Ready, set, go! Employers brace for the Kiwi worker exodus as borders reopen

The construction and infrastructure sectors warn that projects like Auckland's City Rail Link could face major delays and cost increases due to shortages of skilled workers. Photo / Michael Craig

With New Zealand's borders reopening tentatively from today, employers and businesses are bracing themselves for the inevitable rush to the airport, warning that an already critical shortage of skilled workers will have long-term effects on the economy.

They say New Zealand needs to act swiftly and collectively to fill already vacant positions and attract new skilled workers to the country in what is shaping up to be a cut-throat global race for talent.

International recruiters and employers have already been shoulder-tapping skilled workers but many Kiwis have been reluctant to leave in a Covid-ravaged world and while the New Zealand borders were so restrictive.

With that constraint gone, employers are expecting staff with Covid-inspired itchy feet to head off in droves on their delayed OE. Those in industries like construction, healthcare and technology/digital say there is a danger that the shrinking pool of skilled workers left behind will be spread too thinly if those resulting vacancies can't be filled.

In the construction industry, employers warn about an inability to complete, or even start, major infrastructure and construction projects in both the public and private sectors; rising costs caused by delays; poor workmanship; and a resulting lack of growth and innovation in the industry.

They warn the Government's five-step border reopening plan, which runs through until October, could be too little too late.

Rick Herd, CEO of commercial construction company Naylor Love, said if New Zealand – and that includes the Government – doesn't get this right the economy and the country's progress would suffer.

There were shortages in every sector of his industry, he said, from workers pouring concrete to professional staff including designers, consultants, managers and CEOs, even staff in the consents departments in councils.

The Government's insistence that industries train up workers from New Zealand's unemployed pool, rather than importing immigrants, was not a solution, he said. Many of New Zealand's unemployed were unemployable.

Rick Herd, CEO of construction company Naylor Love, says skilled-worker shortages across the industry are expected to worsen now that the borders are reopening. Photo / Michael Craig

"The bureaucrats and immigration think we can train people locally. We can but we just can't train them fast enough. Even the training organisations are short of trainers.

"And let's face it, a lot of Kiwis don't want to be painters, they don't want to be carpenters or tile layers. So the best we can do is bring them in from overseas as a short-term solution. The Government doesn't seem to get that."

Ryman Healthcare has a team of recruiters working constantly to keep up its workforce of 6500 staff across New Zealand and Australia, which included village managers, designers and architects, IT specialists, builders, quantity surveyors and, particularly, nurses.

The Aged Care Association estimates the sector is short of at least 1000 nurses in New Zealand at a time when the Omicron outbreak is putting added pressure on nursing homes and retirement villages.

A spokesman for Ryman said the company was in expansion mode and was currently building 15 new villages which needed new teams to run them. Skilled construction workers had been in short supply for some time, he said.

One of Ryman Healthcare's current building projects, a retirement village in Hobsonville. Photo / Supplied

The Government's five-step plan means from today fully vaccinated Kiwis will be allowed in from Australia. From mid-March (step 2) vaccinated New Zealanders from anywhere in the world will be allowed home, and other eligible travellers. Vaccinated skilled workers earning at least 1.5 times the median wage for roles longer than six months, and travellers on a working holiday scheme, will also be allowed in.

Step 3 from April 13 will allow in vaccinated people from anywhere in the world including current temporary and student visa holders who still have a valid visa, and up to 5000 international students for semester two.

In July (step 4) vaccinated people from Australia and countries that do not need a visa or visitors who already hold a valid visitor visa, and travellers arriving under the Accredited Employers Work Visa categories, will be allowed in.

In October (step 5) all visa categories will reopen including visitors and student visa holders. There is no mention of vaccination or isolation requirements on the Immigration New Zealand website.

Helen Davidson, chief executive of the Association of Consulting and Engineering (ACE) said members were pleased to see the five-step plan introduced and in particular allowing skilled labour to come in from March.

"But it's not the silver bullet."

Employers in various industries have complained long and loudly that the Government's salary threshold for skilled workers, set at around $107,000 a year, was too high.

That threshold will be moved to a bright-line test of 1.5 times the median salary, working out to about $84,000, in March. That was a welcome move, Davidson said.

"But there will be key roles that are critical that fall below that $84,000."

ACE, which represents more than 13,000 staff across 238 member firms, surveyed members last year on the subject of worker shortages. At that stage 135 firms in the construction and infrastructure sector reported more than 3000 vacancies, with 800 of those in engineering alone.

In a normal year firms would recruit 20 per cent of their new hires from the international market, Davidson said.

Helen Davidson, chief executive of the Association of Consulting and Engineering, says skilled staff are approaching exhaustion as they try to fill gaps caused by the labour shortage. Photo / Supplied

"So with the border closures our people have really been struggling. It's been hard and they're exhausted."

New Zealand recruitment agency HainesAttract's most recent survey of 500 skilled workers in the construction, healthcare and technology sectors showed that 41 per cent were considering leaving the country within the next few months, a noticeable increase from a similar survey done in 2021.

Cost of living, pay, job opportunities and lack of overseas experience were among the motivations to leave New Zealand.

HainesAttract's CEO Hamish Price said the world was short of skills and overseas employers were looking at New Zealand to solve their shortages.

"The risk is we have more Kiwis heading out and far fewer new ones heading in unless we're actively in the race for skills. If New Zealand doesn't act quickly and attract and retain talent, the skill shortage will exacerbate immensely."

Competition was increasing between countries with 33 per cent of those surveyed saying they had already been approached by an overseas recruiter.

HainesAttract CEO Hamish Price says recruiters and major industries want to see the Government work collectively with the private sector to attract new talent from overseas. Photo/supplied

Price said HainesAttract and most of its major clients want the Government to get behind a major open-for-business marketing campaign, to compete with countries like Australia and Canada which were taking similar approaches to attract thousands of skilled workers from overseas.

Datacom's managing director Justin Gray said the company had hired more than 700 people since April last year thanks to concerted efforts by its team of recruiters. The company had lost "a few hundred" over the same time and was looking to fill between 100 to 200 roles at any one time.

"We are having to manage our workload across our customers to make sure we're putting people in the right place."

Gray said although he agreed that importing skilled workers was an inevitable solution in the short term, Datacom was also doubling down on efforts to train up Kiwis who would otherwise never get a chance to work in the digital industry.