More New Zealand organisations plan to increase headcount over the next year as their growth prospects improve, but four out of five CEOs are concerned they won't be able to find people with the skills needed to fill these positions.

"The gap between the skills of the current workforce and the skills businesses need to achieve their growth plans is widening," says PwC New Zealand CEO Bruce Hassall on the results of the PwC report The talent challenge: Adapting to growth. "Despite rising business confidence equating to more jobs, organisations are struggling to find the right people to fill these positions."

PwC says it surveyed over 1300 CEOs in 68 countries, including 43 in New Zealand. It finds that after years of reducing headcounts, half of the organisations are looking to hire again globally.

According toPwC, 80 per cent of New Zealand CEOs - compared to 63 per cent globally - say the availability of key skills is the biggest business threat to their organisation's growth,

Moreover, technology and engineering firms are struggling the most with the shortage of skilled employees.

Taking advantage of the developments in HR data analytics to predict the skills they will need and plan for changes in demand and supply will be crucial.

An overwhelming majority of New Zealand's business leaders (90 per cent) say they need to change their strategy for attracting and retaining talent, although three in five haven't taken any steps to do this yet.

"CEOs need to re-think the way they think about, look for and value their employees. Taking advantage of the developments in HR data analytics to predict the skills they will need and plan for changes in demand and supply will be crucial," says Hassall.

"Businesses need to get out of the mindset that new skills equals new people," notes Hassall. "The most successful organisations will combine recruitment with developing their own people to be more adaptable to its changing plans."

As well, CEOs need to make it a priority to help their HR function get ready for the challenge ahead. "CEOs know that talent strategy has to change, but too many have wavered in execution. There's no time left for inaction," says PwC.

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PwC also calls for greater use of HR analytics, saying identifying what's needed could be the single biggest differentiator for global employers. "That means making full use of HR analytics, and feeding the results into the formation of future strategy."

The report finds CEOs believe the government must take its share of responsibility for developing future labour supply. Forty-six per cent of New Zealand's CEOs say creating a skilled workforce should be one of the top three government priorities, and 11 per cent say creating jobs for young people should be a top agenda for government.

While CEOs feel that government has an essential role in developing skills, they don't feel that it is meeting its obligations. Just over a quarter - 29 per cent - of New Zealand's CEOs feel government had been effective in improving workforce skills.

The report, however, points out this should be a joint effort between government and businesses. "Employers have a vested interest in the education and training system -- working together would benefit everyone," it concludes.

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