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Skill levels of New Zealand jobs

About half of all New Zealand workers are in jobs that can be categorised into the two most highly-skilled groups.

This finding is from new analysis of Household Labour Force Survey (HLFS) data categorised into five job skill levels, ranging from highly skilled to lower skilled.

Skills matter. This article looks at the composition of the employed population by these skill levels, and how this composition has changed over the period 2009–12. It sets out what skill levels are and the predominant jobs at each skill level. These skill-level measures complement occupation information already available from the HLFS.

Key findings include:

  • Over one-third of New Zealand workers hold highly-skilled jobs (the highest of the five categories).
  • Full-time work is much more likely to be skilled than part-time work.
  • The jobs done by employed teenagers move from lower skilled to highly skilled as they become young adults.
  • Skill levels differ significantly by ethnic group.
  • There are roughly the same proportions of men and women in the most highly-skilled and lower-skilled groupings, but there is a significant difference in the middle range of skills such as technicians, trades, receptionists, and clerks.
  • There are more highly-skilled jobs and fewer lower-skills jobs than three years ago.
  • Canterbury jobs show signs of rebuild, with more skilled workers, but fewer lower-skilled workers.

What is a skill level?

The Australian and New Zealand Standard Classification of Occupations (ANZSCO) assigns an occupation to one of five skill levels. A skill level is based on the range and complexity of tasks performed in a particular role. Generally, a skill level is measured by the level or amount of required formal education and training, on-the-job training, and previous experience. The greater the range and complexity of the tasks, the higher the skill level of an occupation. Skill level does not relate to the qualifications obtained by an individual, but to the range and complexity of the tasks they do at work.

Table 1 shows the different ANZSCO skill levels.

Table 1

Skill level 1
Highly skilled 
Skill level 2  Skill level 3
Skill level 4  Skill level 5
Lower skilled 

See How skill levels are determined for a detailed description of the skill levels.

Skill levels of jobs in the HLFS

The HLFS surveys about 30,000 individuals (aged over 15 years) from about 15,000 households each quarter. About 18,000 of surveyed individuals are employed. We ask these people about their title and main tasks or duties. Using this information, we then assign an individual to an occupation within ANZSCO.

Table 2 shows the skill levels assigned to the predominant range of jobs (by occupation and industry) in the HLFS.

Table 2

Skill level  Occupation and industry 
1 – Highly skilled   Managerial and professional roles mainly in these industries: education and training (teachers); professional and technical services; health and social assistance; and agriculture (farmers and farm managers).  
2  Managerial roles in the accommodation and retail industries, and support workers in the health and social assistance industry. 
3 – Skilled   Technicians and trade workers in the construction, manufacturing, and other services industries. 
4  Carers and receptionists in the health industry; road and rail drivers in the transport industry; and clerks, operators, drivers, store people, process workers in the manufacturing industry. 
5 – Lower skilled  Sales workers in the retail industry; factory process workers in the manufacturing industry; accommodation, farm, forestry, and garden workers in agriculture; and cleaners and laundry workers in administration. 

Figure 1 shows the proportion of workers by skill level.

Figure 1

Graph, Proportion of employed by skill level, December 2012 quarter.

In the December 2012 quarter, around 37 percent of the employed population worked in highly-skilled (skill level 1) occupations; 22 percent in skill level 4; 16 percent in lower skilled (skill level 5); 13 percent in skilled (skill level 3); and 11 percent in skill level 2 jobs.

Skill levels by sex

Figure 2 shows the proportion of employed people by skill level and sex.

Figure 2

Graph, Proportion of employed by sex and skill level, December 2012 quarter.

Figure 2 shows that in the December 2012 quarter, about half of men and women worked in jobs in the two top skill levels and about half in jobs that are skilled or lower skilled (skill levels 3–5).

The biggest differences are between skill level 3 and skill level 4. More men were in skill level 3 occupations, while more women worked in skill level 4. This is due to the types of occupations that fall within the different skill levels. Men are more likely to work as technicians or trade workers, and these roles are skilled. Women are more likely to work as clerical and administrative, or community and personal service workers, which are skill level 4 occupations.

Full-time and part-time work

Skill levels differ most between full-time and part-time employment. For those working full time, 1 in 3 people are in highly skilled occupations compared with only 1 in 5 working part time. Lower-skilled occupations make up 40 percent of part-time work but only 15 percent of full-time work.

Employed youth by skill level

Figure 3 shows the proportion of employed teenagers and young adults by skill level.

