How Is the Government Addressing the Labour Shortages?
New Zealand's labour shortage isn't a foreign issue to the Government, but it has worsened across the country and globally due to the impact of Covid-19. With many concerns and struggles to find employees, the Government is taking steps to address the worsening situation.
The Government wants to help the New Zealand immigration system align with a national goal of increasing NZ business productivity and supporting economic growth. The Government has already made changes in an attempt to rebalance the NZ immigration system, aiming to fill the skill shortages after the pandemic led to NZ's closed borders.
What Is Happening In the New Zealand Labour Market?
"Help wanted, inquire within!” – words that New Zealanders are now seeing so frequently across the nation.
Job ads show demand for labour is at record highs. This, combined with a record low number of people out of work (3.3% in June 2022), means it is getting increasingly harder to find workers.
The NZIER’s Quarterly Survey of Business Opinion shows firms are finding it very hard to recruit (hardest on record), and lack of labour is the biggest constraint to growing their business (meaning they cannot make or sell more products without more workers, which is a limit to business and thus economic growth).
This isn’t just a NZ issue, it’s been seen everywhere around the world because of the issues listed below….
The Shortage of Workers Around the World
As markets begin to stabilise and production levels are slowly rebounding to pre-pandemic levels, companies from around the world have yet another challenge to navigate: the ongoing labour shortage. In fact, there is estimated to be a shortage of 85 million workers around the globe by 2030.
These are acute skill shortages and also a generalised labour shortage across skill and income brackets.
For New Zealand specifically we are finding reasons such as…
Mismatched Skills
NZ Employers are reporting a mismatch in the skills advertised when applicants are applying for jobs, with a high proportion of applicants deemed to have a ‘lower skill level’ than the job advertised.
With fewer people to choose from, and only immigration now restarting, employers need to be resourceful. Possible solutions suggested are for companies to look at upskilling and implementing in-house training programmes to counteract this issue. However, this adds to the extra cost of onboarding new employees and is a longer-term solution rather than an immediate fix.
Recovering From the Pandemic
Generally, there has been a labour shortage in New Zealand for quite some time. However, due to travel restrictions implemented during the first stages of the pandemic and the resulting closure of New Zealand's borders in March 2020, this problem has compounded for New Zealand employers.
Several industries are recovering to pre-pandemic levels. However, manufacturing companies are not working at full capacity. The manufacturing industry suffered a shortage before the hit of the pandemic. There were studies that predicted globally there will be 8 million jobs that could go unfilled by 2030.
Labour shortages, specifically due to the closure of our borders for two years, have reduced our pool of immigrants who have been supporting our businesses, which in turn significantly reduced our workforce.
New Zealand's workforce before 2020 had been topped up with migrant workers entering on visas such as the skilled migrant visa NZ. However, coupled with the after-effects of the closure, we are still seeing major employment gaps across the board and new immigration policies that have caused further delays for New Zealand employers, which are not expected to improve until 2023.
New Zealand's economy desperately needs more people from overseas to fill vacancies. Immigration NZ introduced a Green List occupation list to prioritise some specific skilled labour roles. However, this is not a quick road to recovery for our Kiwi companies.
Worker Population Decline
Declining fertility rates will add to labour shortages over time, but the most recent factor has been the “Great Retirement”. There was a spike in most countries of what is referred to as “excess retirements” – the numbers retiring from the workforce at a higher rate than expected – during COVID.
How Has the Government Responded?
The Government is rebalancing New Zealand's immigration system to increase New Zealand's business productivity and increase the amount of highly skilled workers to support our economy's growth.
The Government hears the concerns of businesses as they continue to find it challenging to recruit internationally in this constrained labour market. The cry for help to attract more highly skilled applicants to relieve labour shortages, is guiding the Government’s decisions to ensure they respond with a more competitive edge to attract talent to New Zealand.
What Is NZ Doing to Help Fix the Problem?
NZ immigration policy changes focus on reducing critical skill shortages and boosting the economy, which is approached through various work, investment and residency visa changes.
