New Immigration Minister Michael Wood has accepted some concerns hospitality sectors raised over foreign worker shortages.
But he said companies should also consider how to make low-wage jobs with insecure working conditions more attractive places to work.
Industry leaders said staff shortages, linked partly to a dearth of foreign workers, were causing some establishments to cut back on services.
Restaurant and hotel business groups said cuts to services such as room cleaning risked damaging New Zealand's reputation as a quality tourist destination.
National Party immigration spokeswoman Erica Stanford said at least 74,000 phase two residence visa applications were received since March but barely 5 per cent processed by June 17.
And Stanford said an online processing system called Advanced Digital Employer-led Processing and Targeting (ADEPT) kept crashing.
Wood said the 2021 resident visa received the largest number of applications for a single visa category in New Zealand's history.
He said the Government was speeding up processing, with 3272 of these applications processed in the last week.
Wood, who took over the portfolio on June 13, said Immigration NZ had 850 staff for what he called an enhanced online visa processing system.
Extra staff were hired specifically to process 2021 resident visas, Wood said today.
"With over 165,000 people potentially applying under the 2021 resident visa category, this will be a major contribution to stability both for migrant workers and employers," he said.
"I recognise that New Zealand's record low unemployment means that some sectors are finding it difficult to attract the workers they need."
Wood said the accredited employer work visa scheme should help with that.
"At the same time, employers in sectors that continue to pay low wages with insecure working conditions also need to consider what changes they will make to be genuinely attractive places to work."
A hotel industry association said the accredited employer scheme attached unrealistic expectations to some businesses.
The scheme had required staff be paid not the minimum hourly wage of $21.20 but the median wage, $27.76.
That was amended to $25 an hour for specific construction, infrastructure, tourism and hospitality jobs.
Hotel Council Aotearoa strategic director James Doolan said the pay requirement was not always viable for businesses seeking entry-level staff.
A severe shortage of entry-level hotel workers was impacting the country, especially Queenstown, he said.
Hospitality NZ president Jeremy Smith also said a foreign worker shortage was jeopardising some restaurant businesses and compelling them to reduce services.
Hospitality union Raise the Bar has previously said low wages, not labour shortages, were to blame for staff shortages.