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Posts with tag: New Zealand skills shortage

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Kia kaha

Posted by Iain on Feb. 14, 2020, 4:22 p.m. in Skilled Migrant Category

Kia kaha.

In Maori this means "stay strong”. It is one of those terms that has found its way into every day usage in New Zealand. I love it. It speaks to where I come from and the work that I do. People everywhere are freaking out over the skilled migrant resident visa allocation and processing times, frightened by what the government might do.

At my seminars I like to paint a picture that migration is like climbing Mount Everest. It takes a lot of good planning, careful execution, patience and courage. Mental toughness is rewarded. Migration is emotional, logistically complicated and generally expensive (as in, employ a cheap mountain guide, or no mountain guide at all and your chances of summiting Mount Everest are significantly lower — indeed that decision to do it on the cheap may cost you your future).

Migrants are always tested but never more so than today in New Zealand where allocation and processing times continue to get longer and longer. I have written recently something has to give in terms of what is going on with the skilled migrant category. Foolishly the government cut the number of resident visas they wanted to approve last year but left the points pass mark at 160.

Demand is not diminishing, nor increasing (as incorrectly claimed by the Minister of Immigration recently), but by cutting numbers while keeping the pass mark the same, has led directly to these processing backlogs - most skilled migrants are going to be waiting 18 to 24 months for their residence to be allocated, processed and approved unless they work in an occupation for which they have NZ registration or are earning at least $104,000.

Backlogs in and of themselves don’t necessarily suppress demand. Having dealt with the Australian system for some years the significant majority of resident Visa applications take 18 to 24 months to process. The big difference between Australia and New Zealand however, is none of those people wanting to move to Australia have sold their houses, given up their jobs, given the dog away to their neighbour, found employment in Australia and are now sitting waiting and worrying over their Resident Visa outcome. They are all still sitting at home getting on with their lives. All the people affected by the backlog in New Zealand, are in New Zealand on work visas. They have burned plenty of bridges to be part of the Government’s residence programme (that curiously they still spend millions of dollars marketing).

These NZ migrants cannot make any long-term decisions. Many have children finishing school and wanting to go to university during the waiting period and the majority simply cannot afford to pay international fees for university. Many are having to put on hold decisions to buy houses. Some might be stuck in jobs that are not ideal but serve the residence purpose.

I find we have two kinds of clients. Those that simply suck it up, and get on and enjoy life in New Zealand having faith we know what we are doing and residence is a matter of when and not if. They appreciate the delays are not of our making. As possibly the best Advisers in the game they appreciate that all we can do is to ensure that we file decision ready applications which is what we do.

Then there is the second kind. These are the people that take it out on us. Thankfully they are a minority but it isn’t very pleasant being blamed for changes in the rules half way through the game - when we don’t write the rules. There's nothing we can do to make the government go faster but we along with the entire industry has made it very clear to the government that the current situation is unsustainable and ignoring the problem will not make it go away.

Ultimately however it is the Minister that sets the pass mark to get out of the skilled migrant pool and it is the government that sets the criteria to qualify as a migrant. As I have written about recently I have no doubt some plan is being hatched in Wellington to deal with the situation. My major concern is the solution might be politically expedient rather than economically sensible.

Every single skilled migrant requires a highly skilled job to get into New Zealand. Employers the world over prefer to employ locally simply because of the perceived or real hassle getting visas. That means the government has in that backlog people who have been able to break into the labour market, secure a job for the most part against the odds, and that says one thing and one thing very clearly - their skills were desperately needed in New Zealand by that particular employer because no employer I’ve ever dealt with will play the visa game if they can avoid it. That reality seems lost on the politicians - or they choose to ignore it for political gain.

Obviously the simplest solution is for the government to increase the number of resident visas they will issue and clear the backlog. Sell it as a good economic news story, for that is what it is. Too many jobs, not enough Kiwis to fill them.

I was thinking the other day that another solution could be to return to the multi passmark system we used to have. The way things used to work was that applicants were ranked not just on raw points total as they are today, but according to what we deem more important and valuable e.g. claiming points for a job in an occupation on a national or regional skills shortage list, or having a partner with a skilled job offer, or higher salary - the criteria themselves could be ranked. Then, at least, it is transparent.

