Global Staff Shortage: Where have all the people gone?

From Our Leader in the Indian Newslink Digital Edition dated January 15, 2023

Venkat Raman
Auckland, January 14, 2023

The global economy is suffering from serious staff shortages in almost every industry and while millions of jobs remain unfilled, workers are walking away, switching jobs, and creating in the process serious disruptions in supply chains and other areas.

Employers in New Zealand blame the Labour government and its immigration policy.

That is partly so but the demand for workers has far outstripped supply in every country. How else do you explain the phenomenon existing in countries like Canada and Australia which have opened their borders to all migrant workers?

Endemic problem after the pandemic

Take the United States of America for instance. In November 2022, just 210,000 jobs were added to the supply chain industry against the expectation of 500,000. The worldwide staffing shortage has had one of its worst impacts on the American economy.

In the United Kingdom, the Rishi Sunak government issued thousands of temporary work visas to enable companies to recruit thousands of lorry drivers.

Japan, which does not have an open immigration policy, has said it will welcome more migrant workers to address the shortage across many industries.

Every country, except India and China, seems to be reeling under a shortage of human resources.

Where have all the people gone?

According to The Economist, staff shortages existed even before the Covid-19 pandemic.

“Problems existed before the pandemic. Falling birth rates in many rich countries mean fewer people will enter the workforce in the next few years compared with recent decades, while a larger proportion will retire. In Britain, Brexit drove away foreign workers on whom some sectors relied. Covid-19 has made these troubles worse. During the pandemic, record numbers of people left the workforce altogether, making it harder to recruit staff; others took the opportunity to switch jobs, making it harder to retain staff,” it said.

The publication has cited many other reasons. Older workers in some countries (particularly America and Britain) took lockdowns and the risk of contracting Covid-19 as their cue to retire early. Strong financial markets and government handouts boosted personal savings and pension plans. Others, meanwhile, lost their jobs and saw little opportunity to re-join the workforce in their 60s or 70s.

Pew Research Centre, a think-tank, found that more than half of Americans aged 55 and older were retired by the third quarter of 2021, an increase from 48% two years earlier.

The Immigration fiasco

Almost all OECD countries depend on foreign labour to work in their industries, plants and offices. Europe is a prime example of mobility of people- travelling to work from one country to another has been a normal occurrence for decades- that had stopped during the pandemic but appears to have resumed in the past year or so.

But not so in larger economies that depend primarily on foreign labour to fill jobs.

But immigration departments in these countries are struggling to cope with the sharp rise in demand for jobs on the one hand and the thousands of applications that have piled up from potential migrant workers on the other. Hundreds of Consulates and Immigration offices were closed in many countries with staff laid off during the pandemic. Restarting these offices and recruiting and training people to handle immigration matters is a time-consuming affair.

That indeed is the crux of the problem.

For instance, stubborn case backlogs in Australia meant that 962,000 would-be migrants were stuck in limbo as of May, including nearly 150,000 highly skilled workers. However, the queue shrank in the latter months of the year as the government ramped up its efforts to make the system more efficient.

The good news in New Zealand is that Immigration Minister Michael Wood understands the plight of employers, and the looming shortage and is willing to do his best.

Since taking charge of the Immigration portfolio on June 14, 2022, and since then, has made significant changes to the Immigration systems and procedures.

He is keen to make the system flexible and responsive to the needs of the stakeholders.

“Our system has been stretched and new officers have been recruited. We now have adequate staff to manage the workload. We are experiencing huge volumes of Work and Visitor Visa applications. The backlog has now dropped to about 31,000 applications. We are prioritising older cases. Applications will be cleared but the outcome will depend on whether all required information has been provided,” he said, speaking to us on December 10, 2022.

Simultaneous opening of the Accredited Employer Work Visa system, Skilled Migrant Category, Parent and Grandparent Visas, increasing applications from international students and a high volume of visitor visa applications have all contributed to the overload of the immigration system, which is now being streamlined.

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