No Job - No Visa, No Visa - No Job
I often explain to the many potential migrants that I speak with, that our immigration system, whilst it might look complex from the outside, can be easily broken down in to three separate “streams” - one for family, one for business and the one for skills. Those three rivers of eligibility flow into a small ocean of residence pathways and while there are different categories within each pathway, they all add up to achieving the same end goal for New Zealand as a country.
We have a social obligation to grant visas to family members (in various forms), we want to attract investment and entrepreneurial skills, and then we want to bring in skills that will supplement and also reinforce our labour market. Over time we have adjusted how each of these three streams flows in to that ocean, more specifically in terms of the investment and skills pathways, with a view to securing the right mix, of the right people.
In terms of our Skilled Migrant Category (SMC), we have gradually (and I mean over decades) shifted how we measure skills from an earlier more optimistic, forward looking approach, to our current more results driven perspective. How did we do that? We made the job offer the focal point of the application. Historically our SMC system operated on the potential a migrant could bring, but since approximately 2016, the system has relied almost exclusively on applicants securing jobs first in order to qualify.
That need to have the job offer upfront has significant benefits, particularly in reducing risks with potential settlement outcomes, because those with skills on paper, have to prove that those skills can translate in to real employment that aligns with those skills, however at the same time, it has created some real challenges for migrants and also influence what our system actually does to support economic and social outcomes.
The question is whether we have pushed the job offer requirement too far, and as a result are we potentially missing out on some really good quality applicants, particularly as the world has become a far more competitive place when it comes to where people chose to live, work, invest and do business.
From Points to Pay Slips
Before the modern Skilled Migrant Category even existed, New Zealand’s approach to skilled migration was simpler and, in some ways, more optimistic. In the late 1990s and early 2000s, New Zealand operated under what was commonly referred to as the General Skills Category, introduced in 1991 and refined through the 1990s. This was still a points-based system, but the philosophy behind it was quite different to what we have today, even though it carries a very similar name. the selection process focused on a relatively broad set of indicators, including age, qualifications, work experience, employability and settlement outcomes.
Points were awarded across these areas, and applicants who met the threshold (which was periodically raised and lowered to meet demand) could be selected for residence. There was structure, but it was not tightly anchored to the labour market in the same way it is now. A job offer certainly helped, and it could boost an application and improve the likelihood of selection, however the job was not the defining feature, and it was not essential for many applicants who had strong points profiles.
Job or Visa First
In our current immigration system, the job has to come first, before the visa can follow. However this wasn’t always the case and perhaps we need to revisit policies of old.
The system was built on a relatively straightforward assumption. If you selected people with the right background, they would be able to integrate into the labour market on or shortly after arrival. That assumption reflected both the economic context of the time and the policy mindset. New Zealand was looking to build its human capital, and there was a greater willingness to make a forward-looking assessment about potential, rather than requiring proof of immediate employment.
It is also worth remembering that, during this period, immigration policy sat slightly differently within the broader economic strategy. There was less emphasis on tightly matching migrants to specific, immediate labour shortages, and more focus on longer-term contribution. The question that former system was hoping to answer was not whether someone had already secured their place in the New Zealand labour market, but whether they were likely to succeed once they got here. That distinction is a subtle but really important one. Because it meant that the decision to grant residence could come before the migrant made that labour market connection, rather than being entirely dependent on it.
That idea, that potential could be enough, is what underpinned the system at the time - a time when we were perhaps less risk averse. It is also the approach that has gradually been wound back over the past two decades. Some might argue that there was good reason to do so, considering the number of highly qualified and experienced applicants who presented well on paper, but failed to lock down a job (rocket scientists driving Ubers). However that was not necessarily a fault of the overall system, but more how it was implemented. We can be more selective in terms of that cross-border translation of experience or giving better incentives to those that would qualify under a similar scheme now. The question is whether we have now gone too far, in making the job offer, the gatekeeper.
Are We Missing Out?
Don’t get me wrong, I see how we arrived at the system we have now, given some of the issues we experienced with previous versions. Highly skilled applicants, on paper, coming here lock, stock and barrel, but not being able to find the right type of work. In many ways this was a symptom of both our popularity and also our unique size and location. Being a popular destination, meant we attracted a high level of demand, from highly skilled people - however those people, coming from very different labour markets, faced significant challenges trying to adapt to the way we operate here.
Despite a system that tried to assess employability (even with interviews between applicants and immigration officers), it was too hard to manage and officers were not properly equipped to determine who would succeed or fail. At best it was a best guess approach and whilst it worked for many, it failed for others. There were also issues with commitment, with many applicants simply securing visas as an insurance policy, not wanting to necessarily build a long-term future here.
Is Our Targeting Right
We have made job offers the focal point, but we then have a system reliant on labour market demand…sometimes we need migrants to drive labour market growth.
The job offer becoming a hard-coded requirement, created a partial (not complete) fix for that, making people prove their ability to settle and contribute as well as their level of commitment.