Or consider prioritising processing in terms of the points score that people claim. The more points you claim the faster your case could be allocated. The obvious problem with that of course is people would start claiming points they are not entitled to. I would then adopt the Australian approach – a bit of a scorched Earth - if you claim it and you can't prove it you’d be declined. That would force people into getting it right up front and first time but the flip-side of that is it would require immigration officers to understand their own rules completely — and we know how bad they are at that. It is however worth considering. It would certainly force migrants to make sure they have the evidence of their points claim before filing an Expression of Interest in residence. That alone should cut down on applications that are always doomed to fail under the current system.

A simple across-the-board increase in the pass mark would obviously decrease demand for the available places but equally it's going to deprive the labour market, particularly in Auckland, of skills desperately needed that we do not produce ourselves as a country.

And that makes the simplest solution, the best. Recognise that the skilled migrant category rewards those that are able to break into a labour market that is, owing to the disconnect between employers wanting people to have work visas, but the government not wanting to grant work visas without jobs, seldom easy. The annual target of resident visas allowed to be issued should simply be increased — at least while the Government comes up with a better idea that does not hurt the economy. The government backtracked on infrastructure spending recently, perhaps they should backtrack on cutting skilled migrant numbers as well - and take the heat they will rightly get for making silly, politically motivated decisions in the first place.

If they were to do that and the economy keeps growing, then of course it creates more jobs. So arguably the problem never goes away. It’s a valid point (unless and until we can create the skills we need locally). The government should recognise that with that would come an increased demand on infrastructure, schools, roads, housing and everything else that would come with a growing population.

Well, here’s a thought — how about a population policy?

What this situation shows is it is a complex issue and you can't solve the problem unless you have an idea about how many people we want to share this land with and that demands a population policy which New Zealand has never had.

And no New Zealand government wants to have a discussion about what our ideal population might be.

So we find ourselves in a situation where the government sits on its hands when it comes to this critical issue and I continue to fear they will do something really really dumb.

Some positive news to end, however. Visitor Visas now seem to be being issued once again and we have had at least one issued this week for a South African client that was filed in mid-January. 

That's a real relief for us and our clients looking to come over and find jobs.

Remember, migration is stressful and our jobs at IMMagine exist because the process is legally complex, logistically challenging and emotionally very tough. Don't start the process if you're not up for it because there's no point getting halfway up that mountain and turning around and going back down again.  And migration is as much political for any country as it is economic so you will always be at the whim of self-serving politicians (or well-meaning but simply stupid ones) until that precious resident Visa is in your passport.

For migrants to be one of Darwin’s ‘winners’ it takes the creation of a good strategy (usually incorporating a Plan B), a steady nerve and listening to the advice that you are paying for. In our case it's normally spot on and we continue to enjoy watching over 98% of our clients come to New Zealand and find skilled jobs and go on to secure their residency.

Even if now, it is going to be a two year process.

Kia kaha. 

Until next week

Iain MacLeod

Southern Man

Labour Shortages Vs Skills Shortages

Posted by Iain on June 17, 2016, 3:44 p.m. in Jobs in New Zealand

There have been some very interesting employment vacancy figures released this week that further illustrate the relative strength of the labour market in New Zealand.

According to the Ministry of Business, Innovation and Employment for May 2016:

  • Online vacancies increased by 2.4 per cent over all during the month.
  • Vacancies increased in all industry groups. The main contributors were hospitality and tourism (up 1.9 per cent) and education and training (up 1.7 per cent).
  • Vacancies increased in all occupation groups. The largest increases were for machinery drivers and operators (up 3.6 per cent), labourers (up 3.4 per cent), and technicians and trades (up 3.1 per cent).
  • Vacancies increased in all ten regions. The Bay of Plenty region saw the strongest growth (up 3.0 per cent). This on top of news that tourism has led to the country earning more money than it is spending, i.e. a trade surplus. That explains the ongoing growth in tourism and hospitality related jobs being created.

What is interesting from an immigration perspective is the disconnect between New Zealand’s labour market needs/labour shortages and ‘skilled’ migrant criteria for residence.

Simply having a job and filling a hole in the labour market is no guaranteed pathway to long term residence.

We are, for example, seriously short of Heavy Truck Drivers and it is possible to get a work visa to be one but not possible to qualify for residence under the skilled migrant ‘points system’ because Truck Drivers are not deemed to be skilled (yet ‘Dog Groomers’, inexplicably, are).

The dairy industry in Southland would collapse if it weren’t for hundreds of Filipino farm workers propping up the farms; yet they also do not qualify for residence because the (critical?) roles they fill are not skilled, despite paying taxes, being hard working and having long-term employment prospects. What they are filling are ‘labour’ shortages. No connection between that and a resident visa.