Reopening Key Categories
Skilled Migrant Category
“We are resuming the Skilled Migrant Category under the current settings to help attract more workers. The first selection will be at 160 points, and subsequent selections at an increased threshold of 180 points, to better align with the future direction of the category and our rebalance goals.
The Skilled Migrant Category (SMC) visa was reopened and resumed (under the same settings previous to April 2020) on 9 November 2022. However, new and continuous changes are expected, as the Government's proposal has been submitted for consultation before it is implemented.
The October 2022 announcement included an increase in the points threshold from 160 to 180 from 18 January 2023.
INZ has proposed a simplified points system that sets a clear, fair, and transparent eligibility threshold for skilled residence.
Working Holiday Makers
In August 2022, the Government announced changes to increase access to working holiday makers, meaning more people can visit and work in New Zealand.
Capped schemes not yet filled had their cap doubled on 8 September 2022 and remain open.
The Government also announced that the closed schemes have specific re-opening dates, as listed below.
- Malaysia - 8 September 2022
- Uruguay - 13 September 2022
- Argentina - 15 September 2022
- Chile - 22 September 2022
- Taiwan - 29 September 2022
- China - 11 October 2022
- Hong Kong - 18 October 2022
- Brazil - 20 October 2022
- Vietnam - 25 October 2022
- Mexico - 27 October 2022
- Philippines - 1 November 2022
- Hungary - 3 November 2022
- Slovakia - 8 November 2022
- Austria - 10 November 2022
- Poland - 15 November 2022
- Lithuania - 17 November 2022
- Peru - 22 November 2022
- Turkey - 24 November 2022
- Portugal - 1 December 2022
There are extra places for working visas added (and for schemes that are currently closed, extra places that will be added in the near future) for different working holiday schemes for various countries and territories, as listed below.
- 3000 - Korea
- 1200 - Czech
- 1150 - Malaysia
- 1000 - Argentina, China
- 940 - Chile
- 600 - Taiwan
- 400 - Hong Kong
- 300 - Brazil, Singapore
- 200 - Israel, Mexico, Uruguay
- 100 - Austria, Croatia, Estonia, Hungary, Latvia, Lithuania, Peru, Philippines, Poland, Slovakia, Slovenia, Thailand, Turkey, Vietnam
- 50 - Malta, Luxembourg, Portugal
Parent Visas
The Parent Resident Visa restarted on 12 October 2022 and resumed selecting existing expressions of interest (EOIs) on 14 November 2022.
From May 2023, EOIs can be submitted online on the Immigration New Zealand website.
Any EOIs INZ received from 12 October 2022 went into a ballot, with the first random selection from the ballot in August 2023, then every three months after that.
Introducing Streamlined Visa Processes
Accredited Employer Work Visa
The most common work visa, it replaces 6 previous work visas. The streamlining introduces more criteria that the employer must follow to show a commitment to hiring New Zealanders first, and ensuring their migrant workers are looked after and settled well into this country.
As a part of the Government's rebalance announcement, the new Accredited Employer Work Visa (AEWV NZ) was introduced and requires employers to be accredited if they want to promote job vacancies overseas and hire migrants.
The Green List
The Green List Immigration NZ prioritises key roles needed to ensure the smooth running of the country. Attracting Medical professionals like nurses and doctors to grow the workforce alongside local graduates. However, this is not a quick road to recovery for our healthcare system.
The Green List makes it easier for employers to attract globally in-demand workers to New Zealand, but it is not the only pathway. Employers can still attract skilled migrants through a pathway to residence under the Skilled Migrant Category.
Applying for a New Zealand visa doesn't have to be overwhelming. Reach out to our experienced immigration advisers for advice and guidance on the process.
Median Wage Exemptions
For an interim period, the Government has also implemented sector agreements to help employers fill skill gaps. These agreements allow some exemptions to the median wage requirements for hiring migrant workers under the AEWV guidelines for specific occupations and sectors. This allows employers in the specific sectors an extension of time in order to make changes.