However it has created a challenge in that we have plenty of highly skilled, employable and committed applicants who would want to make New Zealand home, but are deterred by either the potential volatility in the labour market or the fact that they may have to go through a process of working here over a period of time to secure that future certainty.
If Covid taught us anything, it is that the nature of work is changing, with people being far more mobile, and able to adapt and work from anywhere. Add to that, the rapid advancements in AI, the types of skills that will become important to any growing economy are also changing exponentially. What we will need to make our future economy function are skills that many are only just developing, but will become incredibly valuable commodities in the hunt for global talent. We also appear to have become caught in the trap of responding to labour market shortages, by pulling on the various immigration levers we have created - the problem being that by the time someone has worked out which lever to pull, the labour market has moved on.
Our current system focuses on what we need now, favouring a reactive approach over a proactive one…but we should also be considering what we may need in a year, two or more from now. How do we future proof ourselves from the endless cycle of skill shortages, and avoid missing out.
More Migrants, More Jobs
The concept of job offers being the key component to eligibility is not new and not unique to New Zealand. Many other countries operate in the same way and a country of a similar size but quite different economic make-up would be Singapore. Singapore operates a far more discretionary, skills based system, that relies on most migrants having a level of skilled employment. However it then opens the door to those more highly skilled applicants to move more freely within the labour market. Australia and Canada as competitor countries to New Zealand, offer a more balanced approach with opportunities for those with and without jobs to qualify, although how each of these works and the importance of the job moves in flow with the political breeze.
Migrants Create Growth
Our system currently reacts to labour market needs, in the present tense, but does it work effectively to future-proof our need for skills and innovation?
What is important however, by comparison to New Zealand, is that most other countries appreciate that whilst jobs are a really strong indicator of current demand and then a way to qualify desirable migrants, there is also a place for those without the job, who can still create growth and even more employment, given the chance to live here.
Because our system relies so heavily on a job offer (in fact entirely for the SMC system), it means that we are only attracting talent that employers need right now, where there are vacancies to fill. This works really well, on the assumption there is always a steady flow of available migrants. The irony however is that as that demand grows, because we have more roles to fill, generally other countries are operating with the same demand for skills, they also compete for those skills. With people and work being more mobile, it then becomes harder to compete.
Equally, when our labour market is much softer, and there are fewer jobs, we bring in less migrants, and demand for our offering slows down - it can be harder to then build that demand back up. Migrants also bring capital, entrepreneurial skills, longer-term skills in the form of their children, and can also bring new ideas, and ways of doing business - all things that contribute to the economy in different ways. They spend money establishing themselves here, which has gains for businesses, that can then lead to more employment opportunities etc. - you see where this is going.
I will offer a slightly unpopular opinion here, but New Zealand has, for a very long time, traded on its reputation as a top-tier migrant destination, but assuming that level of popularity is constant is foolish and designing an immigration system around it, equally so. We need to think about how we can maintain that popularity with a greater variety of options for migrants with and without jobs.
Our current system works in that we bring in the skills we need and we ensure those skills are compatible in the existing labour market. However it doesn’t provide for a steady stream of skilled people who could then enter the labour market to find work, whilst bringing their capital in advance, creating their own opportunities or growing opportunities for others. It is reactive, not proactive.
What Could We Change?
While the job offer should still play a pivotal role in determining the eligibility of most migrants, I do think there is a way to balance the equation by offering a pathway for exceptional talent. We already have a Green List that splits out highly skilled and “in demand” roles, offering a direct pathway to residence for specific applicants with specific skill sets. Those applicants are under no obligation to remain in the job, that they apply with - sure they have to get here and start the job, but beyond that, we let them do as they please.
One simple way that we could generate a more future focused program is to take those occupations and where an applicant who fits the criteria, but with sustained and more extensive experience in that sector or perhaps advanced qualifications, from countries with comparable labour markets (a concept that we used to use in our skilled migrant system), we offer them residence without jobs.
That residence could then have conditions attached, requiring them to be actively engaged in their sector (employment or contracting) for a period of time over the first 12 or 24 months of the visa. We secure the skills we need, whilst still ensuring that those skills are applied, but giving really high quality applicants, the ability to realise their potential at their own speed. Sort of like a “talent” visa, but covering a broader spectrum of occupations and skills that we have already identified as important.
Using some sort of comparable labour market assessment would allow us to be more selective, and we are allowed to be selective - whilst also ensuring that we focus on settlement outcomes, both for the benefit of New Zealand and the applicant - we want people to succeed and to achieve that we need the right people to apply.
This isn’t new, but instead a modified hybrid of previous and separate policies, that recognised talent at a different level. Given the world is both more complex and fragmented, while also appreciating that skills are more mobile and adaptable - we need a skills based residence policy that hones in on that. Meeting current labour market demands is important, but we also need to plan ahead, and be a little bit more optimistic about how we can fill the labour market with skilled, committed and employable people.
Until next week!
