Professor Paul Spoonley is the leader of a major research programme, the Integration of Immigrants, which looks at the settlement outcomes for Chinese, Indian, Korean, British and South African immigrants in Auckland. He is based at Massey University’s Albany campus and is on OMEGA’s board. He shares his insights on the immigrant talent pool in Auckland and how critical it is for the region’s growth.
Between 2000 and 2008, surveys showed that New Zealand employers were experiencing the highest skill shortages in the OECD. It was a situation which raised a number of questions:
Was there too much emphasis on labour supply and too little known about the changing nature of labour demand? (The answer was a resounding “yes”).
Were our education and training providers producing graduates who had the skills for the current labour market and were the providers themselves adequately responsive to employer requirements? (The answer was “no” on both counts).
How was New Zealand going to ensure adequate labour supply, especially of skilled labour, currently and in the future?
The answer to the last question was a mixture of train (or retrain) in New Zealand and recruit immigrants to fill labour shortages. After 2000, recruiting immigrants changed in a number of ways. One was that the immigrant selection system involved employers much more directly and there was an emphasis on ensuring that the immigrants that arrived had skills that were related to the major skill requirements of the labour market.
But the composition of those arriving had also changed. We were now recruiting from two of the most significant talent pools globally: China and India. So arrivals tended to be dominated by these two groups (between 2001 and 2006, the number of Chinese in Auckland doubled and more than 80% came from China) as well as ongoing migration from Britain. We were also using temporary visas much more as part of a “suck it and see” approach: we now had temporary business and study visa options which allowed the applicant to apply for permanent settlement after a certain period.
After 2008, the economic situation has changed – but several things mean that we are going to have to rely on immigrants to fill skill shortages. One is the aging of the population. Those in the prime working age as a proportion of the population will continue to decline unless we supplement the numbers with immigrants. Secondly, our own skilled population tends to migrate elsewhere – along with Ireland, we have the highest proportion of our skilled workforce living overseas, even if outmigration has dropped significantly as a result of the global downturn (50% fewer went to Australia in 2009). And thirdly, we simply do not have enough appropriate applicants to meet labour demand in key sectors. The health workforce is a case in point. I recently attended a welcome held by a DHB for a group of new employees. Of the 30 who were there, 28 were immigrants.
In the past decade, New Zealand has done extremely well in recruiting skilled workers. Depending on the criteria, we have done as well or even better than Australia and Canada. But in the next decade, we are going to see increased competition for skilled immigrants globally. Most OECD countries are experiencing a rapid aging of their populations. And some of those countries have barely begun to seriously consider immigrants as either a replacement population or as a source of skilled workers. Look at Japan. It has experienced a much more rapid aging of its population than a country like New Zealand, it has a buoyant economy with huge capital reserves and its skill shortages are substantial. New Zealand will have to increasingly compete with these countries for a global talent pool of workers who are prepared to move to a different country to live and work.
Recruitment – and retention – will become important issues for New Zealand employers and industries. But we also need to ask how well we utilise the human capital that immigrants have brought to this country. An ongoing challenge is labour matching – ensuring that available skilled workers are being placed in the jobs that best use their skills and experience. This is a struggle. In surveys of immigrants, we find that they sometimes chose very different careers when they come to New Zealand. But equally as often, we find that they simply cannot get jobs that are appropriate to their skills and experience.
A critical issue in this matching are the attitudes and approaches adopted by industries and by individual employers. Many employers, especially in Small and Medium Sized companies, are still reluctant to consider immigrants as suitable employees. They regard them as high risk, especially in relation to issues such as English language competency. Fortunately, we are also beginning to see more champions of immigrant labour, and more schemes that help both employers and new immigrant employees adjust to one another.
The issue of matching and of encouraging employers to regard immigrant job seekers more positively are key challenges. In the coming decade, the nature of these challenges is going to both change and become more important, for a number of reasons:
The proportion of immigrants in Auckland now comprises almost 40% of the resident population. If you count immigrants and their New Zealand-born children, then the percentage rises to over 50%. In the prime working age population, they will constitute almost 60% in this decade. They are a significant part of Auckland’s population and an even more significant part of Auckland’s job seeker and employee population. They cannot be ignored.
Immigrant businesses now constitute an important part of the Auckland economy. Look at the export education or food sectors. The transformation of Dominion Road or the building of specific ethnic business precincts (Meadowlands as an example) can not have escaped notice. These immigrant run businesses are probably a much larger part of the Auckland economy than most realise. They will increasingly define the Auckland economy and employment in the next decade.
Immigrant communities and their descendants are not simply potential employees; they are consumers and clients. In parts of the city, they make up a major proportion of the catchment of one business sector, or another. Those businesses that have understood and responded to this potential have gained new clients and customers.
As the Auckland economy seeks to export more of its products and services, there is a local resource that could be utilised: the language, experience and business skills of immigrants who understand and have done business in various expert destinations.
By 2016, I fully expect that a quarter of Auckland’s population will be Polynesian (Maori and Pasifika) while another quarter will be made up of various Asian communities. The balance will comprise Pakeha and various migrants that we might label “European”. The majority of Pasifika communities are now New Zealand-born; that is not the case for Asian communities but the New Zealand-born will make up an increasing proportion of these communities as well. They will be New Zealand-educated with local experiences. But in the meantime, we still face the challenge of recruiting skilled immigrants who will contribute to Auckland’s economic development, of using their skills and experience in ways that benefit them as well as local employers and industries, and of overcoming any reluctance to see immigrants as desirable employees.
The way in which we approach and address these challenges will be a critical component in the economic success of Auckland in the coming decade.