The AEWV scheme requires employers to pay a median wage of NZ$27.76 for migrant workers to qualify for an NZ working visa. The median wage will increase to NZ$29.66 in April 2023.
IT Improvements
The Government's immigration rebalance strategy aims to increase New Zealand's productivity and value by advocating for businesses to increase their investment in new business models and labour-saving technology, where appropriate. As they limit the low skilled permanent workforce businesses will need to adapt if this workforce is their main source of productivity output.
Support With Healthcare
There are several ways that the Government aims to improve the healthcare system and support New Zealand's growing and aging population. All of the health reform changes are designed to reduce the pressure on specialist and hospital care.
The Government has increased the budget for 3000 nurses and an additional 1000 healthcare places over a period of four years. They are also investing NZ$76 million to develop a primary healthcare workforce, including 1,500 training places for nursing, physiotherapy and pharmacy.
Read more about how the Government is supporting the future of New Zealand’s healthcare system here.
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Our highly experienced licensed Immigration team will take away the stress and worry of navigating the complicated world of New Zealand Immigration. All you need to do is get in touch. Our employer team is on standby, ready to help.
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Migrant Worker Residence
Today the government announced a pathway to residence for migrant workers who are living and working in New Zealand. Applications open on 1 December 2021 for the first wave who are eligible to apply. The second wave can apply from 1 March 2022. The deadline to lodge an application is 31 July 2022 or else they will miss out on this one off opportunity.
Skilled Migrants Opportunity
Today the government announced a pathway to residence for people living and working in New Zealand. Applications open on 1 December 2021 for the first wave eligible to apply. The second wave can apply from 1 March 2022. The deadline to lodge an application is 31 July 2022 or else you miss the boat.
New Employer Accreditation Process
The government has moved the introduction of the new employer accreditation process across to mid-2022. At the same time, the Minister of Immigration announced new work visa rules for migrant workers who are already in New Zealand and working full time.
Skilled Migrant Changes
The government has increased the median wage to $27 per hour from 19 July. Any Skilled Migrant residence application lodged after this date will need to include a skilled job offer that pays at least $27 per hour. For some lower-skilled occupations, the minimum pay rate increases to $40.50 per hour.
Work Visa Rules
From 19 July 2021
- The median wage used to assess Essential Skills Work Visa applications increases from $25.50 per hour to $27 per hour.
- Applicants paid below the median wage may be granted a work visa for up to 24 months. The usual 6-month visa validity restriction is suspended until mid-2022.
- In certain cases, the labour market test is waived and in some cases, it will still apply.
Work Visa Rules
From 30 June 2021
- Employer Accreditation and Approval in Principle applications are now closed.
- No new Employer Accreditation applications (including renewals) will be accepted until the new process goes live in mid-2022.
Employer Accreditation Becomes Mandatory
Employers of migrant workers must become accredited from 1 November 2021 before work visa applications can be processed. Most employers are not accredited. Those that are accredited will have to roll into the new system when it goes live in late September.
Work Visa Rules
From mid-2020 (delayed)
- Government to negotiate and introduce Industry Sector agreements setting minimum conditions for industries that heavily rely on overseas workers. Sectors include; residential care, meat processing, dairy, forestry, road freight transport, tourism, and hospitality. Construction, horticulture, and viticulture may also be included.
Skilled Migrant Changes
Skilled occupation "Dairy Cattle Farmer" spilt into three occupations. New occupations are: "Dairy Farm Manager", "Assistant Dairy Farm Manager" and "Dairy Herd Manager". Each sit at different skill levels, therefore, the award of points will depend on pay rates, job tasks and other requirements.
Work Visa Rules
From 15 February 2021
- Dairy Cattle Farmer job offers are now assessed by three new occupation descriptions: Dairy Farm Manager, Assistant Dairy Farm Manager and Dairy Herd Manager. Pay rates and job tasks will determine how long a work visa is valid. Take advice.
