The Australian Journal of Construction Economicsand Building [Vol6, No 2)   55  

011 u "··"'" u 7 

 
 

The Effects of Occupational Licensing on Skills Needs in the 
Building Industry: Evidence from New Zealand 

 

Yadeed B Lobo (Department of Civli and Environmental   gineerin. University of uck 
New zealand) and Suzanne Wilkinson (Department of C1v1l and Environmental Engmeenng, Umvers1ty of 
Auckland, Auckland, New Zealand) 

 

 
 
 
 

ABSTRACT   
 
 

Occupational licensing for the building industry is 
being introduced in New Zealand. This research 
assesses whether the licensing regime being put 
into place in New Zealand would require new 
skills when voluntary licensing (2007) and 
compulsory licensing (by 2011) are introduced. 
The paper develops a deeper understanding of 
the effects of occupational licensing on an 
industry, above those of increased quality and 
training, to determine  the effects of licensing on 
future skills needs in the New Zealand building 
industry. The results of the in-depth interviews  of 
35 leading practitioners in the New Zealand 
show how occupational licensing will affect skills 
in the industry in two main ways: increase 
professionalism and increased specializa ioin 
skills. The impact on the New Zealand bU1Id1ng 
industry will be to force a change in the working 
practices, increasing the move to offsite   . 
prefabrication and change the types of sk1lls the 
industry requires. The paper serves as an  . 
illustration  to other countries on how changes 1n 
legislation, and the introduction of regulation for 
an industry, alter the working practices of that 
industry. 

 
 

Keywords:Skills, Building Industry, Occupational 
Licensing, New Zealand 

 
 

INTRODUCTION   
 
 

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common way for governments to exert control 
over professions, whilst promoting quality goods 
and services. The main objective of this research 
was to assess whether the licensing regime 
being put into place in New Zealand would 
require new skills when voluntary licensing 
(2007) and compulsory licensing (by 2011) were 
introduced. In this paper, an overhaul of the New 
Zealand building industry with respect to the 
introduction of occupationallicensing is 

discussed. The paper develops a deeper 
understanding of the effects of occupational 
licensing on an industry, above those of 
increased  quality and training, to determine the 
effects of licensing on future skills needs in the 
New Zealand building industry. First the 
definition of the term occupationallicensing is 
presented. Then its effects on skills and skills 
shortages are analysed. New licensing regimes 
in the New Zealand building industry are 
reviewed  and the potential impacts of these 
regimes are discussed from the perspective.of 
top industry players in government, compan1es 
and industry training organisations. The paper 
serves as an illustration of how central 
government control through licensing impacts on 
the lives of all building participants and 
consumers in both positive and negative ways. 
The paper also shows how the introduction of 
licensing can change the landscape of an 
industry. 
 
 
OCCUPATIONAL LICENSING IN THE 
BUILDING INDUSTRY AND ITS EFFECTS 

 
 
Licensing is seen as state regulation that protects 
the public from the incompetent  or unscrupulous 
practitioner, but it could also be understood to be 
used by occupational groups to restrict entry at 
the expense of public interest (Zhou, 1993). The 
definition of licensing ithe context of regulation of 
the labour market 1s defined in Arkani et al(Arkani 
et a,l 2003) as 
"...a set of rules embedded  in a structured 
institutional framework, whether at local or state 
level that determine, orchestrate or bind 
reiationships between capiiai  and iabour 
prevailing  in a teffitoryn. Kleiner (Kleiner, 2000) 
and Arkani et al. (Arkaniet a,l 2003) both point 
out that occupational licensing is a set of rules by 
government which restricts entry to a profession 
through some demonstration of a minimum 
degree of competency. This is usually done 
through a licensing board who manage the 
licensing process, including fees and 
registration, and sets the entry requirements 



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(Kleiner, 2000). Significantly, in a licensed 
occupation it is illegal to practice without a 
license. 