New Zealand has all sorts of low or semi-skilled occupational shortages and the roles are mostly filled by international students, many of whom have limited work rights of up to 20 hours per week and fulltime during academic holiday time, or are one of the tens of thousands of young Holiday Working Visa holders.

There are some policy (and political) tensions arising in relation to this.

On the one hand you cannot blame the transport companies, café owners, farmers or fruit growers for giving these jobs to ‘foreigners’ when there are no locals available or willing to do the work, but where are the locals?

We have in New Zealand an unemployment rate of 5.3%. As I explain at my seminars these people are largely young, unskilled or low skilled. I suspect also unmotivated.

The obvious question to ask is why are they not filling these roles?

It is a relatively complex situation but in my view the single largest contributor is an unwillingness to tell the unemployed who have low skills to get off their backsides and travel to areas where this work exists. It may not be close to home or family but the alternative is we, as tax payers, fund this choice so many are making.

There is little to no reason (beyond politics) for not giving these - particularly young and healthy people - a choice. Go where the work is or the tax payer will stop depositing an unemployment cheque in your bank account every week.

Too often we hear the whining of these people about the costs of going to some other part of the country for ‘low wages’.

Well, if it is okay for all those young Germans, Spanish, British, Singaporean, Malaysian, Brazilians and tens of thousands of other youngsters to do these jobs while travelling around the country, why do we expect any less of our own?

My own youngest son is now studying at the University of Otago in Dunedin. He trained as a Barista and worked all through last summer north of Auckland in a café to garner experience to bolster his employability once he got down to the South Island. He cannot find a job yet the cafes are full of Holiday Working Visa holders doing jobs he could be doing to support himself (and save me from footing the bill).

New Zealanders are starting to ask the question – should tens of thousands of young foreigners get these jobs ahead of young New Zealanders if the New Zealanders want them? Should Holiday Working Visa policy be a substitute for forcing the young and unemployed of New Zealand to get off their backsides and take up these jobs?

Given we require all those applying for ‘typical’ work visas on their pathway to a resident visa to prove they are not taking a job away from a New Zealander, are Holiday Working Visas a convenient excuse for employers locally to not be bothered trying to fill the vacancies with our own young job seekers?

I am all for young people coming into the country and having that local working experience while they travel around enjoying everything this wonderful country has to offer. We are all enriched by it culturally, if not economically, and these young people build bridges to the rest of the world. Some will use the Holiday Working Visa as a stepping stone to filling skilled roles and go on to secure residence. I often help skilled migrants return to New Zealand ten or more years after they spent a happy year on one of those Holiday Working Visas and we would never have been able to get the benefit of their skills had they not enjoyed their earlier trip.

I have some concerns however that successive Governments have lacked the political will to start forcing the more indolent among the local population to take up these jobs first.

Our own should be forced into these jobs or offered them before we offer them to foreigners. If they don’t want them don’t apply or lack the attitude and willingness to learn then by all means offer them to the travelling hordes of youngsters from overseas.

By not doing this, current policy opens the door to the politics of migrant bashing and we are not immune from a (tiny) minority of politicians who will exploit it. With an election next year those voices will get louder sure as the sun will rise on the morrow.

As I wrote last week immigration policy settings are under increasing pressure and the question has to be asked if it is delivering in the overall context of New Zealand’s social, cultural and economic developmental aims.

There is, at the very least, room for improvement.

Until next week...

Iain MacLeod, Southern Man

Skilled Migrant Time Bomb

Posted by Iain on June 11, 2016, 12:10 a.m. in Immigration

As a little boy I had an intense interest in politics.

My favourite Uncle who had himself run for Parliament was, I suspect, partly responsible for that interest and we had many a conversation where he pitted his mid-40 year old conservative wisdom with my ten year old love for communism.

I will never forget a piece of advice he gave me if I ever ran for elected office. "Remember Iain, there are two Governments. The elected Government and the permanent Government." Permanent Government being the bureaucracy.

I never imagined that I'd end up by making my living helping people to fight their way past this permanent Government. And observing up close the relationship between them and the elected Government.

To some extent he was quite right but in other respects he was wrong.

Right now a potential crisis is unfolding in New Zealand's Skilled Migrant Programme and the (elected) Government is refusing to listen to the permanent one.

Within two years this crisis is going to hit the Government hard, yet they refuse to acknowledge they have a looming issue despite the obvious staring them in the face in the form of research carried out by the immigration bureaucrats. To that you can now add Treasury.

