Who’s Coming, Who’s Going?

The coalition Government has a problem and its a fairly big one. Since the borders reopened, our net migration numbers have had more ups and downs than a US trade negotiation. When border restrictions were dropped in late 2022, and with the migrant labour taps having been turned off for two and half years, employers imported talent by the 747 load. Coupled with relaxed visa processing (the rules were the same, just the brakes were taken off), the intake of new kiwis was significant, albeit many of these arrivals actually had no clear pathway to residence.

Fast forward two and half years later, and with an economy fighting back after the covid financial stimulus sugar rush, more New Zealanders are leaving and we have fewer arrivals … arriving. Considering New Zealand has traditionally been a very popular destination for migrants (and arguably still is), something is clearly amiss.

However, putting aside the reasons for the above (which we will explore a bit more later), the Government is faced with a fairly sizeable issue and one that I know they are concerned about. The concern relates to not only why greater numbers of our younger citizens are heading offshore but also with our ability to grow and fuel growth in to the future. New Zealand, has a bit of track record of having to knee-jerk react when it comes to labour shortages and migration and given our economy follows a very predictable cycle, when we need people, we are potentially going to need a lot more than usual.

Of course plenty of those kiwis leaving now, will return, but there will be others who are slower to come back and hence, migration will once again be the solution we turn to. The real challenge for the Government however is ensuring our system is robust enough but also prepared enough to compete for that global talent as countries around the world experience the same problem.

Departures

Every month or two we hear back from Statistics New Zealand on our net migration numbers and the picture they have been painting in the last two years has been a fairly chaotic one, however more recently a somewhat disturbing trend has been setting in, with the number of kiwis leaving on a steady upward curve, with new arrivals trending downwards. We haven’t yet reached a negative situation, however there is the potential for that to happen if the trend continues.

So what is going on?

In 2024, New Zealand experienced an unprecedented exodus, with total departures equating to approximately 72,000 New Zealand citizens leaving the country, marking the highest calendar-year net loss on record. Around 38% of these departures were from individuals 30 and under, which suggests a few things, namely a desire to travel, in the post-covid era as well as the search for different employment opportunities. Roughly half of our departures (56%) were headed just a few hours away to Australia, meaning they have left, but potentially have a longer-term desire to return.

For those in lower skilled roles, there are a lot of potential employment opportunities in our next-door neighbours labour market, particularly in trades and in the mines. If you aren’t finding work here, then Australia offers a good opportunity to pick up work without having to have that higher level of skill. Australia, also competing for talent, was quick to capitalise on this, marketing directly to various industries in New Zealand.

Kiwis Leave

Kiwis leaving the country is not a new phenomenon, given our geographic distance and desire to travel.

The reasons for kiwis heading across the ditch are numerous and varied, but it isn’t new. Kiwis have always come and gone from these shores and the term “brain drain” is one that tends to surface every few years, raising more than a few political eyebrows. Covid reversed the overall trend for a while, as many kiwis returned to the safety of home and the comfort of family (before the borders closed) and obviously a lot less left, given the fear of not being able to return. When the labour market opened up significantly in late 2022, as the borders opened, more kiwis opted to stay, given the availability of work, but gradually the departure numbers began to creep up. So kiwis leaving the country is not a new phenomenon but the increasing numbers of late, and the persistence of that trend could create issues in the very near future.

New Zealand has always relied heavily on its ability to import skills from offshore, in part because we have always had kiwis leaving to travel or live overseas, but also because we simply have never been able to generate enough skills domestically. That won’t change and given we are still importing skills, despite the outflow, it is pretty clear that migration will play a key role in keeping our population numbers up.

The Government however will be concerned that when the economy rounds the bend (and we are entering the turn now by all accounts), the need for those skills is going to increase rapidly. Much like the post-covid era, this will create a potential panic response, with employers desperately trying to bring in more staff. We also wont be alone in that situation, as other countries experience the same set of circumstances. The UK, Ireland, Canada are just a few of the countries, struggling with cost of living pressures, political discontent and a variety of other domestic issues, pushing predominantly younger people to leave in search of different opportunities.

As all of those countries round the economic corner, they will be jostling to attract the best and the brightest and we will once again be in a global war for talent.

Arrivals

Of course as the numbers of people departing our shores increases, there is a direct impact on our labour market, with employers needing to fill vacancies with new arrivals. In recent times, with softer employment numbers, this hasn’t been such an immediate issue, however as things start to warm up again, and there are increasing signs of confidence in the business community that will drive that, the need for those skills will gradually increase.

Our immigration system, at least in terms of the skilled categories, relies on applicants having job offers to come to, and when the labour market is soft, and the job numbers aren’t as high, then obviously there are fewer arrivals by default. This doesn’t mean we dont have people coming in, because there are sectors that remain chronically short-staffed, particularly in healthcare, tech, trades, engineering and education.

Migrants Arrive

New migrant arrivals have slowed in the last 12 months, particularly for lower skilled applicants.

However in more general terms and in comparison to the period immediately after the border opened, we have had far few migrants arriving. Whilst the softer labour market has accounted for some of that, in the more general occupations, tighter visa requirements have reduced the number of lower skilled migrants entering the country.

The challenge in all of this is that economies cycle through ups and downs and at this stage, the next stop for New Zealand will be a potential boost in activity, leading to a need for more skills. We are already seeing signs of this as business confidence gradually increases, particularly as the recent events in the US are starting to settle down to something resembling normal.

There will come a point at which we will need to attract more skills across a broader range and whilst those who are still in demand now (health, tech, trades, engineering and education) are able to secure work and enjoy a relatively quick visa process, we will eventually need to open the doors wider to a much wider pool of people.

The other complication is that many of the migrants who arrived in that post-covid rush (in 2022) did so on temporary work visas, that allowed a three to five year stay. Some will have applied for residence, some will have extended their visas, but a large portion of the tens of thousands that came in, have no clear pathway to residence at all (unless rules are changed for skilled migrants). That leaves us with the potential problem of an exodus of those migrants, many of whom the employers would want to keep - particularly as demand starts to pick up.

That challenge is one the current coalition needs to consider very carefully, not only to ensure that employer have access to the skills they need or to be able to retain the skills they already have, but also because of the potential competition we will face when the demand for global talent kicks in.

Want To Join Us?

What this all means for the potential migrant, is that there are going to be significant opportunities available as the economy rounds that bend and given the increased numbers of locals who have already left. There will of course be plenty of those locals who decide to return, but fortune favours those who are first out of the gate.

My advice to all my potential skilled migrant candidates is that the work will come, but it might just take a bit longer to secure it. For certain applicants in those critical areas, where the demand is fairly consistent, the current lower numbers of arrivals also means a much faster processing time. We have applicants applying under the Straight to Residence pathway now, where files are being allocated to case officers within days and decisions being reached in under two weeks. However as that demand for offshore skills increases, so to will the demand for visas and those processing times will shift accordingly.

The Government will need to think carefully about how we remain attractive and in fact how we become more attractive to those global skills when we need them and certainly in some of the work I am doing, there is a desire to open the door wider to more trade and technical skills being able to secure residence. Arguably we also need to look at how our offering for skilled migrants compares and if I was honest, the current work to residence process for many of those under the points scheme, falls short of what other countries might be trying to pitch.

The good news however is that these issues are being looked at and it is clear from various recent announcements that the coalition (well at least two parties out of three) understands that migration will once again become the savior for a looming skill shortage issue. That can only work positively for those considering the move in the very near future.

For more information or to test your eligibility get in touch today and we can hopefully add you to our arrival queue in the near future.

Until next week…