Posts in category: New Zealand Employment

Letters from the Southern Man

Migrating is more than just filling in forms and submitting paperwork, its a complex process that will test even the most resilient of people. 

Understanding New Zealand is paramount to your immigration survival and to give you a realistic view of the country, its people and how we see the world, read our weekly Southern Man blogs. Often humorous, sometimes challenging, but always food for thought.

Skills Shortages set to worsen

 

Skills shortages are starting to bite.

With commodity exports continuing to bring high, if not record, prices, an economy that is growing at 3-4% and the rebuild of Christchurch moving from damage assessment to rebuilding phase the labour market is tightening and tightening quite quickly.

I speculated this time last year that by the first quarter of 2012 employers not willing to look offshore or employ migrants in the country looking for work would by now be finding it increasingly difficult to fill vacancies.

It appears I may have been right.

Skills shortages are well documented in many areas but most noticeably:

• Construction (all areas)

• Engineering (Civil and Design specifically but not exclusively)

• Trades

• Information Technology

• Telecommunications

• Banking, Finance and Insurance

There are others that are feeding indirectly off the rebuild in Christchurch along with farming and forestry. The rebuild of Christchurch is meant to take ten years and is going to inject $30 billion into this economy.

I cannot see it happening in ten years however as the skills will simply not be there to achieve it unless there is a big turnaround in outward migration or a massive increase in inward migration. Already the Canterbury Chamber of Commerce is talking about being 32,000-35,000 skilled workers short by mid 2013. 

To put the size of the opportunity (for migrants) and the problem (for New Zealand) in perspective if the ten year rebuild timeframe is to be met experts tell us that one commercial (forget residential) building will need to be handed over every four days for a decade.

Think about it and the workforce that will demand.

A workforce that saw thousands of skilled workers heading to a more buoyant Australian economy during 2009-2010. This flow is likely to reverse somewhat as their economy cools and ours heats up but many will have built new lives and their skills are equally in demand in Australia and won’t be charging back home any time soon.

It is interesting that in the past fortnight I have taken on two clients who were able to secure IT consulting jobs (in one case one of the clients turned down the first job in preference of a second) without being in New Zealand for interviews. One has never stepped foot in New Zealand.

With 2 Degrees, New Zealand’s third mobile phone provider rolling out its operation we are seeing increasing competition in the market for Telecoms skills – from technical through to marketing and Customer Service.

With the $1.5 billion roll out of fibre optic cable across those parts of New Zealand that don’t yet have it we are also seeing demand start to outstrip local supply for the skills required by that sector.

What I cannot understand is why the Government has yet to increase its skilled migrant numbers. You will recall in an earlier blog I uncovered the lie that is the Government’s Skilled Migrant Category immigration targets. The annual quota of 27,000 (plus or minus 10%) was replaced this immigration year with a three year rolling target of 81,000 plus or minus 10% when it was clear the Government had no intention of issuing anything like its quota of skilled migrant visas last year (and this).

Interestingly with two thirds of the current immigration year over the Government has issued less than 12,000 skilled migrant and Investor category visas. Annualise that and you get perhaps 18,000 visas against a target of 27,000. Every year about this time fingers are pulled inside the Immigration Department and the numbers of approvals jumps but even it that happens I cannot see more than 20,000 visas being issued – tops. That's at least 7,000 fewer sets of skills we need this year alone.

This means that in the next two years the quota becomes over 30,000 per year to reach target.

Assuming they only approve the same number next year as this, then in the third year the Government needs to issue over 40,000 skilled and investor residence visas or twice as many as they are heading for this year.  I question any real committment to this three year target and by next year our skills shortages will be worse than bad – I imagine many sectors will be in crisis.

The fact is the Immigration Department does not have the capacity to process that many visas even if the Government wanted them to. So migrants, employers and New Zelanders are being mislead. 

I was told by the head of the Immigration Department a year ago that the numbers of skilled migrants selected from the pool will increase when the economy improves (it has – growth is expected to approach 4% this time next year) and when unemployment falls (it has, it is down to 6.2%) and when skills shortages emerge (hello!!).

It is interesting also that this week the Government has felt confident enough jobs are being created to implement the first of its long overdue welfare reforms in an attempt to persuade the one in eight New Zealanders of working age (18-64) who are on some form of state benefit (handout) to get off their backsides and find a job. 

But in continuing to suppress migrant numbers to deal with a political issue they are creating a huge problem. The simple reality is that skilled migrants do not compete with the 16 year school drop out, the solo mother or the 55 year old meat worker who was replaced by a machine – there is very little if any competition between the local unemployed and my clients – never has been and never will be.

The Government needs to begin selecting, approving and granting more residence visas to those skilled migrants we need or this time next year we will have employers screaming for skills and an economy being held back when they cannot.

And Christchurch’s rebuild won’t take a decade, it will take two, and by then many of the locals will have left. And New Zealand will fail to capitalise on the opportunities a growing export driven economy will be creating.

If it could be avoided it might be so bad. This however is simply bad management by the Government.

Until next week

 

Southern Man – Iain MacLeod

Employers - What will you do when the skill shortages bite?

Work Visa – Perspective for employers

With unemployment levels for the over 25's now at 4.5% and falling, skills shortages are beginning to build. With the Government having cut skilled migrant numbers (for the time being I am told), I give it six months and the impending skill shortages will start to bite and cause real frustration for employers. 

As the economy continues to strengthen and the rebuild of Christchurch gets underway, next year there is little doubt that if you are a New Zealand employer and you take advantage of skilled migrants looking to settle in NZ then you will be a step ahead of the competition in terms of recruitment.