I have read a number of papers released under the Official Information Act which clearly demonstrate that there is real concern within the bureaucracy that Government policies in the area of export education is dumbing down the skilled migrant category. This is because there is a massive marketing machine (both public and private sector) encouraging international students to invest tens of thousands of dollars in low level, low grade New Zealand qualifications because they have the promise of a work visa at the end and a pathway (in theory) to a Skilled Migrant Resident Visa.

There are several big problems with this.

The sorts of jobs many of these students are likely to get once they complete their very expensive qualifications are not skilled because they tend to be entry level, do not attract points toward residence and they have not been warned by either the Government, the tertiary Instructions peddling these products or their agents (unlicensed) representing them in markets such as India. They will only find out once they have completed these very expensive local courses and I suspect they will leave New Zealand justifiably bitter at having been sold a lemon.

Those that succeed are, most of the time, getting marginally skilled jobs of questionable value to New Zealand. The two occupations that top the list for the number of skilled migration approvals today are Retail Managers and Chefs. In both these areas the risk of fraudulent job offers grows and an entire industry where big money will change hands as desperate foreign graduates realise their predicament try and buy jobs will emerge. Anecdotally it already has.

There are literally tens of thousands of such students in New Zealand today. I understand more than 40,000 in Auckland alone.

Immigration statistics show that these students are consuming an ever greater percentage of the finite and capped skilled migrant places available each year.

What's the problem with that you might ask (I understand senior Ministers are asking the same thing)?

Right now policy settings demand the significant majority of skilled migrants possess skilled job offers.

Each year there are 27,000 resident visas (with a 10% variance) available to Principal Applicants, their partners and children. That translates into around 10,000 Principal Applicants and 10,000 skilled jobs up for grabs.

Right now if you have a skilled job you will be approved residence all other things being equal.

So what happens in two years when we might have 20,000 Expressions of Interest for people with job offers sitting in the pool? Right now they are all selectedl. 

Which ones do we  grant residence to? Right now it has to be all of them.

If we decide to only select half (so we don't double migrant numbers from current levels) should it be those that have got jobs as Retail Managers, the Chefs and the Secretaries or the experienced Engineers, IT workers, Trades people that New Zealand is so desperate for?

Right now there is no distinction - 100 points equal selection irresepctive of the job offered.

What about all those with false job offers?

The Government could turn around and double the annual intake and issue twice as many visas.

The Prime Minister said this week (as he always does) that current migrant numbers are about right. That suggests no appetite for doubling the numbers.

Auckland has a housing crisis. Too many people arriving and not enough houses being built. Much of this is being blamed on foreigners even though the cause is largely more New Zealanders staying put in NZ and more New Zealanders coming home, particularly from Australia. This has become a real political problem and there are politicians calling for a cut in migrant numbers (there are those that never let a few facts get in the way of a few votes).

This volume will be dialled up next year during the election cycle.

So Prime Minister, what is your plan when in two years the demand for the current number of places doubles or triples and many of those applying are Retail Managers and Chefs rather than Engineers and Builders and Software Developers with ten years of practical experience?

How do you choose between them all when you only have 27,000 places up for grabs?

Senior immigration industry leaders, including me, have been warning that changes have to be made now especially to what is being offered to international students. Export education is worth as much to NZ as an export each year as IT is in terms of exports at close to $3 billion a year. Clearly it is worth preserving and developing but not at the cost of either New Zealand's reputation or if it starts excluding better quality skilled migrants.

I have no issue with offering students a study to work to residence pathway but we need them to be studying the occupations we are critically short of in Engineering, IT and potentially, Trades.

Equally the question has to be answered which migrant adds more value to New Zealand; the 23 year old with a one year Diploma in Business who gets a job as the Manager of a Retail Outlet or the 35 year old Quantity Surveyor with ten years of industry experience?

When places are rationed the Government has to decide.

If that means we incentivise international students to study what New Zealand employers really need rather than what turns into a quick short term buck for NZ then for me there is no contest. The market will respond by offering students who want residence a course that offers the greatest chance of securing that outcome by offering such courses. Everyone wins.

It is a potential time bomb. When the Government has been warned it will explode within the next two years you'd you think they might sit up and listen to those of us who are right there looking at it and providing the evidence that it is real.

While in my experience of politicians and bureaucrats the bureaucrats often do get their own way there is scant evidence the current crop are.

It does not bode well for the Skilled Migrant Category.

Until next week

Iain MacLeod

Southern Man Letter from New Zealand

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