($9,295.3 million) of the sector’s contribution in 2020.
Manufacturing is a key contributor to the economy, providing 11.3% of total jobs and contributing 10.9% of total GDP for the Waikato region in 2021 (a total GDP contribution of $700 million over the last 10 years) and is the third highest growth industry in Waikato, based on jobs created.
When surveying RSLG stakeholders about whether the Manufacturing sector should be a focus area in the RWP, nearly 100% agreed. The Group used the data from Infometrics, survey feedback, as well as insights from Waikato Engineering Careers Association (WECA) and the Waikato RSLG Manufacturing, Engineering and Logistics industry representative to build their knowledge on the sector.
Largest employing sub-industries, Manufacturing, 2021
|Rank (out of top 50)||Industry||Jobs||% of total|
|12||Cheese and other dairy product manufacturing||2916||1.4%|
|19||Engineering Design and & Engineering Consulting Services||2363||1.1%|
|38||Machinery and Equipment Manufacturing||1429||0.7%|
Employment by 2-digit occupation in the manufacturing sector in Waikato RSLG Area, 2021
|Occupation||Manufacturing||Total Waikato RSLG Area|
|Employment||% of total||Employment||% of total|
|Factory Process Workers||3,527||14.7%||5,009||2.4%|
|Automotive & Engineering Trades Workers||2,472||10.30%||6,248||3.0%|
|Machine & Stationary Plant Operators||1,485||6.20%||3,206||1.5%|
Industry representatives noted that funding businesses to train people quickly in-house is a priority across the region. There is real concern regarding retaining institutional knowledge such as highly specialised, high value trade skills within the industry. Waikato Engineering Careers Association (WECA) members have voiced the need for support to see highly skilled ageing workers moving away from the tools and more towards a teaching and mentoring role. Employers appreciate the value that these workers add to their industry, and are acutely aware that as trades workers age, they often wish to reduce their degree of physical work and may opt for early retirement from the industry if there aren’t management or coaching roles to transition into. WECA members also reflected their commitment to worker wellbeing and list the benefits of a mentoring scheme as allowing ageing workers to be physically able to continue in their careers longer; younger people gaining valuable, specialised skills; and retaining institutional knowledge.
Labour and skills shortages continue to be the top workforce challenge. A September 2020 WECA survey in conjunction with Employers and Manufacturers Association (EMA) showed 22% of respondents report finding entry and mid-level staff has become more difficult for businesses; while 32% report finding highly skilled staff is extremely hard. At the time collectively, 37 respondents were carrying a total of 198 vacancies that they needed to fill. The sector has a reasonably high reliance on specialist migrant labour with 35% of all Employer Assisted Temporary Work Visas in the region issued for Technicians and Trades Workers. Top occupations in this group include Machinists, Fabricators, and Mechanics. This would suggest opportunity to attract and train a local workforce to step into these specialist roles.
Looking to the future, based on employment forecasts, manufacturing in Waikato will experience 1 to 2% growth over the 2021 to 2027 period, reaching 24,887 workers in 2027.
Waikato RSLG Area - Manufacturing Sector Profile(external link) — Infometrics Ltd.
Research from the Productivity Commission indicates that New Zealand’s productivity is not keeping up with international competitors.
“The skills required will need to reflect the future demands and drivers for change, as well as strategic drivers. For example, if global supply chains continue to become disrupted or changed, this may strategically require more regional industry to be self-sufficient, and more independent from other parts of the world or regions, changing the demand for skills and resources. Additionally, the need for supply chain and partnerships in linking to external resources will also be needed, as manufacturing is reliant on a whole system, end to end approach.” — Waikato RSLG survey response, December 2021
Case study: Fonterra dairy processing apprenticeship
Fonterra Co-operative developed a pilot in 2020 with the Primary ITO and FITT board to undertake an industry apprenticeship programme under the DAIRYCRAFT qualification framework (NZQA L4). Fonterra had identified the barriers associated with early career workers and the issues associated with a mature and ageing workforce. The programme was developed for transition school leavers through a 30-month programme which is designed to result in ongoing employment in the industry and leave the candidate with transferable skills applicable in the dairy processing industry.
The pilot was run at Dairy Processing Sites including Hautapu in Waikato. The first cohort of early career workers who entered the pilot in the 2020/21 season and the initial trial has produced positive results:
- 84% of the initial candidates completed the apprenticeship
- All of whom transitioned to ongoing employment with Fonterra
On the back of these outcomes, Fonterra has looked to expand beyond the pilot to introduce the programme across the wider Manufacturing business and is looking at introducing similarly structured training programmes for early career entry to different parts of their business.