New Zealand's $48 billion service industry is heading for a critical shortage of workers.

A new report by economic firm BERL says the industry will need 200,000 workers by 2020.

Chief executive of Service IQ, and industry training organisation, Dean Minchington told Mike Hosking the service sector is undervalued as a career.

"What we always seem to forget is that a third of the jobs in the service sector are medium to high high-skill jobs. So there are very strong opportunities for long-term careers."

Minchington said 200,000 is a big number, and they can't sit back and do nothing about it.

"I think it's not just going to be about recruitment - I think we've got to get smarter about the way we approach it and upskilling people, looking at all the avenues."

LISTEN ABOVE AS DEAN MINCHINGTON SPEAKS WITH MIKE HOSKING