Sharon Davies, Managing Director at Talent Propeller
According to experts, the scope of a review into the Accredited Employer Work Visa (AEWV) needs to be widened, with up to 99 percent of SMEs in critical industries unable to access the programme and New Zealand's food supply chain, manufacturing and retail sectors under threat.
The Public Service Commission is set to lead an investigation into the Ministry of Immigration's administration of the AEWV, focusing on 'with a focus on mitigating the risk of migrant exploitation and irregular migration'.
Sharon Davies, managing director of recruitment marketing agency Talent Propeller, said supply chains in some sectors are unnecessarily compromised as small and medium-sized employers need help accessing the AEWV scheme.
Davies continued that the review's focus on migrant exploitation was too narrow and needed to be widened to address the issues faced by thousands of SMEs legitimately trying to employ workers struggling to find staff.
Davies was particularly critical of the inefficiency of the current model and said there were thousands of qualified post-study, spousal and other visa holders already in New Zealand who could be employed immediately if these barriers were removed.
"The first stage in the AEWV process for an employer is a fee payable to the Ministry of Immigration just to verify your company information. This stage can take some firms up to two years," said Davies.
Once verified, individuals can pay another fee and move to the next step, where they identify someone they want to hire. Then, they must demonstrate that employers have advertised throughout New Zealand for six weeks. The total cost to get to this point equates to around NZ$ 5,000.
What happens a lot of the time at this point is the ministry can turn around and say, 'you could have hired a New Zealander for this role, go back to the market, find one and spend 12 months training them for the job'.
"What happens a lot of the time at this point is the ministry can turn around and say, 'you could have hired a New Zealander for this role, go back to the market, find one and spend 12 months training them for the job'."
Across the companies Davies works with, she doesn't know anyone who would prefer to go through the application process and sponsor a migrant to work as a first option. It was always a last resort, but with unemployment at just 3.6 percent, they need help finding a local willing to do the work.
"At the same time, we often have a qualified person already in the country who might be on a post-study visa but can't be matched with an employer wanting to expand."
For these business owners, the accreditation process has deteriorated into a Kafkaesque bureaucracy, where the system has implemented a series of nonsensical institutional roadblocks, has no vested interest in achieving anything but keeping itself going, and effectively alienates most SMEs in the process.
Davies cited the findings of a recent air conditioning industry conference where only three of the most prominent players have managed to get accreditation.
She said there are around 150 air conditioning companies in the country, meaning less than one percent of this industry can hire new staff.
The air conditioning (A/C) maintenance sector provides critical services in New Zealand's supply chain, from repairing refrigerated trucks to installing office A/C units.
In this example, barriers to accessing the AEWV have created a playing field favouring more giant multinationals at the expense of locally owned SMEs.
Davies stated there were approximately 546,000 small businesses in New Zealand, representing 97 percent of all firms. These account for 29.3 percent of employment and contribute over a quarter of New Zealand's gross domestic product (GDP).
"I have another client in the food manufacturing industry producing machinery for the dairy sector that can't grow their exports and another client who has cancelled their retail expansion plans due to a lack of staff."
The skills shortage has seen staff on $75,000 three years ago now able to command a $150,000 average salary. However, this does not necessarily translate into productivity increases, and growth remains heavily constrained.
"When a lack of chilled transport infrastructure prevents a farmer from shipping his produce from one end of the country to another, the outcome will be a reduced supply and increased food prices for consumers."
The industry has petitioned to be added to the skills shortages list to get people in faster. However, the application process takes six months, with the long-term planning process adding another barrier for businesses.
Against an economic backdrop of recession, rising food inflation and skilled labour shortages, there is no logical place for an idealistic process to hamstring most companies wanting to hire people.
Davies said that the lack of access to skilled labour has led to an unsustainable increase in 'quiet hiring', where an organisation leverages current employees' capabilities to acquire new skills without recruiting new full-time staff.
She added that small business owners must also fill in for employees.
Davies has noticed the quiet hiring phenomenon manifest in many Kiwi companies. In a scenario where a person leaves, and no replacement is available, their role is split across the rest of the team.
These staff become overworked and eventually leave, making it even harder to fill the skills shortages in that firm.
"It is a ridiculous situation, and we need critical changes to the immigration accreditation process to allow struggling SMEs access to these visa holders already in the country."
Davies concluded that New Zealand would face a significant crisis if there weren't a more immediate and efficient solution to hire talent internationally.