Figure 3

Graph, Proportion of employed teenagers and young adults by skill level, December 2012 quarter.

Of the 1 in 3 teenagers (15–19-year-olds) who are in work, their jobs tend to be in skill level 4 or skill level 5 occupations (4 out of 5 employed; 56 percent in skill level 5 and 23 percent in skill level 4).

Unlike teenagers, young adults (20–24-year-olds) have a diverse skill profile. This is a transition age group where some are still studying, some working part time and others are working full time. The number of young adults employed rises to two of every three young adults.

Skill level by ethnic group

Skill composition also differs by ethnic group. Almost half of European and Asian people work in skill level 1 or level 2 occupations, while over half of Māori and Pacific peoples work in skill level 4 or level 5 occupations.

Figure 4 shows the breakdown of skill levels by ethnic group.

Figure 4

Graph, Proportion of employed by ethnic group and skill level, December 2012 quarter.

Māori and Pacific peoples have lower participation rates in education overall. The other important characteristic of Māori and Pacific populations is that they are younger on average, and younger people have a skills profile more likely to be in the lower skill categories (skill levels 4 and 5).  

How skill levels have changed since 2009

Since 2009, the numbers of people working in skill level 1 and level 2 occupations have increased, while there has been a decline in the numbers of those working in skill level 5 and level 3 jobs.

From the start of 2009 through to the September 2010 quarter, the number of people working in skill level 4 occupations declined.

Figures 5 and 6 show the numbers of skill level 1 and skill level 5 occupations from 2009–12.

Figure 5  Figure 6 
Graph, Workers in highly skilled jobs, quarterly, March 2009 to December 2012.    Graph, Workers in lower skilled jobs, quarterly, March 2009 to December 2012.

Rising employment in highly-skilled occupations

The number of skill level 1 occupations has risen since 2009. The proportion of employment in highly-skilled occupations has risen, from 34 percent in 2009 to 36 percent in 2012. In the health industry, highly-skilled occupations have been rising over this period, mirroring industry growth in employment. There has also been growth in the number of highly-skilled occupations in the education; agriculture; and professional, scientific, technical, administration, and support industries. Occupations in these industries tend to be highly skilled: health (49 percent); professional, scientific, technical, administration and support services (55 percent); education (71 percent); agriculture (58 percent).

Skill level 2 occupations recover after dropping in mid-2011

The number of skill level 2 occupations rose between March 2009 and March 2011, except for a drop in the six months to September 2010. Since then the number has been rising. From 2009 to 2012, skill level 2 employment grew in the health industry, but there has been little change over the last two years. In 2012, the number of skill level 2 occupations in the construction and accommodation industries grew slightly. Increases in the number of jobs in the accommodation industry were mainly managerial positions. 

Drop in employment in lower-skilled occupations

In 2012, there was a drop in skill level 5 employment in the agriculture, manufacturing, and administration industries. The fall in employment at this level in agriculture was only for part-time employment, while the administration and manufacturing industries saw falls in both full-time and part-time employment. It’s surprising that the fall in skill level 5 occupations did not come from the retail trade and accommodation industries – the two largest industries with skill level 5 occupations.

Lower-skilled employment falling for teenagers

Teenagers (15–19 years) have seen a fall in lower-skilled employment in the last four years. Skill level 4 occupations for teenage women also fell. Most skill level 5 jobs for teenagers are in the retail trade, accommodation, and agriculture industries, while skill level 4 jobs tend to be in accommodation. Employment in these industries shrunk for teenagers but grew overall.

For young men (20–24 years), highly-skilled employment has grown since 2009, while skill level 4 jobs picked up from 2011. There was little change in skill composition for young women over the last four years.

From 2009, employment has been growing for young adults in the accommodation industry, which has mainly skill level 4 jobs.

Canterbury shows signs of rebuild

In the Canterbury region, the number of people employed in highly skilled, skill level 3, and skill level 4 jobs rose in 2012. However, lower-skilled employment fell over the same period. Within skill level 3 employment there has been an increase in the number of technicians, and within skill level 4 jobs a rise in machinery operators. The retail industry in Canterbury has decreased since the March 2011 quarter and is partly behind the fall in skill level 5 jobs. A large proportion of these jobs are in retail trade. 

For more information contact:

Daniel Griffiths and Nathan Young
Wellington: 04 931 4600

Published 2 May 2013, in Economic News: May 2013

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