The service situation: $48 billion industry at risk

  • Opinion
  • May 4, 2017
  • Dean Minchington
The service situation: $48 billion industry at risk

An industry that employs almost one in three New Zealanders is at risk. ServiceIQ chief executive Dean Minchington says more training and support is needed for in industry to grow. 

A new report on the service industry notes that ‘without these people our health and safety, and sense of national wellbeing, would be profoundly compromised.’ It also notes that another 200,000 workers will be needed in the service sectors between now and 2020.

Despite this size, and the contribution of $47.8 billion to New Zealand’s GDP, the service sector and its workforce is rarely seen as a critical cog in the nation’s economic effort. Regrettably this perception is perpetuated by analysis (and media stories), which portray the sector as plain-vanilla with unskilled workers, and so offering few career prospects, says the report.

This introduces the risk of skills shortages, reduced productivity, and impacts on both businesses and the customers they serve says.

International tourists spend $10 billion here, but domestic tourists spend even more – $14 billion, and both are growing. But whether you’re from overseas or a local, you expect and deserve great service at retailers, hotels, attractions and restaurants, bars and cafés. The service sector adds value to everyone, whether on holiday or not, by providing great customer service and memorable experiences.

The strong performance and projected growth is good news for the economy and especially for the regional New Zealand, with MBIE identifying the need to disperse visitors across all regions.

But there’s a big concern about ensuring the service sector has the right mix of trained and skilled people. As the report says: ‘To build and maintain our reputation as a great place to visit, New Zealand also needs to offer great customer service as well as great experiences. This is where training and ensuring an appropriate mix of skills, knowledge and qualifications is important.’

One common misperception is blown out of the water by the report. Many people think that up-skilling and training programmes leading to qualifications are for young people straight from school.

In fact, in our service sectors people under 19 make up just 16% of those completing on-job training programmes. Just under half are aged between 20 and 29, and more than a third of people are 30 or older. This proves that the service sectors offer life-long opportunities to earn and learn, gain new skills, and develop a rewarding career.

The challenge now is to increase the numbers of current employees that are in upskilling programmes, and have in place a better process for new service sector employees to engage in on-job training. This will benefit them as they gain skills and develop careers, benefit their employers who will have access to a more capable workforce, and benefit every New Zealander and visitor to our country as they interact daily with service sector organisations.

ServiceIQ, as part of the At Your Service Aotearoa initiative, is looking forward to discussing with government agencies and industry representatives the insights this report has uncovered. We believe that the labour and skills shortage issues can be addressed by working with the community, industry and local and government agencies.

At Your Service Aotearoa is a collaboration between four industry training organisations that provide workplace training across the service sector. These ITOs are ServiceIQ, Skills Active, Careerforce, and HITO.

The BERL report, At Your Service Aotearoa: A well qualified workforce in your community is available at

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