Nothing's going to stop thousands of cooped-up young Kiwis from heading off now the borders are open but their departure can only exacerbate critical shortages of skilled workers. In the first of a five-part series, Jane Phare looks at what employers are doing to retain skilled workers, and what part the Government will play in terms of immigration.
Newly trained occupational therapist Jenelle Thomson doesn't hesitate when asked why she left New Zealand in February to take up a job in Brisbane.
"It was the money," she says. That and the cost of living in New Zealand, and the possibility of buying a house in Queensland much more easily than in Auckland. Thomson, 25, hasn't looked back since heading across the Ditch. She left behind the prospect of a job as an occupational therapist earning $55,000 a year at Middlemore Hospital after graduating from AUT.
In Brisbane she started on $76,340 in a private practice. If Thomson transfers to clinical work in a hospital, she is likely to earn more than $100,000. Her Kiwi partner, a civil engineer, is earning $30,000 a year more than his previous job in Auckland.
Their weekly grocery bill is $140 for themselves, and includes cooking two meals a week for two flat mates, compared to more than $200 a week in New Zealand. The couple are saving to buy a house about half an hour out of the city for $545,000.
Last year Thomson saw ads for occupational therapists in Queensland, where there is a shortage, on Seek and TradeMe and decided to give it a go. She landed a job almost straight away.
Her story is one that New Zealand employers dread hearing, knowing that thousands of skilled Kiwi workers will be heading off in the coming months, either on their OE or to jobs that pay better in places where the cost of living and housing is cheaper.
Left behind are employers and business owners in just about every sector - construction, automotive, horticulture, healthcare, aged care, digital and technology – struggling to fill thousands of vacancies. Those shortages were exacerbated by Covid-19 and border closures; Kiwis weren't leaving but neither were immigrants arriving to fill critical jobs.
Now, with borders reopening around the world, Kiwi employers are up against a global market intent on scooping up the best talent and, worse, targeting Kiwis to leave home, lured by higher salaries, better job opportunities and a change of scenery.
That competition is forcing employers here to increase salaries and add sweeteners to the job, such as training programmes, promotions, share incentives, the prospect of overseas travel and making sure offices have all the home comforts.
Rocket Lab offers staff incentives including company shares to staff, training and career development and on-site extras such as gyms, snacks and fresh fruit, a subsidised hot lunch made by the company's catering team, and dinners available for those who work late.
Even though plenty of Kiwis dream of helping to building rockets and satellites, Rocket Lab still has more than 100 skilled positions needing to be filled in the next six to 12 months. The company is also recruiting for its Neutron development team to design and build Rocket Lab's new 40m long, 480-tonne launch vehicle, Neutron. The project will be based largely on Wallop Island in Virginia but Rocket lab needs staff for its New Zealand headquarters as well.
To help grow the local talent pool, the company has established scholarships, internships, a PhD programme, and the country's first aerospace apprenticeship programme. It also runs a Space Ambassadors programme in which team members speak to hundreds of students in schools across New Zealand about careers in Stem (science, technology, engineering or mathematics) and space.
Rocket lab's communication director Morgan Bailey says although most of the team are Kiwis, the company has staff from at least 13 other countries who are now able to visit family overseas. And because the company has operations in five US states, as well as Toronto in Canada, it is increasingly offering staff the opportunity to work overseas for a time, or in some cases relocate permanently.
That helps skilled staff with career and travel opportunities while keeping their skills and knowledge within the company, she says. Other New Zealand companies big enough to have offshore offices are also encouraging young-and-restless staff to relocate overseas, often doing the same job but in a new city.
Monday Haircare co-founder Jaimee Lupton says many in her young team have the itch to travel and some have taken up an option to work in the company's Sydney office.
"The key is to be flexible, offer work travel when you can and offer the same role in another office if there is a business case to do so."
Monday's marketing executive, Valentina Rosenbaum, transferred to the company's Sydney office this year after starting with the company as an intern in 2020. She now looks after Monday's social media channels, digital content and brand partnerships, based in Australia.
Aged 20, she was ready to travel, having endured two years of Covid-19 restrictions and border closures. Many of the staff she works with were already based in Sydney so after a trip to check it out, she moved across in January and found a flat in Paddington, one train ride from the office.
"It's been a pretty seamless transition. Monday has really encouraged a lot of the New Zealand team to come over and visit or relocate."
It's more expensive to live but good public transport means she doesn't need a car. And it's a perfect city for a young person fresh from New Zealand to live in. Offering experiences overseas is a good way to keep staff, she says. Staff in Monday's Sydney and Los Angeles offices are encouraged to visit New Zealand and vice versa.
"It's such a good way to retain talent, to keep people that are really loyal to your company."
Rosenbaum would like to stay in Sydney for a few years then head to London.
"I might have to ask Jaimee (Lupton) to start up a UK team then volunteer myself to go start that up."
What is the Government doing?