 
 

Studies indicate that licensing  causes not only 
wages to increase but also restricts the current 
number of practitioners  leading to skills 
shortages (Carrol and Gaston, 1983; Kleiner. 
2000). Authors who have studied licensing agree 
that the main effect of licensing is improved 
quality of service provided for the consumer 
(Carrol and Gaston, 1983; Kleiner, 2000). The 
quality of the work or service will increase as 
less competent individuals are prevented from 
entering the occupation.  In terms of quality, 
Carroll and Gaston (Carroll and Gaston, 1983) 
argue that more stringent restrictions  deliver 
higher quality of service. In addition to improved 
quality, another advantage of licensing is better 
training as licensing imposes minimum 
competencies on a person in that occupation, 
which almost always need to be met by training. 
Better training also has an impact on quality as 
the trained person can provide a reasonable 
guarantee of the skill level of work undertaken 
(Kleiner. 2000). 

 
 

The main disadvantage of licensing is increasing 
wages (Perloff, 1980; Carroland Gaston 1983, 
Kleiner, 2000). Increased costs arise from the 
increase in the cost of labour as well as that of 
the associated services (Rottenberg, 1980). 
Licensing an occupation in terms of entry-level 
restrictions causes the supply of labour to the 
occupation to become restricted.It can reduce 
the number of new entrants to the occupation as 
individuals  consider the cost of entering an 
occupation and passing/failing exams 
(Rottenberg,1980).  Licensing can also restrict 
movement of labour between industries as 
different licensing regimes  tend to preclude 
transfer or restrict movement between industries 
(Perloff, 1980). 

 
 

A recent example of builder licensing is found in 
Victoria, Australia.This system was introduced 
for licensing  of building practitioners (Georgiou et 
al.. 1999). With the exception of architects. who 
had their own Registration Act,most 
practitioners  were required  to be registered 
(Georgiou et al.,1999). The system was created 
primarily  for the housing section of the market. 
(Georgiou, 2000; Building Control Commission, 
2003). Georgiou (Georgiou, 2000) outlines 
licenses for 3 classes of domestic building work: 
domestic building work (unlimited license). 
domestic building work (limited license) and 

domestic building work (managers' license). The 
system does not seek to impose licensing on all 
skills within the industry (Building Control 
Commission, 2003). The licensing system has in 
place a system of competencies to be satisfied 
for registration,which have to be assessed. 
Rather than describing the skills which the 
individual should possess the discussion papers 
(Building Control Commission, 2005) revealthat 
knowledge and the ability to do work are used. 
More specifically the competencies are defined 
in groups of work practice, professional practice, 
construction technology and legislation. Each of 
these groups has defined within itself the specific 
tasks, which a person who is licensed as a 
practitioner in that category is required to be able 
to accomplish. Building practitioners  usually 
have to be trade or tertiary qualified with some 
exceptions of training through certificate  courses 
(Georgiou, 2000). This system is markedly 
different from that proposed in New Zealand. 
 
 
THE NEW ZEALAND LICENSING  REGIME 
 
 
In New Zealand the Built Environment Research 
Agenda of the Construction Industry Council's 
Construction Liaison Group estimates that the 
built environment  is New Zealand's biggest 
physical asset with a value of $275 billion, and 
added to at the rate of $11 billion a year (CIC, 
2005). There are currently few entry-level 
restrictions imposed by government in the New 
Zealand building industry. Engineering  and 
architecture have restrictive entry provisions in 
the form of professional registration 
requirements and at the trades level, plumbing, 
gas fitting and electricians also have registration 
boards. The failure of the building industry in the 
recent past (Hunn et al., 2002) in part caused the 
government to overhaul the Building Act 
(Building Act, 2004) and introduce the licensing 
of building practitioners.  Thus regulation of the 
industry in terms of licensing of skills is to be 
implemented; specifically, voluntary licensing in 
2007 and compulsory licensing between 2009 
and 2011 (DoBH, 2005). The New Zealand 
Department  of Building and Housing estimates 
that a minimum of 25,000 people will seek 
licensing of which 22,000 will require to be 
assessed and nearly 11,000 will require some 
degree of upskilling (DoBH, 2005a). However, 
New Zealand is facing a current skills shortage, 
and concerns have been expressed about the 
introduction of such a licensing regime at times 
of employee shortages (NZIER, 2004). Staff 
shortages in building are higher than in the other 
sectors (NZIER, 2004a). In 2005, a shortage of 
staff was holding back expansion for over 70% of 