I remember so vividly the final 18 months before the GFC where employers simply gave up trying to recruit locally but many did not think about recruiting offshore or found the prospects daunting and confusing. Even we were in on the act. We needed a PA type role filled in our Auckland office and in the end offered the position to a client who was coming to NZ from South Africa – we simply could not find any locals who had the skill set to fill the vacancy.

I believe it will be approximately 12 months before we will be back there again barring any major offshore decline in economic fortune or local disaster.

Understand that the basis of Work Visa policy is to ‘protect employment opportunities for New Zealanders’. Many would argue this is as it should be – we need to look after our own first. That policy foundation is unfortunately often misinterpreted by immigration officers who appear to go to great lengths at times to try and prove to the employer that even though no locals bothered applying for the position there are plenty who should be able to.

There are two types of Work Visas most commonly applied for (there are many others but this blog would quickly become a book). These are:

1. Essential Skills – a policy designed effectively for one off appointments; or

2. Talent – these are for migrants being offered employment by ‘Accredited’ employers. Accreditation is given to ‘trusted’ employers (upon application) and who usually have an ongoing need to recruit offshore.

1. Essential Skills - The broad criteria for employers looking to offer a position to a non-Resident or Citizen under this category are:

(i) You have made a genuine effort to fill the vacancy but have been unable to and that no local ‘should’ (note not ‘could’) be able to fill the vacancy and you can prove it.

(ii) The migrant is suitably qualified by training or experience to fill the vacancy;

(ii) Your business is able to sustain the employment;

(iii) You are paying ‘market rates’

(iv) You have a track record of being a good employer;

Perhaps strangely, policy does not allow an employer to offer the migrant the position because they are the ‘best’ applicant; they must be the only ‘suitable’ applicant. This goes against logic but since when is immigration policy logical? Many employers are tripped up by the subtle differences between being the best versus the only ‘suitable’ applicant. It isn’t usually hard to present evidence of why, if as an employer, you were lucky enough to get any locals applying, that your preferred candidate was the ‘only suitable one’.

How do you prove that no local should be able to fill the position?

In my more cheeky (and lucid) moments I suggest – just advertise it.

There is in New Zealand an utter dislocation between the unemployed and employers. Most skilled people in the major urban centres are employed. Those that are unemployed are either unemployable or unmotivated. 

Regardless of the evidence the employer presents, for example online job advertising, the Immigration Department generally goes through this bizarre ritual whereby they contact Work and Income New Zealand (WINZ) and seeks their opinion on whether locals ‘should’ be able to fill the vacancy. WINZ is this giant public service division, that in part exists to place the unemployed in work. Something they are pretty useless at doing in my experience.

So why does the Immigration Department rely on WINZ for labour market advice? Simply put, it is because the Immigration Department has concluded using its own twisted logic that local employers are liars and they would far rather employ migrants and play this complicated bureaucratic visa game rather than employ a local. Yeah, right…

The reality is there are generally few locals registered as unemployed who want to apply for these vacancies.

You would be utterly amazed how often when employers place vacancies with WINZ themselves they get no referrals. In fact WINZ is so useless and the quality of those they might refer so bad most employers don’t think of ever looking to them for help. Unfortunately Government policy demands that they do.

We recently got two Work Visas for two nannies. We were able to demonstrate without too much difficulty that there are apparently no locals registered with WINZ who wanted to or were forced to apply for these vacancies. No applicants for these two positions – one in Auckland and one in Northland? Zero. None. Zip.

So knowing how the policy is implemented makes it relatively straightforward to get Work Visas for our clients without too much bother to the employer. You just need to understand what you are doing and the rules of engagement. I cannot recall the last time any of our clients did not get Work Visas simply because we know how the system works.

2. Talent Visas - This is a Work Visa granted to those who can demonstrate they have been offered genuine employment by an 'Accredited Employer' for which they are qualified and experienced to do, who meet health and character criteria and who have a minimum salary of $55,000.

I am surprised more employers don’t apply for accreditation status as it is not overly complex to get and once you have it then you no longer have to play the mindless game as outlined above under Essential Skills each time you need to employ someone. No proving that the applicant was the only suitable candidate for example. The only restriction is that this policy demands annual base salaries of not less than $55,000 which cuts out certain types of positions because it is higher in many cases than local market rates.

To get accreditation employers must be able to demonstrate:

(i) They have good human resource policy and practices

(ii) They are able to sustain ongoing employment

(iii) Two years of financial accounts

(iv) Evidence of any training offered to up-skill locals

(v) They have no record of dispute with local unions or for example the Employment (Disputes) Tribunal.

This is a really great option when skills shortages bite or employers have an ongoing need to recruit. For forward planning employers who may think that this time next year they might struggle to find locals then consider getting this status now – don’t wait till you need someone in four weeks! If the salary level is $55,000 plus then you’d be a mug to ignore the possibilities it gives you.

The accreditation application process isn’t overly expensive and is relatively painless if you want the assistance of licensed advisers such as the Immagine team.

Employing someone from overseas is not the hassle so many employers think it is (and this is a shameless plug for our services) but when you know what you are doing, when you understand the rules of engagement with the Department and when you know who to talk to when the counter level functionary processing the visa is giving you a tough time – there is no reason why getting a Work Visa for the person you want to employ should take more than four weeks.

And that of course is about the same time as the notice period any incumbent who is moving on would normally give you.

Food for thought before those skills shortages bite hard this time next year.

Until next week

Southern Man - Iain MacLeod