Does our immigration policy help fuel small business?

Craig Hudson looks at the impact a more restrictive immigration policy would have on New Zealand’s half-a-million small to medium businesses.

With potential changes on the horizon to immigration policy, small business owners and employers are concerned that changes intended to slow immigration will make it harder to find skilled staff.
The half-a-million small to medium businesses in New Zealand, which account for 97 percent of all businesses and almost a third of all employees, are part of the global growth in small businesses. Around the world, small businesses are becoming the job creators, rather than big business playing that role. Accordingly, creating an environment for small business to hire talent and their workforce will become increasingly important.

New research conducted for Xero, focusing on small-medium enterprises (SMEs), shows that one in five small to medium businesses hire overseas workers. Three quarters of SMEs that rely on hiring foreign workers believe that a restrictive immigration policy would make it harder and more costly to hire employees.

Only 27 percent of all SMEs surveyed thought that a change to immigration legislation proposed by National would have no impact on their business.

Increasingly the availability of skills, labour shortages and growing global competition for talent are impacting business confidence. Most businesses in New Zealand anticipate increasing their staff numbers in the next 12 months, but many worry about recruiting the skills and talent they need to drive innovation and growth. 

The greatest impact of a more restrictive immigration policy would be on hiring skilled and talented people. Recruitment is already an issue for many small businesses, with one in five SMEs saying it takes them more than six weeks to fill a vacancy. New Zealand has a low productivity problem, with half-full offices and stalled building sites. Suffering from a lack of skilled workers, a policy that stops talent will clearly not help improve the country’s productivity or grow our economy. 

Recruitment for SMEs is not easy – SME operators need to be skilled all-rounders, including having the capacity to recruit the people they need. Around 20 percent of SMEs surveyed by Xero say recruitment is the most concerning part of running their business and is one of their top three most dreaded tasks.

Agriculture, forestry, construction and property dominate the SME sector businesses. New Zealand is currently in the midst of a problem that many developed countries are facing, with historically low birth rates not helping to fill vacant jobs in booming areas like housing construction, agribusiness and tourism.

Even with attracting the right talent, the pace of development in technology is changing so rapidly that continual learning is a big part of companies keeping ahead of their competition. For example, since Xero migrated to Amazon Web Services, our teams can work on Artificial Intelligence (AI) and machine learning, as well as have the opportunity to go through a Stanford Learning programme. 
These types of initiatives will become the norm across most industries where technology development far outpaces what’s being taught in education institutions, with the availability and access to technology.

Some employers may have roles available that would have been previously defined as skilled jobs, but with the new income thresholds proposed earlier this year it will no longer be the case. Under the new rules, these jobs will no longer be considered highly skilled unless the salary is more than $49,000. This will affect industries where the local labour pool is not adequate to meet the demand.

The salary threshold will particularly affect provincial employers who cannot meet the salary threshold to allow their migrant worker to transition to residence.

The success of companies is built on having access to skilled and talented workforce. New Zealand SMEs need the ability to bring in the best talent from around the world and have employees work where they want and need to. 

Craig Hudson is Xero Country Manager New Zealand.