The Australian Journal of Construction E<onomics and Building (Yol6, No 2)    57 
 

building industry finns (NZIER, 2005). For skilled 
construction  worker vacancies advertised in May 
2004 the average vacancy fill rate was 35% 
(Dol,2004), a fill rate lower than 80% is 
indicative of a shortage and lower than 40% of 
an acute shortage (Do,2l 006). The most severe 
need was for bricklayers. The Labour Cost Index 
(Do,l2005) has recorded a wage rate increase 
of 4.3 percent for the construction industry 
between September 2004 and September 2005, 
the highest for any industry in the past year. 

 
 

A number of different questions can be raised 
about the effects of licensing on future skills.Will 
licensing have an effect on skills in the building 
industry? Will skills shortages be further 
exacerbated  due to licensing?  Will licensing lead 
to a change in direction in skills? Skills shortages 
and occupational licensing are being specifically 
used to account for Osborne and Bell's (2005) 
observation that future skills needs analysis in 
OECD countries should take into account 
medium to long tenn variations occurring in 
occupational classifications in the context of 
changes taking place in the economy. 

 
 

The residential sector of the building industry in 
New Zealand failed the consumer in the recent 
past. Specifically  an investigation (Hunn et al., 
2002) into the weather tightness issue in the 
New Zealand building industry was sceptical 
about the quality of service provided on site and 
made a list of recommendations to be 
implemented. Recommendation 16 was 
concerned with the skills of practitioners. It 
stated (Hunn et al., 2002) "That the BIA (Building 
Industry Authority) in conjunction with the 
appropriate affected sector groups:  a) Explore 
the issues involved in advocating the national 
registration  of builders and building related 
trades, given the contents of this report and 
concerns expressed  about the standards of 
some trade practices on-site; and b) support 
such advocacy if it is convinced of the benefits to 
the Industry". 

 
 

Whiie the iicensing of trades in the foffli of 
Accredited Building Practitioners was suggested, 
the report (Hunn et al., 2002) envisaged a 
system wherein differing levels of responsibility 
had different licences. This report influenced the 
government to legislate the Licensing of Building 
Practitioners under Part 4 of the Building Act 
2004 (Building  Act, 2004). The Ministry of 
Economic Development (MED, 2003) 
recommended a mandatory  licensing regime. 
Only restricted work, work critical to the integrity 

of the structure of a building, would be required 
to be done by a licensed building practitioner. 
Restricted work (DoBH, 2004) would be work 
that requires a consent, is structural or part of 
the building envelope, and represents a 
significant risk to health and safety if not done 
properly. As of July 2005,restricted work for the 
purpose of reference of licensing practitioners 
involved (DoBH, 2005b) foundations, structural 
framing, cladding, external doors and windows, 
and roofing. As of July 2006, three types of 
building projects would require licensed building 
practitioners  (DoBH, 2006a): 
 
 

1.  Construction of new buildings for 
occupation  as workplaces or places of 
residence. 

 

2.  Projects to change the use of a building 
(e.g., from an office to an apartment). 

 
3.  Major alterations or extensions to an 

existing occupied building (e.g. adding a 
bedroom or an extra floor). 

