Upstart Nation #3: Retaining talent

23/08/2023·2 mins to read

Upstart Nation #3: Retaining talent

The Startup Advisory Council (Council) recently published a comprehensive report, "Upstart Nation," aiming to accelerate innovation and development in New Zealand’s startup ecosystem (Report).

The Report sets out a detailed strategic plan to maximise the potential of New Zealand startups. We’re taking a closer look at some of the recommendations.

In this update, we’re looking at the Council’s recommendations for ensuring New Zealand startups can attract and retain talent.

Background

Since 2015, the global talent shortage has doubled. As at 2023, 77% of employers globally have reported difficulty in recruiting the skilled talent they need for their businesses. New Zealand employers have also struggled with finding and retaining talent, particularly in the tech sector. Startups have long experienced difficulty in filling critical roles, such as software developers, deep tech experts, and executives with scale-up experience from within New Zealand.

The lack of available talent in these fields has hampered the speed at which startups can develop and their ability to scale, forcing many startups to look overseas for talent. However, the trials that New Zealand’s employers face trying to bring in skilled workers are widely recognised and documented. To maximise the potential of New Zealand startups, it is crucial that New Zealand has a simple and easy path for skilled workers to migrate to New Zealand.

Immigration

The Report underscores the need to refine the Accredited Employer Work Visa (AEWV), making it straightforward for individuals with relevant startup skills to immigrate to New Zealand, and ensuring that the AEWV is right-sized for startups. The Report proposes that Accelerate Aotearoa (being a proposed agency dedicated to boosting the entrepreneurial ecosystem in New Zealand) create resources to help startups understand the accreditation and immigration process and assist with establishing a clear pathway to home ownership and residency for migrants to New Zealand. The Report also recommends exploring the possibility of accrediting recognised investors, such as Callaghan-funded incubators, and venture capital firms, allowing startups that they invest in to automatically receive accreditation, or have a streamlined pathway to it.

The Report suggests reinstating a “Startup Visa” to entice startup founders to move to New Zealand and base their startup here. Founders would have a set time period to establish their startup in New Zealand and to raise capital and would need endorsement or sponsorship from a recognised participant in the New Zealand ecosystem. The Report also proposes creating a “Global Talent Visa” to expand New Zealand’s pool of experienced mentors and advisors. This visa would allow exceptionally skilled, high-earning individuals (minimum global income of US$200,000 per year) to work remotely in New Zealand, provided they participate in at least two New Zealand startup industry events per year.

Our view

The struggles that potential immigrants have faced with New Zealand’s immigration process have been well documented. The introduction of the AEWV represented a policy shift away from multiple visa categories towards one overarching visa type in order to standardise and simplify the process, but has resulted in a one-size-fits-all approach that may not recognise the nuanced needs of different industries. Employers have struggled to navigate the AEWV process when bringing in essential workers. The Council’s recommendation to refine the AEWV and introduce new startup visa categories attempts to reconcile the need for skilled talent with the complexity of the immigration system. However, given the deliberate transition to one overarching visa category, it seems unlikely that this Government will have much appetite for reintroducing multiple visa categories.

Even if New Zealand can resolve its immigration issues, it would need to set itself apart from other countries in order to attract startup founders to move to New Zealand. Issues including geography, economic environment (including New Zealand tax regime), and capital availability impact on New Zealand’s ability to attract and retain the entrepreneurial people so critically needed at present. The Government has a central role in establishing a more favourable economic environment to make New Zealand a more attractive destination to startup founders. If established, Accelerate Aotearoa and other players in the entrepreneurial ecosystem will have a central role in selling New Zealand globally.