Skilled Migrant Changes
The government has deferred the fortnightly selection of Expressions of Interest from the Skilled Migrant pool for six months (to be reviewed in April 2021). Invitations to Apply for Residence remain suspended. The last selection from the Skilled Migrant pool took place on 18/03/2020.
Work Visa Rules
From 7 October 2020
- Introduction of "Oversupply" and "Undersupply" occupation lists used to assess Essential Skills Work Visa applications when a job offer pays less than the median wage.
- Employers offering jobs to migrant workers where an occupation is on the "Oversupply" list will not get Skill Match reports issued by Work & Income. Solid evidence of genuine attempts to find a local to fill the job will be critical for approval.
Skilled Migrant Changes
The government added four new occupations that are now regarded as skilled employment and may qualify for job offer points under the Skilled Migrant Category. These are:
Aged or disabled carer, Bicycle mechanic, Driller and Nursing Support worker.
Work Visa Rules
From 27 July 2020
- Essential Skills work visa applications are now assessed based on the current median wage (NZD $25.50 or more per hour.).
- Job offers paying below the median wage require employers to pass the labour market test* and secure a Skills Match Reports from WINZ (work visas granted for a maximum of 6 months).
Skilled Migrant Changes
Anyone invited by Immigration NZ to apply for residence under the Skilled Migrant Category where their invitation is dated between 1 November 2019 and 15 April 2020 (inclusive) has now been granted an additional six months to lodge their residence application.
Work Visa Rules
From 27 May 2020
- Regional Skill Shortage List goes live. 15 regions around New Zealand list occupations reflecting local skill shortages in each region. The labour market test is not mandatory provided the job offer matches the occupation and region plus the visa applicant has qualifications and/or work experience set out on the list.
Skilled Migrant Changes
The government has deferred the fortnightly selection of Expressions of Interest from the Skilled Migrant pool. This means Invitations to Apply for Residence are also suspended. Malcolm Pacific Immigration does not anticipate selections to resume until after the general election held on 17 October 2020.
Skilled Migrant Changes
Immigration NZ is now prioritising Skilled Migrant Residence applications where the main (principal) applicant meets the criteria:
- Has employment paying double the median wage which is currently NZD $51 per hour OR NZD $106,800 per annum; OR Has New Zealand occupational registration and is required to hold valid registration to lawfully carry out their job.
Work Visa Rules
From 24 February 2020
- Wage or salary thresholds increase for Essential Skills Work Visas applications lodged on or after 24/02/2020 (labour market tested; read more here).
- Higher Skilled employment increases to $38.25 or more per hour ($79,560 per annum*)
- Mid Skilled Employment increases to $21.68 or more per hour ($45,094 per annum*)
Work Visa Rules
From 7 October 2019
- Base salary to qualify for a Work to Residence Visa (WTR) supported by an accredited employer increases from $55,000 per annum to $79,560 per annum (or $38.25 per hour).
- Pay rates for WTR visas are now reviewed annually.
- Work visa applicants paid less than $79,560 per annum by accredited employers need to apply under other work visa categories.
Skilled Migrant Changes
The government recently added more occupations that are now to be regarded as skilled employment and may qualify for job offer points under the Skilled Migrant Category. In order to qualify for points, the job must be paying at least the current median wage (or higher for certain occupations) at the time the residence application is lodged.
Work Visa Rules
From 1 November 2021
- Work to Residence Visa (Accredited Employer and Long Term Skill Shortage) applications close.
- Applications lodged on or before 31 October 2021 will be processed under current visa settings.
Mandatory Vaccination Required for Travel
From 1 November 2021 anyone who is not a NZ citizen must be fully vaccinated (unless exempt) before travelling to New Zealand. Fully vaccinated means your last dose of vaccine was given at least 14 days before travelling and it was an approved vaccine.
Employer Accreditation
Applications for employer accreditation closed at the end of June 2021. Applications lodged before the closure date are still being processed. New applications for accreditation open on 9 May 2022. The process will be quite different to what employers have experienced in the past. Businesses will need to meet minimum standards.