 
 
The Building Act (Building Act, 2004) also made 
provision for the consolidation of the different 
arms of the government dealing with the building 
industry. As a result of this the New Zealand 
Department of Building and Housing was 
established in 2004.Licences for practitioners 
would be granted by the Registrar of Licensed 
Building Practitioners who would be employed by 
the Department. A Building Practitioners Board 
was designated  within the Department be in 
charge of setting license standards. The final 
license classes after the consultation process 
were: 
 
 
• Three building design licences and three 
building site supervisor licences based on 
building complexity. 
 

• Seven specialist licence classes across all 
categories of building complexity  (3 specialist 
building licences, which apply across all building 
categories were concrete structure, steel 
structure and building services and 4 trade 
licenses were carpentry, external plaster 
systems, roofing, brick and block laying)(DoBH, 
2005b). The DBH document (DoBH, 2005) 
proposes the establishment of these specialist 
and trade licenses using the justification that the 
site supervisor would not be competent  in all 
these areas and hence a specialist license class 
sign off is necessary. For instance, the 
Department of Building and Housing state that, 
for roofers, "It is likely that many Licensed 



 

 

Building Practitioners holding a specialist licence 
are competent only for a subset of work within 
that licence class. For example, there are five 
major roofing types and practitioners  tend to 
specialise and be fully trained in one or two 
roofing types, rather than all of them. Similar 
situations may arise in the other specialist 
licence classes" (DoBH, 2005b). 

 
 

The timetable for implementation proposed is: 
(DoBH, 2005) Systems/Processes in place for 
licensing, assessment  and training provision end 
of 2006, Voluntary licensing begins 2007, 
Licensing of compulsory restricted work by 2011. 

 
 

The potential impacts of licensing in the New 
Zealand building industry are not well 
understood. The general effects such as 
increased quality and higher labour costs have 
been considered, but what is not understood is 
the effects this licensing regime will have on 
future skills needs in the building industry. 
Would, for instance, the changes  lead to 
increased specialisation or increased 
generalisation? The Ministry of Economic 
Development (MED, 2003a) believed that the 
proposed licensing regime would result in 
barriers to entry for building practitioners with the 
requirements of, and cost of, registration being 
the key influencing factor in the New Zealand 
context. The positive impact detailed by the 
report (MED, 2003a) was that it would lead to an 
increase in skill levels in the industry. 

 
 

RESEARCH METHODOLOGY 
 
 

The main objective of this research was to 
assess whether the licensing regime being put 
into place in New Zealand would require new 
skills when voluntary licensing (2007) and 
compulsory licensing (by 2011) were introduced. 
The way in which this research objective was 
achieved was a mix of qualitative and 
quantitative research. Grounded theory 
technique identified  by Glaser and Strauss 
(Glaser and Strauss, 1967) and Glaser (Glaser, 
1992) was used in the research. This type of 
research has an emergent methodology where 
the side-by-side  comparison of theory emerging 
from the collected data is used to understand the 
research problem. Data was used to identify, 
understand and compare issues, which were of 
relevance  to the main research objective. 

 
 
 

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The fieldwork research method adopted was 
semi-structured interviews.The mode of 
interviewing was semi-structured as the 
participants had the freedom to discuss issues, 
which were not included in a particular question, 
and also the researcher was permitted to probe 
into certain topics, which were considered 
relevant. The questionnaire and sample 
interviewee list were subjected to the University 
Ethics approval process.All participants were 
informed that their views would be kept 
anonymous and only aggregate results would be 
reported.  The pilot questionnaire was 
constructed using the literature review as a 
basis. This was then subjected to consultation by 
asking experienced individuals  for input in the 
preliminary discussions stage or the pilot study. 
By incorporating the pilot study feedback more 
focussed and appropriately  framed questions 
were obtained. 
 
