I would like to respond to your article of 11 February entitled “Misuse of migrants ‘hollowing out’ telco talent” in which you report on TransWorks MD Mike Paltridge’s submission to the MED on the telco service industry.
He incorrectly claims migrant labour is being “misused” to drive down wages in the sector. Downer EDI Engineering Ltd, one of two companies named by Mr Paltridge in the article, provides field services and project management services to a number of New Zealand communications providers, and provides world-class communications solutions to its own end-user customers through our wholly owned subsidiary, DownerCommspec.
We have a staff of over 1300 people, of which about 900 are field technicians. With its genesis in a quarry in South Auckland in 1936 as Downer Construction, the Downer EDI group of companies in New Zealand — which includes Downer EDI Works — is a major employer.
Driven by demand from our customers we will continue to recruit skilled technicians from overseas, but as Mr Paltridge’s own submission to the MED indicates, overseas recruits still make up fewer than 15% of our total workforce. Our focus will continue to be on employing from within the New Zealand market.
The suggestion that migrant labour is being used to drive down wages has no basis in fact. Vacancies abound across the ICT space and organisations such as ours have to meet the market to attract and retain people no matter where they come from. Our people are skilled and mobile and we can only retain them by providing annual salary increases along with a comprehensive and rewarding employment package.
I have read Mr Paltridge’s submission to the MED; while somewhat confusing and contradictory in my mind it also misses the point. We will not be able to realise New Zealand’s Digital Strategy if we do not have a thriving and active programme of young New Zealanders training to be tomorrow’s technicians, designers, industry leaders and project managers.
As an industry we must work together to promote the telecommunications trades as an exciting choice for school leavers. We must all play our part in investing in apprenticeship programmes and providing trainees a rewarding, high quality learning experience. This is exactly the strategy in which Downer EDI Engineering invests today.
We have grown our business by 150 people in the past two years, comprising a mix of trained technicians from elsewhere in the industry, migrants from overseas and apprentices through our Modern Apprentice programme. We are one of the largest investors in telecommunications trades training in New Zealand today and happily play a leading role in supporting a flow of talent across the entire industry.
Overseas recruits augment our skill set in a growing industry but are not the only answer. A thriving apprenticeship programme with greater support from industry and the government provides the best platform for future growth. Downer has invested a lot of time and money this year in gaining industry and government support for further apprentice funding which will benefit all telecommunications providers — including Mr Paltridge.
Downer EDI Engineering Ltd
Transfield Services (NZ) Ltd would like to clarify some of the inaccuracies in the recent article relating to the employment of migrants in New Zealand’s telecommunications sector. Allegations of widespread misuse of migrant labour simply aren’t true.
Because Transfield Services is unable to access the number of skilled technicians needed to deliver projects, we are employing overseas workers. However, those migrant employees are paid exactly the same as anyone else in the same sector with the same skills, attitude and productivity.
We rely heavily on local labour in the form of trainees. It takes up to three years for an entry-level trainee to become fully productive, and takes out time from some of our best senior employees who are integrally involved in training apprentices — which is why Transfield Services has limited apprentice intakes to 50 trainees per annum.
Transfield Services has undertaken extensive advertising within New Zealand in search of skilled telecommunications workers. They simply aren’t in the market — having been lured overseas or into other professions. Our apprenticeship programme has gone some way to addressing this shortage and building toward a sustainable future.
Most telco companies in New Zealand — large and small — are now recruiting offshore. We often see them abroad in our recruitment drives. Qualified overseas technicians come into New Zealand with significantly higher skill-sets than entry-level trainees, and are therefore well ahead of the apprentice market.
There are many other companies in New Zealand’s telecommunications market, aside from the two largest service providers. These other companies include Astute, Kordia, ABI and Service Stream.
Transfield Services (NZ) Ltd has every intention of remaining in New Zealand and has no intention of withdrawing from the telecommunications sector. In the unforeseeable event of Transfield Services ever exiting this market, assets and human resources would simply pass over to the incoming contractor.
Transfield Services is an accredited employer with the Immigration Department. However, less than 5% of those employees who have joined the company from offshore have been employed under that accreditation. More than 95% of foreign staff have in fact been employed using the “general” category for employing immigrants. Transfield Services has never requested a “dispensation” to employ foreign labour.
We employ almost 1300 staff in the telecommunications sector, of which 15% are immigrants. The work undertaken by telecommunications technicians can not be compared on a wholly like-for-like basis with electrical or computer technicians. Telecommunications technicians perform some similar work to electrical technicians, and some similar work to computer technicians.
However, their work is not entirely identical. Therefore, when assessing telecommunications technicians’ pay scales, wage structures can only be partly compared to those in the electrical or computer sectors.
Many qualified telecommunications technicians with Transfield Services are paid in excess of $22 per hour. In the last two years, Transfield Services has given all its telecommunications technicians a minimum of two pay increases. Some personnel have received up to five pay increases. The last collective pay increase agreed with the Engineering, Printing and Manufacturing Union in July last year was ratified by 76% of union members.
When companies enter into contractual agreements with clients for large scale projects or contracts, several criteria are often required to be met. These include the laying of a bond, and a parent company guarantee. It is also important to remember that margins in the telecommunications sector are extremely low, and that it is only the economies of scale which allow bigger companies to profitably carry out this low margin work. Most smaller companies simply could not deliver on their contractual obligations because they can not access the economies of scale afforded larger corporates.
Executive general manager, telecommunications
Transfield Services (NZ) Ltd