2021 Resident Visa
Wednesday, 1 December is fast approaching and it is estimated that around 16,000 individuals and families can apply in the first wave for the 2021 Resident Visa opening next month. It is exciting for the thousands of people who have been waiting patiently to become residents that finally the finish line is in sight.
2021 Resident Visa
The first wave of applicants can apply from 1 December 2021. Around 16,000 applications are expected in this first wave. The second wave opens on 1 March 2022. In total, the government expects approximately 110,000 applications that will include about 165,000 people.
2021 Resident Visa
The second group of workers who can apply online for the 2021 Resident Visa that opens on 1 March 2022 are those who hold an eligible work visa and either meet "Settled", "Skilled" or "Scarce" as set out above. In total Immigration NZ estimate around 110,000 people will qualify to apply for this visa.
2021 Resident Visa
The first group of workers who can apply online for the 2021 Resident Visa that opens on 1 December 2021 are those that on 29/09/2021:
- Had lodged a residence application under the Skilled Migrant Category (SMC) or Residence from Work category; OR Had lodged an SMC Expression of Interest (EOI) in the SMC pool that included at least one dependent child aged 17 or above.
2021 Resident Visa
Is this the only requirement to qualify for residence? No. In addition to the eligible work visa criteria workers also need to be regarded as one of the following:
- Settled.
- Skilled.
- Scarce.
2021 Resident Visa
People who were lawfully in NZ (or in Australia when the travel bubble closed between April and July 2021) on 29/09/2021 need to meet the visa eligibility criteria:
- Workers in NZ who held an eligible work visa on or before 29/9/2021 and on the day they apply for residence; OR Applied for an eligible work visa on or before 29/9/2021 and the work visa application is subsequently approved and still hold an eligible work visa on the day they apply for residence.
2021 Resident Visa
The government has introduced a limited pathway to residence for people who are already living and working in New Zealand. Applications open on 1 December 2021 for the first wave of people eligible to apply. The second wave opens on 1 March 2022. The deadline to apply for the 2021 Resident Visa is 31 July 2022.
Critical Purpose Visitor Visas
A small number of critical health workers (taking up jobs for six months or longer) or specialist workers (taking up jobs that are for longer than six months) who were granted border exemptions may also have eligibility for the 2021 Resident Visa. They will need to have arrived in NZ and lodge a 2021 Resident Visa application.
Policy Decision Key Dates in 2022
- July 4. Applications open for the new Accredited Employer Work Visa.
- July 31. Applications for the 2021 Resident Visa close.
- August. Skilled Migrant Residence category scheduled to reopen.
- August. A new pathway to residence for people earning 200% or more of the median wage.
*Excludes high-risk countries.
Policy Decision Key Dates in 2022
- February 13. Fully vaccinated Kiwis plus certain other travellers entering NZ from the rest of the world* can skip MIQ.
- April 30. The border starts a phased reopen to fully vaccinated foreign nationals.
- April 30. The Productivity Commission reports back to the government on immigration settings.
- May 9. Applications open for mandatory Employer Accreditation.
*Excludes high-risk countries.
Work Visa Categories Closing
The work visa categories set to close are:
- Essential Skills Work Visa
- Essential Skills Work Visa – approval in principle
- Work to Residence (Talent – Accredited Employer)
- Work to Residence (Long Term Skills Shortage)
- Silver Fern Job Search Work Visa (closed October 2019)
- Silver Fern Practical Experience Work Visa.
The Green List
In order to address labour shortages in New Zealand's crucial industries the NZ government has implemented a "Green List" of sought-after high-skill occupations. This list offers a prioritised pathway to residency.
There are qualification and/or occupational registration requirements to meet. Occupations are broken down into two tiers:
- Tier 1 - direct pathway to residence
- Tier 2 - requires a period of two years or longer before applying
The recent additions in May 2023 across many sectors can be found here