 
The key strategy used for selecting the sample 
was that all participants would have to come 
from diverse areas of the New Zealand building 
industry. This diversity of participants  would help 
by providing a very generalist understanding of 
the issues under investigation.This is similar to 
what is termed as a cross section study in the 
field of public health or epidemiology (Olsen and 
StGeorge, 2004). This technique allows for 
choosing a stratified random sample of 
individuals. In other words,individuals with 
certain subgroup characteristics such as 
belonging to a particular part of an industry or a 
certain type of sector such as regulator, training 
provider etc. were selected and no particular 
group was overrepresented.A similar data 
collection approach in the New Zealand building 
industry was used by Hunn et al. (Hunn et al., 
2002). 
 
 
The interview sample was selected from both the 
New Zealand Construction Industry Council 
(CIC) website and Building Research 
recommendations. Individuals  chosen were 
either experts in their field or were leaders of 
their organizations.35 people were interviewed, 
between 1 and 2 hours duration,from industry 
associations/professional associations, 
academia, technical organisation, Government 
(including local and centralgovernment), unions, 
construction contractors, industry experts, 
property developers and subcontractors. 
 
 
The data obtained from the fieldwork was broken 
down into categories  and then subcategories. In 
other words, a taxonomicalor hierarchical 



 

approach to data organization was adopted. This 
led to the data being analysed by using the 
quantitative technique of descriptive statistics. 
From this analysis an objective view of the coded 
and categorised data was obtained. These 
outcomes were then compared and contrasted to 
the available literature. The software used to aid 
the analysis was QSR International's NVivo 
suite. NVivo uses grounded theory as a guiding 
principle. Here, the taxonomical approach to 
categorization of data in terms of themes is 
followed. In other words, the context of the 
answers helps to provide and link answers and 
explanations and provide richer analysis of the 
data. This suite was selected as it helped to 
categorise responses in context and with links to 
original quotations and documents, and has the 
ability to provide data models rather than 
numbers. 

 
 

THE EFFECTS OF THE 2007 VOLUNTARY 
LICENSING AND 2009 COMPULSORY 
LICENSING ON SKILLS 

 
 

By 2007 voluntary licensing will be available in 
New Zealand.   The research aimed to see 
whether the licensing regime being put into place 
in New Zealand would require new skills when 
voluntary and compulsory licensing were 
introduced. 

 
 

Out of a total response of 33, 18 participants felt 
that there would be changes in skills 
encompassed within occupations when voluntary 
licensing was introduced. The belief was that 
practitioners  at  the  skill  levels  of  high 
(designated as professionals and managers), 
intermediate (designated as technicians and 
trades) and low (designated as site workers) 
would increase in specialization when licensing 
was introduced. This would mean that job 
descriptions would become narrower and 
narrower, akin to the advent of subcontracting in 
building construction. There would be a move 
towards a more focussed skills set. Out of a total 
of 18, 11 participants mentioned that skills would 
become mom specialized. Only 1 participant felt 
that generalist skills would be needed. 

 
 

From the construction firm perspective one can 
see  that  specialisation  is already  beginning  to 
take root. A supporting comment for increased 
specialisation in architecture summed up the 
changes as: "There  are definitely moves in our 
industry to get subsets as whole that are 
specialised  in  some  areas.  Take  for  instance 

architecture. We are seeing subsets forming in 
concept architects and back of house design 
architects...Under the back of house, you are 
a/so getting another specialist group whichis 
around the far;ade and water tightness type 
speciality and also acoustics.n 
 
 
The intermediate level and high level of skills are 
particularly  faced  with  the  possibility   of 
increasing specialisation in skills in the next two 
years. The answers point towards an increasing 
emphasis on specialization but having the same 
core  set  of  basic  skills   needed  to   perform 
fundamental tasks. Essentially, the influence of 
occupational   licensing   is   speeding   up   this 
process.  This  is  because  the  structure  being 
proposed points towards specialist  practitioners 
being  needed  both  on  the  design  and 
construction  side of  the  building  industry. For 
instance,  comments  from  a  participant  with  a 
carpentry background suggested that "Carpentry 
schools in the old  days used to encompass a 
whole range of  disciplines. As we grow and a 
building  becomes  more  advanced,  technology 
and  buildings  become  more  systemized  we're 
going to have specialist areas so I suggest our 
training in the future will be more specific and in 
disciplines that are more specialized n. 
 
