The Labour Shortage in New Zealand
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So Why Is New Zealand Struggling With a Labour Shortage?
Some of the prominent reasons for labour shortages in New Zealand are:
The COVID Effect
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.
The workforce in New Zealand prior to 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 citizens are enjoying a high rate of employment. However, we are in desperate need of more people from overseas to fill vacancies. Immigration NZ introduced a NZ Green List to prioritise some specific skilled labour roles. However, this is not a quick road to recovery for our Kiwi companies.
Skill Mismatch
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 long-term rather than an immediate fix.
Reduction of the Qualified Skilled Workers
Due to border closures, New Zealanders are now finally able to take steps to move overseas themselves. It has always been important for Kiwis to travel and experience overseas work opportunities due to the nature of our location in the world. However, for our employers, this is another issue compounding labour shortages.
With skilled jobs, proper training and education are vital to the supply of labour across different industries across New Zealand. However, the number of apprenticeships has also been falling, and graduates in engineering and healthcare are too few to meet the demands.
With New Zealand's aging population, we are heading for a high retirement rate within the next decade, which will also impact the availability of skilled workers. Highly skilled degrees take time to nurture. Therefore a longer-term strategy is needed to educate New Zealanders and, at the same time, increase immigration to counteract this drop in the workforce to meet demand.
General practitioners, for example, are estimated to see their workforce reduced by fifty per cent in the next ten years due to retirement. The lack of new graduates in this area will push New Zealand to look to international shores to fulfil their health care needs.
Winning Strategies for Attracting Qualified Migrants Workers
If you hire migrant workers as an accredited employer, there are ways to retain your local team and attract international candidates on a skilled migrant workers visa. Some are:
Focus on a Positive Company Culture
By taking care of your workforce, you boost your ability to attract new workers. The migrant workers will be more inclined to take a chance on a relocation if they can see you care for your workforce, their physical and mental health, their work/life balance, and their families.
After COVID with the implementation of the hybrid work model, migrant workers are also looking to the New Zealand job market to equal those, so do your research if you are struggling to attract applicants.
Focus on Worker Retention
Worker retention can stem the flow of labour shortages and can be addressed by improving the company culture. However, keeping employees loyal and working for you may mean increasing salaries to meet the rising cost of living and providing clear career paths for your workers.
If your competitors pay higher salaries and have higher standards of care or work/life balance, your workers will look to you to match these. Training programmes, career progression, and education are also key elements for retention.
Skill Development Programs
As the labour shortage continues, to grow as a business, you may consider investing in your current employees and hiring migrant workers.
As employers, you can upskill your workforce to meet your labour gap by:
- Developing and rolling out internal training programs for current workers to fill the gap you are missing and staff may benefit from career development.
- Hiring skilled overseas contractors who can coach your team and help to implement the work you need.
- Become an accredited employer and employ migrants who will work alongside your current workforce to lead the upgrade of skills.
The Change to Securing Foreign Workers
Immigration New Zealand implemented the Accredited Employer policy mid-way through 2022 to ensure employers responsibly hire and support migrant workers and their local ones.
The new rules for employers require that migrant workers are offered advice and education from their employers to help them transition into working and living in New Zealand and are provided with financial stability for themselves once they are here.
Green List Opportunities in New Zealand
According to the Accredited Employer Work Visa (AEWV) policy, the Ministry of Business, Innovation, and Employment (MBIE) are targeting key skills shortages within New Zealand. MBIE has formulated a Green List of occupations for immigrants. Depending on their skill set, migrants will be eligible for either a direct path to residency visa or required to work for two years before they can qualify for residency (work to residence visa)
There are mainly two tiers of jobs on the Green List.
Tier 1: Directly provides migrants with a resident visa. If they satisfy all the requirements in any job included in tier 1, they are allowed to reach New Zealand on a work visa and then apply directly for residency from the 5th of September, 2022.
Some of the jobs included in tier 1 of the Green List are:
- Engineering jobs include chemical engineer, civil engineer, material engineer, electrical engineer, industrial engineer, mechanical engineer, etc.
- Health and social services-related jobs include general practitioner, anesthetic, special physician, cardiothoracic surgeon, neurosurgeon, vascular surgeon, psychiatrist, orthopedic surgeon, urologist, dermatologist, etc.
- Some ICT, telecommunications, and electronic-related occupations.
Tier 2: If they meet all the conditions needed for any job in tier 2, migrants are allowed to enter New Zealand on an Accredited Employer Work Visa. They can then submit their application for residence after working for 2 years with the Accredited Employer Work Visa in New Zealand from September 2023.
Tier 2 jobs comprise:
- Jobs related to health and social care like an anesthetic technician, medical laboratory technician, occupational therapist, nurses etc
- Trade jobs include automotive electrician, general electrician, diesel motor mechanic, etc.
- Agricultural occupations include dairy farm managers, herd managers, and assistant dairy farm managers.
If you are looking for how to apply for the green list visa read our article for further advice
Plan for the Future to Avoid the Labour Shortage
We can only hope the pandemic was a once-in-a-lifetime event. However, it shines a light on the necessity for businesses to plan for the future needs of their workforce and look beyond the status quo to keep and upskill the current workforce.
Successful businesses that take care of their employees, plan for change and implement strategies to improve their workforce in the long term can proactively protect themselves against the major effects of future labour shortages.
A Few Takeaways
The Labour shortage is affecting countries all over the world due to the effect of a global pandemic. With its prior policy of isolation, New Zealand needs to address the shortfall of labour effectively to ensure it can recover from a lack of immigration and before the retirement rate increases in the next ten years.
That’s where hiring skilled migrants and integrating them into your business can support your growth. At Malcolm Pacific Immigration, we can help employers and their migrant workers with any information about the immigration process and how to become an Accredited Employer.
Get started with a FREE consultation today
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 team is on standby, ready to help.
Get started with a FREE consultation today
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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Latest Updates
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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