Ideasroom

NZ business missing out on foreign graduate talent

Net migration, skills shortage, and the challenge for employers to hire the people they need are frequent themes in our media, but there is a talent pool trained right here many are overlooking – international students who have graduated from our universities. 

New Zealand has the world’s most progressive work rights policy for international students with our three-year open post-study work visa, as shown in a recent report for the International Education Association of Australia. From there, those who choose to stay can use the skilled migration path to residency. In 2015/16, 45 percent of skilled migrants had been international students, according to the Ministry of Business, Innovation and Employment.  

But this positive picture of strong policy settings is not what we hear from New Zealand employers. “There are so many perceived barriers for the vast majority of employers. There would be more openness if the process were simpler,” said Tim Watts, chair of the New Zealand Association of Graduate Employers and co-founder of TalentWire, which focuses on youth and emerging talent careers, employment and education.

Watts spoke on a recent panel of New Zealand employers organised by Auckland Tourism, Events and Economic Development (ATEED) as part of the Global Internship Conference hosted by the University of Auckland. The panel’s theme – The War on Grad Talent – is international education the key to unleashing Auckland’s business potential? – focused on how Auckland businesses can close skills shortage gaps by making use of the fantastic global talent here. 

I hear two main concerns from employers hoping to appoint New Zealand educated international graduates. The first one is that the paperwork process is too complicated. Not anymore. In 2018, the post-study work visa was changed to a three-year open visa for bachelors, masters, and PhD graduates and the employer-assisted category was dropped. So now the paperwork is on the student, not the employer. An employer can treat domestic and international graduates on the same footing, for their merit, with three years to consider progressing the international graduate on to the skilled migration path. 

The second concern is that the international graduate won’t stay with the company as long as a domestic graduate. Companies are looking for return on their training investment and many seek a timeframe that exceeds the three-year post-study work visa. While they know that transition to residency through skilled migration is an option, some feel that it’s too risky to justify the investment. If their long-term view for talent exceeds the three-year post-study work option and the transition to residency is risky, it makes hiring an international graduate more risky as well. 

Some employers recognise the shortening time expectations of today’s graduates. Paul Scantlebury from EY, one of the world’s largest professional services firms, talked about the company’s two-year graduate training programme which includes an expectation that participants will stay for an average of three years. The company often benefits from this early training when the graduate comes back to them later in their career.

New Zealand has a very mobile labour market, both international and domestic, and job duration timelines for today’s graduate are shorter in general, with domestic graduates still keen to undertake the ‘Big OE’. New Zealand educated international graduates are already on their OE and studies have found those who work through to residency with an employer may stay with that company longer than a domestic graduate. Several speakers on the ATEED panel confirmed this experience.

Education New Zealand (the government agency that supports the international education sector) has just released a new study with research agency TRA that asked small- and medium-sized enterprises (SMEs) how they perceive New Zealand educated international graduates. Many admitted they were hesitant to hire international graduates but reported high satisfaction when they have, and fairly long employment periods.

In terms of diversity priorities for New Zealand SMEs, international grads come after a focus on gender equity, Māori and Pasifika, and LGBTQI+. Louise Alexander, HR Director at Bell Gully, said that her firm has had a priority around gender equity, and is now also focusing on Māori and Pacific as an important step in their diversity strategy, alongside recruiting for broader ethnic diversity.

New Zealand has an opportunity to position international education at the centre of our strategy to attract skilled talent. According to government reports, long-term, one in three international graduates stay in New Zealand, above the OECD average of 25 percent. We attract significant numbers of international students to our higher education system and Education New Zealand is recognised globally for its powerful off-shore marketing campaigns. But there seems to be a national reticence to promote the pathway from study to work and this is creating a gap in helping employers’ meet their challenges both in Auckland and the regions. 

Skilled migration is noted in the government’s recently-expanded Regional Skill Shortage List as being essential to regional growth.   

New Zealand-educated international graduates have a lot to offer our economy. The higher education sector must work more closely with government and employers to develop a clearer talent pipeline into employment. The Global Internship Conference encouraged employers and universities to develop more internship programmes for international students and encouraged government to focus on the pathway to work. 

Our education system and culture is recognised globally for its forward-looking approach and our policies are conducive to business innovation. It’s time to hear employers’ concerns and work with them to maximise their opportunity to benefit from these progressive policies and the significant talent pool coming to study in our universities. 

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