The Government has rejected industry calls to place restaurant and cafe managers on the country's Immediate Skills Shortage List.

The Restaurant Association and Hospitality New Zealand jointly penned submission letters to the Government and provided evidence of the hospitality industry facing a severe shortage of cafe and restaurant managers, however, a decision delivered by the Ministry of Business, Innovation and Employment (MBIE) has shut down hopes of hiring overseas workers to fill the void.

The Government says businesses would be able to fill these roles if they increased pay rates for the occupation.

The Immediate Skills Shortage List is a regional measure that identifies whether there is a skill shortage within a certain region. If a certain job is on the list and an overseas worker meets the requirements for that occupation, they may be granted an Essential Skills Work Visa.

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Businesses operating in the hospitality industry say it is extremely difficult to recruit restaurant and cafe managers, a role which requires at least five years experience.

A Hospitality New Zealand member survey found 92 per cent of its employers had difficulty recruiting for this role.

Sky City was also cited in MBIE's decision letter, it said that Auckland hospitality and tourism employers were facing "unprecedented skill shortages".

But MBIE said Government figures show a different story and that "occupation replacement levels could be sufficient if industry terms and conditions of employment were attractive."

MBIE said restaurant and cafe managers earned an annual mean salary of $40,027. The Restaurant Association, however, said the average salary was $53,000 or $20.75 hourly rate.

The Government forecasts occupation growth and retirements was about 682 positions per annum until 2026. It said the Ministry of Social Development had 160 jobseekers as of July 2018 who claimed to have more than 12 months of work experience in this occupation.

It also said graduates for hospitality management were currently at about 285 per annum and qualifications for the industry were at about 720 each year.

The occupation was last reviewed in 2014 - a decision then was also made not to add restaurant and cafe managers to the list.

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Restaurant Association chief executive Marisa Bidois said the hospitality industry would disagree with the Government's view.

Bidois said it took on average between eight and 16 weeks to recruit restaurant and cafe managers and claims that simply increasing the salary for this occupation would fix the problem were false.

She said that simply was not an option for most hospitality businesses.

"Hospitality businesses are really controlled by what consumers are willing to pay. I very much doubt many of our consumers would be willing to pay three times what they currently pay for their takeaways or meals at restaurants and cafes."

Marisa Bidois, chief executive of the Restaurant Association. Photo / NZME
Marisa Bidois, chief executive of the Restaurant Association. Photo / NZME

Businesses in Queenstown, Hawke's Bay, Bay of Plenty and Auckland were struggling the most by the shortage in restaurant and cafe managers, she said.

"I don't think it's fair on the industry for the Government to use immigration policy to try and control what an industry pays," she said.

"We understand what the Government is trying to achieve. We want to be able to hire more Kiwis as well - that very clearly comes through from the industry, the problem is there is a disconnect between that ideal and what's actually happening."

Bidois said the decision not to include this occupation on the skill shortage list appeared to be based on data from 2012 and 2013.

Immigration Minister Iain Lees-Galloway said the Government was working to build a system to meet regional labour needs "without reaching for immigration as the first resort".

"Café and restaurant manager roles were declined due to a lack of evidence that effective training and retention strategies have been implemented by the industry to employ New Zealanders. This doesn't mean they can't employ migrants, it just means they have to satisfy a labour market test before recruiting migrants," Lees-Galloway said.

The Immediate Skill Shortage List will be replaced by a Regional Skill Shortage List next week.