As employers watch helplessly as young skilled staff head off overseas, some are angry that the Government has not done more to help ease critical worker shortages in sectors throughout the country.
Auckland Business Chamber chief executive Michael Barnett accuses the Government of being tone deaf when it comes to skilled workers shortages.
"It's almost as if our voices are not heard and that Government has a position on the workforce and immigration and it's an immovable position. What I see as the next big constraint to growth is the availability of skills. There are big shortages now and it will get worse," he says.
"Immigration says they are talking to business organisations but that is not so. If they were listening, they would have a very good picture of skills needed now and in the future. If they were listening now they would know the shortages by sector."
But the Government says it has been proactive since the borders closed in March 2020, taking a number of actions to allow employers to retain onshore migrant workers and to access more skilled workers from offshore.
Jivan Grewal, of the Ministry of Business, Innovation and Employment (MBIE) says border exceptions have been granted to more than 29,000 critical workers and a number of border exceptions have been granted for deep-sea fishing crews, dairy farm workers, advanced manufacturing specialists, shearers, qualified able seafarers and more critical workforces.
Extensions have been granted for onshore work visas and the duration of some Essential Skills visas was increased from 12 months to 24 months. The creation of the 2021 Resident Visa – a pathway to residency for onshore temporary migrant workers and their families – also meant employers were able to retain the majority of their onshore migrant workforce. More than 86,000 applications have already been received, he says.
The criteria for the Other Critical Worker border exception has been widened to allow employers greater access to migrant skilled workers until applications for work visas reopen in July. The income threshold was reduced to 1.5 times the median wage (which works out at $84,000) and employers no longer need to demonstrate the skills are not readily available in New Zealand before hiring a migrant.
But employers and business owners say it's too little, too late as they struggle to fill thousands of jobs, vacancies they say will cause shortages and delays in some industries, price increases, lack of profit and growth, and affect New Zealand's economy.
New in the worker visa mix is the Accredited Employer Work Visa which replaces six existing work visas and opens on 4 July, under which employers will need to pay the median wage of $27.76. Grewal says the new visa is the result of "significant consultation" with employers and sectors and will be much simpler process.
"It's designed to ensure New Zealanders are first in line for jobs and where genuine skill or labour shortages exist accredited employers can hire skilled migrants. We know it's new and with Covid-19, it's been a few years since employers might have tried to hire migrants, but we're confident employers will find the new process easier to navigate."
Immigration expert Reve Anstis, a senior solicitor with Duncan Cotterill, is not so sure that the new visa will be easier or that Immigration New Zealand will be able to cope. The wrap-around accreditation process will add an extra layer to an already arduous process with the onus being on the employers to smooth the way for immigrant workers, including providing information about IRD requirements, health and safety, and cost of living.
And the employer accreditations come with a cost: $740 for up to five migrant workers; $1220 for six or more workers; and $3870 if an employer wants a third party to facilitate the process. Anstis predicts that business owners will increasingly seek help from immigration lawyers, which will add to that cost.
"I think it will open up a whole new industry (to help with the visa process) because it is so time consuming."
Immigration NZ is rolling out the information slowly so it is difficult for employers to plan, he says. Companies can apply for accreditation from May 23 and Immigration NZ says it will turn applications around in 10 working days. But Anstis doubts that will be the case because of the workload and the amount of detail involved in the accreditation. He predicts accreditations won't start coming through before August or September.
One impediment to attracting skilled workers long term is a requirement that to obtain residency they must be earning 200 per cent of the median wage which works out at more than $115,400 a year. In the meantime New Zealand's airport departure gates are forming longer queues.
Account manager Sonja Rogers leaves Auckland next week for London and on to France, hoping to join crew on a superyacht in the Mediterranean. Her travelling companion, Annaleise Shortland, has resigned from her job as a video producer at NZME to do the same thing.
Rogers was an account manager at Watties, dealing with major supermarkets in the Auckland region but says her OE has been on hold since Covid-19 and that she finds it hard to save and get ahead in New Zealand. Rent, food, petrol, it all adds up, she says.
"The prospect of getting a house and things like that seems so far out of reach while paying living costs in New Zealand and earning the wages that we do."
She plans to spend at least a couple of years earning money on superyachts before basing herself in London and finding work as a sales rep. And she has no plans to return home any time soon.
"A lot of my friends have gone over there and they don't seem to come back."
Barnett says the reality is that Kiwis wanting to go on their OE will give up good roles and head off. Keeping staff here will increasingly become a challenge for employers and will involve a mixture of pay rates and working conditions. Hybrid working is not a fad, he says. "It is here to stay."
Business owners need to respond with what is good for business and productivity, and balance that with flexible and attractive working conditions for employees. But they will also need to assess the long-term toll working from home can take in some cases.
"They will need to think about the under-estimated toll of social isolation or a feeling of alienation and exclusion some have from being at home. Yes, the freedom can be great for a while but lessons have been learned of what disconnection can feel like and do to career development."