Employer Accreditation Process Set To Impact NZ Food Supply Chain - Expert

The scope of a review into the Accredited Employer Work Visa (AEWV) needs to be widened with up to 99% of SMEs in critical industries unable to access the programme and NZ’s food supply chain, manufacturing and retail sectors under threat, according to experts.

The Public Service Commission is set to lead an investigation into the Ministry of Immigration’s administration of the AEWV, with a focus on ‘with a focus on mitigating the risk of migrant exploitation and irregular migration’.[1]

Sharon Davies, managing director of recruitment marketing agency Talent Propeller, says supply chains in some sectors are being unnecessarily compromised as small and medium-sized employers struggle to access the AEWV scheme.

She says the review’s focus on migrant exploitation is too narrow and it needs to be widened to urgently address the issues faced by thousands of SMEs legitimately trying to employ workers and who are struggling to find staff.

Davies is particularly critical of the inefficiency of the current model and says there are 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.

“Once verified, you can pay another fee and move to the next step which is where you identify someone you want to hire. You have to then demonstrate you have advertised throughout NZ for a further six week period - the total cost to get to this point equates to around $5000.

“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 I work with, I don't know any who would prefer to go through the application process and sponsor a migrant to work as a first option, it is always a last resort - but with unemployment at just 3.6%, they struggle to find a local willing to do the work.[2]

“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,” she says.

Davies cites the findings of a recent air conditioning industry conference where only three of the largest players have managed to get accreditation.

She says there are around 150 air conditioning companies in the country which means less than 1% of this industry can take on new staff.

“The air conditioning maintenance sector provides a range of critical services in New Zealand’s supply chain - ranging from repairing refrigerated trucks through to installing office A/C units.

“In this example, barriers to accessing the AEWV have created a playing field which favours larger multinationals, at the expense of locally owned SMEs.

Davies says there are approximately 546,000 small businesses in New Zealand representing 97% of all firms. They account for 29.3% of employment and contribute over a quarter of New Zealand’s gross domestic product (GDP).[3]

“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 who were on $75,000 three years ago now able to command a $150,000 average salary - however productivity has not improved 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 the other, the outcome will be a reduction in supply and increased food prices for consumers.

“The industry has petitioned to be added to the skills shortages list so they can get people in faster, but the application process takes a further 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 designed to hamstring the majority of companies wanting to hire people,” she says.

Davies says 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 says small business owners are also being forced to fill in for employees.

“We are seeing the quiet hiring phenomenon manifest in a growing number of Kiwi companies. In a scenario where a person leaves and there is no replacement 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.

“If we don’t find a more immediate and efficient way to hire talent internationally then we are going to have a major crisis,” she says.

[1] Public Service Commission. Accessible here.

[2] Stats NZ - to June 2023 quarter. Accessible here.

[3] Stats NZ - accessible here.

© Scoop Media