 
The effects of licensing were seen to be in line 
with  the   Ministry  of   Economic  Development 
(MED,  2003a)   assessment   of   better   skilled 
practitioners. The word best used to describe it 
would   be  that   of  "professionalism".   That  is, 
licensing would be the defining factor in raising 
the esteem of practitioners themselves and their 
own standing in society. Licensing would ensure 
a minimum threshold of competency is fulfilled. 
Increasing Professionalism due to licensing was 
found to be  the  common theme  amongst  the 
participants. 
 
 
One issue of concern, raised by about a quarter 
(8/33) of participants was that occupational 
licensing would increase  skills shortages which 
in tum would restrict any new skills or change in 
diiection of skills. Foi instance, one part;cipant 
noted  that,  "There  are trades  and  professions 
and areas where there is already a serious 
shortage of workers even now despite the 
willingness of employers to take on semi-skilled 
labour to do the work. It could be exacerbated by 
licensing." 
 
 
2009  (recently  changed  to  2011)  is  the  year 
designated by the New Zealand Department of 
 

 

n.-'"'""'"of( """"'"""''""""''"".,.6, No" 



60   The AustralianJournalof ConstructionE<onomics and Building [Vol6,No 2] 
 

Building and Housing as the time by which all 
identified practitioners will have to be licensed to 
work in the industry. The participants were asked 
whether,  with  compulsory  licensing,  they 
believed they would need new types of skills. A 
majority of participants felt that there would be 
changes in skills by this stage. The most 
significant change would an attempt to decrease 
the labour input by increasing prefabrication and 
off site mechanised construction. 

 
 

For example, a typical comment was, "So what 
you're going to see in construction will be an 
attempt to reduce the labour input both on site 
and  in  materials  supply  to  site.  So  my 
expectation  is that you'll  see far more off site 
house building. And with it you'll  see a whole 
different set of skills being brought into factories 
and you'll get far less site specific skills." 

 
 

With the increase in prefabrication and off site 
construction, new skills would be required. The 
trend   was  a  mixture  of  both  types  of  skills 
(generalist  and specialist) in  order  to  facilitate 
and  increase  the  penetration  of  prefabrication 
and the simplification of the building process by 
requiring specialist off site and generalists  with 
systems thinking  skills  on site  for assembly of 
parts of the structure. Concern was evident on 
how the industry would be able to find the people 
required.   " All  of  a  sudden  you   will  have  a 
percentage of the people that are sort of semi- 
skilled not being able to do any work and as it is 
at the moment we can't get enough people out 
there to work in the construction industry. We are 
struggling  now  to  get  enough  people, a 
percentage of them are under skilled, you take 
those  away, it's  going  to  create  a  huge  gap 
there." 

 
 

The exodus of semi skilled practitioners due to 
licensing, the ageing of the current  practitioner 
workforce who would be retiring and the lack of 
new entrants into the industry  due to increased 
competition from other industries  were  seen to 
be key drivers for efficiency gains in the building 
industry  and  changes   in  skills   requirements. 
Expectations were that licensing would exercise 
a  severe  capacity   constraint  on  the  existing 
workforce by limiting the number of new entrants 
and  increasing  temporarily  the  loss  of  retiring 
participants  uninterested  in becoming  licensed. 
These  skills  shortages  would  be  one  of  the 
factors which would limit a change in the skill's 
balance of generalist and specialist practitioners. 
However, this is against an identified  trend for 
both, and new, types of practitioner (generalist 

and specialist) being needed due to the apparent 
increasing market penetration of  prefabrication; 
specifically, more generalist practitioners on site 
and more specialist  practitioners involved in off 
site construction. 
 
