Whilst the world stumbles to its feet to recover from COVID-19, a new economic storm is brewing across most First World countries. With many countries adopting a furlough scheme or government intervention in wage subsidies, the pandemic has left many businesses in ruin. For those that are not, the next major issue facing industries across the globe are shortages. Not only shortages in supply chains but equally as important, shortages in skilled workers, which further adds to the pressures already felt by many.
Countries such as the United Kingdom are reporting major skills shortages across the transport sector, to the extent whereby the Army have been drafted to fill the gap between the needs and demands of industries and that of the supply chain logistics. A recent report indicated that there were over 100,000 heavy goods vehicle drivers needed to ensure the security of the supply chain to the UK and this is in no way abating in the short term. Demand still exists and is not going away any time soon. This isn’t even mentioning the demands laid bare in the construction sector, with many companies closing divisions of their business due to labour shortages. Sure, it could be argued that this is a result of the perfect storm of COVID-19 and BREXIT, however, it doesn’t answer the simple question of how the UK will come out of this skills demand hole and what strategies and tools the government has at its disposal to enhance the skilled workforce offer. One of these is simplifying the Sponsored Worker route into the country, something the government will definitely need to look at if it is to gain traction quickly.
New Zealand, whilst at the time of writing this has seriously dodged a bullet in COVID-19, has been forced to close its borders and turn away the skilled workforce who had planned to enter the country for employment. This has caused unprecedented damage to several industries, including construction, agriculture and manufacturing. The reliance of a skilled labour workforce, by NZ industries, has been laid bare throughout the past 18 months and the demand for workers has not lessened. In fact, the demand increase is causing wage pressures, job stability issues for industries and future negative immigration compliance, through an ever-increasing demand for the skilled worker. The only way NZ will survive massive inflationary pressures is to open its borders – and quickly – as the current situation is unstainable.
Countries such as Australia and Canada equally rely on skilled labour to extract minerals from the ground, provide expertise in the health and agricultural sectors and of course the financial sectors. Hard border closures and internal instability in local governments, has led to ongoing issues of movement not only between states and provinces but now has laid the foundation for a long road ahead when full border opens do occur. Inevitably, COVID has taught us the importance of a skilled migration labour market and whilst this has been treated as a political football in many countries in the past, there may be significant focus on this in 2022 in finding the way out of economic woes.
Early in the pandemic Prime Minister of Australia, Scott Morrison declared the borders will not fully open until 2022. The reality though, is that without a long-term roadmap being decided and labour shortages continue to increase pressure, employers are left to ponder their future. With the ‘Great Resignation’ just a sign of the times, wage pressures, logistics costs and potentially the cost of lending will inevitably force change, it’s just not certain if this change is for the betterment of the countries involved and the industries in which they rely so heavily on.
All of this leads to the conclusion that there are three fundamental issues that will play an important role in the later parts of 2022. Firstly, governments will need to face up to the fact that Skilled Migration Pathways must re-open and that traditional number allocation around this in the first instance is unrealistic. Eligibility criteria need to be reconsidered in line with the ‘new economy’ needs. Secondly, they need to engage with all of the industry. Now is the time to ensure they have a future migration plan that truly reflects the future demands of the industry. And finally, that under increasing wage pressures, inflationary pressures across the globe and a population that is no better skilled than when they started this pandemic, that a new approach is needed to ensure the stability of the skilled migration market globally.