And the construction boom thunders on

by Fiona Rotherham / 13 May, 2016
Employers struggling to find workers for Auckland’s construction explosion say the answer is to employ more migrants.
Wall of work: new houses in Auckland’s Mt Wellington. Photo/Getty Images
Wall of work: new houses in Auckland’s Mt Wellington. Photo/Getty Images

On a typical day, the country’s largest recruiter and temporary labour provider, AWF Madison Group, has 3500 blue-collar workers out on the job. Most are Kiwis, though the company hired 350 Fili­pinos for the Christ­church rebuild. Now chief executive Simon Bennett wants to hire a further 1000 migrants by the end of 2017 to fill a shortage of skilled construction workers in Auckland.

A road map of the unprecedented levels of forecast growth in the Auckland construction industry through to 2018, when it’s expected to peak, shows a “wall of work” that will create 32,000 extra jobs.

The cyclical construction industry has always relied on migrant labour in times of upturn. New Zealand already has record migration, and work visas rose 4700 to 38,600 in the year to February, with most Auckland-based. However, companies say they need to significantly increase the number of migrant workers and want the Government to make it easier.

Working In, a consultancy bringing in migrant workers, says Auckland’s skills gap is the worst it has seen and means the city needs the streamlined immigration process for temporary workers the Government introduced for the Canterbury rebuild, which has another two years to run.

“The Christchurch rebuild was $40 billion, and between now and 2020 there’s looking to be $200 billion in Auckland, which is five times that of Christchurch,” says Working In co-founder Scott Mathieson.

The first of 1000 new homes being built at Hobsonville Pt, which will be ready in 2017. Photo/Getty Images
The first of 1000 new homes being built at Hobsonville Pt, which will be ready in 2017. Photo/Getty Images

The Building and Construction Industry Training Organisation (BCITO) says Auckland is the country’s hot spot and will remain so for at least the next nine years, given the Government’s push to bridge a housing shortfall on top of commercial developments such as hotels and the national convention centre.

Chief executive Ruma Karaitiana says many construction labour skills were lost during the global financial crisis. Now the industry has been caught out by the boom, which has escalated quickly and is likely to last longer than previous one.

The labour shortage isn’t just a construction industry problem. The NZIER Quarterly Survey of ­Opinion shows the proportion of firms citing labour as the biggest growth ­constraint has risen to 14%, the ­highest since 2008.

The BCITO has 9000 apprentices in training, an estimated 3000 short of what’s needed nationally. The problem is the skills are required now, not once the apprentices are fully trained. Karaitiana says projects are at risk of delay and materials shortages are also emerging.

Fletcher Construction, which is used to gearing up for boom times, hired 15 ­British migrants in March after participating in expos in England. It still has 23 project-manager, supervisor and quantity-surveyor vacancies.

Subcontractors and others are finding it tougher to recruit qualified trades people. They’re also struggling to entice workers from outside Auckland because of the region’s high housing costs.

Mathieson says the number of skilled workers available in Auckland has been depleted and is almost dry. “Other than recycling people by poaching them from other companies, there are not many options, so their hand is being forced to look to migrants.”

But the Government doesn’t appear to share the industry’s sense of urgency on bringing in more migrants, and the problem is worsened by a worldwide construction-skills shortage.

In Auckland, the tradies being sought are across the board, including carpenters, concrete placers and form workers. However, Immigration New Zealand’s immediate and long-term skills shortage lists contain only higher-level construction jobs, such as quantity surveyors and project managers.

Michael Woodhouse: Canterbury is different. Photo/Hagen Hopkins
Michael Woodhouse: Canterbury is different. Photo/Hagen Hopkins

Immigration Minister Michael Woodhouse rejects the idea of extending the Canterbury Skill Shortage List to Auckland. It was developed in response to the earthquakes and changing labour market requirements afterwards, he says.

Employers can bring in migrant workers for occupations not on the skills lists providing suitable Kiwi workers are unavailable, Woodhouse says. Construction firms say this process takes too long when the workers are needed now.

Between July 2011 and December 2015, Immigration New Zealand approved 7079 temporary work visas under the fast-track Canterbury process, of which 3246 were for people from the Philippines. Complaints about exploitation of these Filipino migrants followed. A Ministry of Business, Innovation and Employment report last year found Filipino construction workers were the most vulnerable to exploitative practices. The most common problem was excess fees paid to recruitment agencies.

Working In focuses on attracting Filipino workers, as the populous country has large numbers of skilled workers available. The firm’s best-practice model developed to avoid exploitation includes ­employers paying workers’ airfares.

“New Zealand learnt a lot of good lessons from Christchurch, which Auckland can now take advantage of to avoid having the same problems,” Mathieson says.

The Government has worked with the ­Philippine Overseas Employment Admini­stration to tighten the rules, including tougher accreditation for labour-hire companies, extending visas for lower-skill occupations to two years and allowing migrants on essential-skills work visas to apply to shift employer.

AWF Madison’s Bennett says Immigration New Zealand is also allowing companies to apply for new temporary visas to shift migrants no longer needed in Christchurch to Auckland. He admits pastoral care for migrant workers is difficult, but has taken a different approach on hiring in Auckland, working with an Indian company to source Filipino and other migrants who have worked offshore at least once before or those who may want to apply to move their families to New Zealand permanently after working for a few years on a ­temporary visa.

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