Marketplaces lack experienced leaders and sectors are hiring unqualified employees as unemployment rates increase yet again, with New Zealand economists predicting further increases for another year.

The official unemployment rate was announced yesterday at 4.3 per cent in the March 2024 quarter, compared with 4 per cent in the previous quarter, according to figures just released by Stats NZ. Over the year, the seasonally adjusted unemployment rate rose 0.9 percentage points, up from 3.4 per cent in the March 2023 quarter.

It was a figure that economists had predicted ahead of Wednesday, but it's not where the rate's climb ends. ASB economist Henry Russell told Newstalk ZB this morning that the rises were likely to continue into next year.

"The labour market is in a pretty weak position at the moment and it's likely to deteriorate further on our current forecast, we think the unemployment rate will rise to 5 per cent by the end of this year and peak somewhere in the region of five point five next year," he told Mike Hosking.

Hosking asked if the country was "just getting started" on an employment decline and still had a long way to go, and Russell agreed that was likely to be the case.

"The labour market is one of the most lagging indicators of the economy, so what we saw in the data yesterday is very much looking at where we have been rather than where we're going."

Where the country has been, according to sector experts, has been attempting to plug gaps and fill holes within workforces desperate for workers.

In the education sector, a PPTA survey found 56 per cent of principals had recently hired an either untrained or unqualified teacher for their staff due to workforce shortages.

President Chris Abercrombie told Hosking that a lot of it comes down to those being hired having a limited authority to teach. He said this might be someone without a qualification or it may be hiring people to teach subjects they aren’t specialised in.

"For instance, I'm a history teacher, I might be hired to do physics or something like that. I know nothing about physics," he said.

Asked if immigration was helping solve the issue, Abercrombie said it helped a part of, but not the whole problem.

"Overseas teachers have been vital to our system, but they're not a long-term solution. We have a unique system in New Zealand, it's very different to the overseas jurisdictions we tend to recruit from, so it's a lot of upskilling from new applicants coming through."

Hosking asked if the problem was made worse by the fact many principals didn't have a vast amount of experience to draw from when solving staffing issues.

"Absolutely, it's a big issue. We've had a whole suite of very experienced principals hit their retirement age and so we've got a bunch of new principals at the moment."

This issue isn't just specific to the education sector. Kendall Langston, the founder of Pivot & Pace, told Hosking that many industries lacked what would be considered sound institutional knowledge - many haven't led through rough economies.

While he agreed New Zealand had walked through worse economic situations back in the 1900s, there were gaps in the country's business leadership capacities that were costing on the employment front.

"We have low productivity, we have low levels of engagement - that's an output of leadership and you know, for too long we've winged it - there's now a real focus on development and professional development," he said.

"The reality is there's well over half the people in New Zealand's businesses that have been here less than two years, most haven't led through a tight market."

He said the recession and inflation impacts, combined with the closure and re-opening of the border had a "huge" impact on the country's employment rates. He said from an executive level, many were comparing the industry climates before and after Covid-19 like night and day.

"This time last year you'd be getting a handful of people that are suitable applicants, [but] in two situations in the last couple of weeks we've seen well over 60 applications that are pretty good quality for some of these roles."

Langston said wages were holding for the moment, but that there were situations it "tipped back" towards the employers.

"You know, there's more negotiation, there's certainly more uncertainty in the job market and people are mindful of their jobs and security," Langston told ZB.

Reflecting on what was learned through the Covid-19 pandemic, which led to the current economic climate, Langston said one key thing businesses understood was how little investment had been put into the area of raising leaders.

While good people will always have work, Langston said, the challenge was around building good leaders and bringing quality young talent through. When it came to leadership, he said it's tough to frontload 10 years of industry experience in a short time frame.

"In my opinion, there's a convergence of inter-generational change," he said.

"We've got Covid, we've got tech, we've got young people coming through into the workplace, and so that's happening anyway but it was starkly brought into our horizon when the borders shut and suddenly there was nobody in the job market that we could employ."

Langston said young people need to be led differently and require a more hands-on approach.

"They need guiding, coaching and mentoring. There are many upsides for young people coming through into the workplace."