 
DISCUSSION: THE EFFECTS  OF LICENSING 
ON FUTURE SKILLS                                          
 
 
Occupational licensing  could  be seen  to  have 
three  effects in the context of skills needs. Two 
of these effects are clearly pointed out in the 
literature from other industries, and  countries, 
which   have  licensed  professionals.   The  first 
being improved quality of service through 
improved skills and restrictive entry and the 
second an increase in skills shortages. These 
effects  are   confirmed  in  this  research  which 
shows an expected increasing professionalism in 
the New Zealand building industry after licensing 
is introduced. The results of this research also 
agree  that  the  licensing  regime  would 
exacerbate  skills  shortages  in  New  Zealand. 
From 2010, the  exodus of semi skilled 
practitioners not intending to gain licensing, 
retiring    practitioners,   and   the   lack   of   new 
entrants into the industry would compound the 
already existing skills shortage situation. 
 
 
The results extend the literature on the effect of 
licensing into a third area - that of future skills 
needs.   The   observation   that   the   way  an 
occupational  licensing  regime  is  structured  (in 
the  form  of  specialist  license  classes)  has  an 
effect on the change in direction of skills towards 
increasing    specialisation is   shown  in   this 
research.  Had   the   license   classes  been 
structured    to   allow  increasing   amounts    of 
flexibility,  that   is,  for   example,   a   generalist 
license for  a construction  contractor, then that 
would mean that multi-skilling  in trades {Clarke 
and  Wall,  1998)   or  trans-disciplinary 
professionals   (Wilkinson   and  Scofield,   1998; 
Chan et.al., 2001) would have been the direction 
of  skills  changes. By restricting  the  license  to 
specialist categories and requiring a qualification 
for   new   entrants,   licensing   dissuades   dual 
trades.   Higher   registration     and   license 
maintenance costs could  mean that more  than 
one license may not  be seen as  beneficial by 
new entrants. Multi-skilling could have alleviated 
some of the shortages caused by ageing of the 
construction workforce (Haig, 2004) and lack of 
new entrants (Dol,2006). 



The AustralianJournalof ConstructionEconomics andBuilding[Vol6,No 2)    62 
 

From the results of this research, it can be seen 
that New Zealand will require an increase in the 
number  of specialist and generalist practitioners 
where technology was seen to be the main driver 
of this trend and licensing as a driver of skills 
was seen to significantly influence this trend. 
Ultimately, the  results  suggest  that  for  New 
Zealand,  the  effects  of  licensing  means 
increasing skills shortage coupled with more 
advanced technology which would see the 
increased use of offsite or prefabricated 
components leading to a new mix of specialist 
and generalist practitioners. 

 
 

CONCLUSIONS: THE INFLUENCE OF 
OCCUPATIONAL LICENSING AND SKILLS 
SHORTAGES ON FUTURE SKILLS NEEDS 

 
 

New  Zealand  introduced occupational licensing 
as a way of protecting the public from building 
industry failures of standards and quality. 
Occupational licensing is beneficial to the New 
Zealand building industry in that it will lead to an 
increase in professionalism and improved 
standards of work. Whilst previous studies have 
found that quality of service improves in terms of 
better and more professional service proportional 
to the intensity of licensing no parallels exist in 
the literature for licensing leading to skills 
becoming more specialized or changing as a 
result of the way in which licensing is inherently 
structured. This research shows that in New 
Zealand, licensing will cause existing skills 
shortages to worsen. Specifically licensing would 
lead to existing skills shortages persisting due to 
the new implementation of an occupational 
licensing  regime  during  the  years  2007-2010. 
The impact  on the  building industry  will be  to 
force  a  change  in the  working  practices, 
increasing the move to offsite prefabrication and 
change the types of skills the industry requires. 

 
 

ACKNOWLEDGEMENTS                                   
 
 

The  authors  would  like to thank  Building 
Research for funding this research and Dr. john 
Duncan from Building Research for his support 
during this research. 

 
 

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