Bubble baths and better data

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1 Bubble baths and better data Getting a better understanding of replacement rate for workforce analyses 11 September 2017 Adam Barker: adam.barker@scarlatti.co.nz Hannah Binnie: hannah.binnie@scarlatti.co.nz

2 Disclaimer Access to the data used in this study was provided by Statistics New Zealand under conditions designed to give effect to the security and confidentiality provisions of the Statistics Act The results presented in this study are the work of the authors, not Statistics NZ. 2

3 Contents Overview of study Our approach Results I: Dairy Farming Results II: Comparison with other industries Conclusions 3

4 4 Overview of study

5 Context for this research Lots of organisations do workforce analyses Tertiary providers Industry groups Government departments Used to: Create policy e.g. for immigration settings Set investment levels in tertiary training 5

6 An ideal workforce is like a nice bath Enough workers With skills With experience 6

7 Flows into, and out of, the bath Bubble bath mix poured right into the bath Just one tap (cold water) Bubble bath mix into the cold water at the tap Slow, steady heating The plug is out 7

8 Sources of demand in the workforce Workforce growth (the bathtub needs to be more full) Skill growth (need more bubble bath mix to get a frothier bath) Replacement demand (water, heating and soap to replace that lost down the plughole) 8

9 What do we want to know? How long do employees stay around for in an industry? How likely are new employees to stick around? What age are employees when they enter an industry? How are these answers impacted by age, gender or ethnicity? 9

10 10 Our approach

11 What we are analysing Illustrative only (not derived from IDI data) Workforce at a point in time = March 2008 This person works intermittently in the industry This person works continuously for 10+ years in the industry 11

12 Tenure as a measure Illustrative only (not derived from IDI data) Time so far Time to go 12

13 13 Results I: Dairy farming

14 How long does it take someone to work for 1 year? Time taken to complete 12 months of tenure in the dairy farming industry 61% 60% of new recruits are retained for less than one year 15% 13% 2% 2% 2% 5% Never1 Exactly Time taken (years) 14

15 How much experience does the workforce have? Tenure profile of individuals in the dairy farming industry in 2013 (% of total workforce) 26% A flatter profile = more experienced workforce. Steeper profile = less experienced workforce. 15% 10% 8% 7% 7% 7% 5% 5% 5% 5% Years of experience 15

16 Segmentation of workforce Illustrative only (not derived from IDI data) Casual segment Core workforce 16

Replacement rate Fabricated data for illustration purposes only this image is not derived from IDI data B A C Total net replacement rate = A+B A+B+C This is the net replacement of

17 Replacement rate Fabricated data for illustration purposes only this image is not derived from IDI data B A C Total net replacement rate = A+B A+B+C This is the net replacement of individuals with any level of tenure so far. Core net replacement rate = B B+C This is the net replacement of individuals that have accumulated more than one year of tenure so far. 17

18 Net replacement rates in the dairy farming industry Size of core workforce (000s) Workforce Leavers Recruits Size of total workforce (000s) Core net replacement rate 11.7% 12.0% 11.9% 13.7% Total net replacement rate 28.2% 28.8% 28.6% 33.1%

19 Cohort retention 100% Retention of individuals entering the dairy farming industry in the period This is the proportion of new individuals entering the industry that go on to accumulate a given number of years of tenure 42% 29% 23% 18% 14% 11% 8% 5% 3% Tenure (years) 19

20 Age at first employment Age profile of dairy farming industry entrants 24% 23% Approximately 50% of industry entrants are over 25 when they first start dairy farming 14% 8% 5% 5% 4% 3% 2% 1% 2% Age 20

21 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Month of initial employment Number of recruits into dairy farming per month 21

22 22 Results II: Comparison with other industries

23 Comparing tenure profiles between industries Dairy farming 26% 15% 10% 8% 7% 7% 7% 5% 5% 5% 5% 14% Beef and sheep 9% 7% 6% 6% 6% 6% 5% 5% 5% 32% Forestry 27% 17% 11% 9% 6% 5% 6% 5% 5% 4% 5% Years of experience 23

24 Comparing tenure profiles of non-primary industries Carpentry 16% 10% 7% 6% 7% 6% 6% 5% 5% 5% 27% General practice medical services 36% 11% 9% 7% 6% 6% 6% 5% 4% 5% 4% Years of experience 24

25 25 Conclusions

26 So what can we conclude from this? Tenure is a useful measure of movements to and from an industry. We need a robust measure of replacement rate. Retention of new recruits is low. A large number of new recruits are aged 25+. Further work is required to refine this measure. 26

XML Publisher Balance Sheet Vision Operations (USA) Feb-02

XML Publisher Balance Sheet Vision Operations (USA) Feb-02 Page:1 Apr-01 May-01 Jun-01 Jul-01 ASSETS Current Assets Cash and Short Term Investments 15,862,304 51,998,607 9,198,226 Accounts Receivable - Net of Allowance 2,560,786