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The Pipeline of Potential
How New Zealand can better connect businesses with untapped local talent
One hallmark of a successful economy is its ability to connect employers seeking staff with individuals seeking work. To quote the title of IDEA’s latest report, it should generate The Pipeline of Potential – a steady stream of highly qualified people to fill job opportunities.
Too often, however, this connection is missed. In good times, firms struggle to find suitable and highly skilled staff. And jobseekers are poorly supported by a system that invests roughly half as much in them – in training, pastoral care and other welfare-to-work schemes – as the typical developed country would. The pipeline of talent, in short, remains blocked.
As IDEA’s report sets out, the damage this does to the New Zealand economy is significant. Companies struggle to reach their potential; productivity is reduced; talent is left unused. The unemployment rate and the benefits bill are both larger than they should be, and too many people face economic exclusion. Forces like AI just underscore the need to better support individuals through workplace change.
Yet we currently spend half the developed-country average on supporting the welfare-to-work transition. And what we do spend goes too often on ‘basic’ cookie-cutter services rather than ‘bespoke’ tailored plans to help people find employment.
To turn this situation around, The Pipeline of Potential sets out evidence-backed ideas for investments – in training, job guarantees and other supports – that could be the building blocks of a more dynamic economy. These schemes connect employers with jobseekers, enhance the latter’s skills and capabilities, provide firms with work-ready staff, and boost employment and incomes. They move from ‘basic’ to ‘bespoke’.
Such schemes, when used in other countries, typically lift participants’ chances of finding work by 5-12 percentage points and increase earnings by around 17%. A strategic use of these investments here could unblock the pipeline of talent and, in so doing, unlock the potential of Kiwi firms held back by a lack of skilled staff. The Pipeline of Potential sets out just how this could be done.