Amy Williams, RNZ

An Auckland barbershop has hung up its razors after struggling to get visas for overseas trained staff, despite the working holiday scheme re-opening.

Mike Austen set up Eden Barbers 20 years ago but lately he was pulling his hair out trying to recruit trained cutters.

The small, central Auckland business with loyal clients employed four barbers - the last candidate he managed to get here from Europe was declined a working holiday visa twice before an immigration lawyer got it over the line.

The exercise cost $8000 and that cutter has since returned home.

"I think the writing's very much on the wall for a lot of industries like mine. I think what's happening out there is that businesses are just running leaner and leaner and they're going to basically run themselves into the ground," Austen said.

"I wasn't going to go far down that road so we made the call and cut it sooner."

He closed the doors last month.

Austen said finding local barbers ready to cut to a professional standard was difficult.

"We had an applicant who was a doorman about five years ago and that was the last thing on his CV.

"And he wanted to come and cut hair and then another girl that was out of a crash course in haircutting just out of school. We just needed people who could continue the expectations of the client base."

There was too much red tape surrounding the working holiday visa scheme, he said.

"It's very restrictive and I think as a result of the last 18 years of trying to process these visas it's hindered growth," he said.

"I had bigger sights to do a couple more stores but we just seem to have a lot of internationals which is just amazing ... but hanging on to them was just a nightmare."

The Hair and Barber Association represented 400 salons and barbershops across the country.

Its chair Niq James said the average age of those working in the industry was 26 years old and he expected even further pressure on staffing.

"Now that the borders have opened again we're going to get a bit of brain drain so the people that have trained here and have the opportunity to go overseas will go overseas.

"And we're still trying to fill that hole of people that need to come into the country to be able to fill the vacancies that we have."

He was concerned more businesses would fold.

Immigration NZ said 1120 people had arrived this year and those who were re-issued visas under the scheme, but couldn't arrive due to the shut border, had until mid-September to get to New Zealand.

Immigration NZ general manager of border and visa operations Nicola Hogg said sectors such as tourism, hospitality and primary industries would benefit from the additional workforce.

But some sectors were worried there would be no influx and small businesses would be left in the lurch as they struggle to fill vacancies.

Restaurant Association national spokesperson Mike Egan said there were major staff shortages across the sector and no sign of anyone on working holiday visas applying for jobs.

"There's just no-one applying. I put an ad up on Trade Me Jobs and even though I said they must be New Zealand residents or in New Zealand on a work visa the only replies we got were from people offshore."

Egan, co-owner of Monsoon Poon restaurants in Auckland and Wellington, was working as a kitchen hand to ease the pressure on his staff.

He said it was yet to be seen if re-opening the working holiday scheme visas would attract people here.

"You sort of worry that they'll think the country will go into lockdown and they'll be stuck here so it could be quite uncertain. Australia's making it much easier for them."

Egan said there'd been an exodus of young people working for restaurants who left on their OE since the border re-opened.

Restaurant Association chief executive Marisa Bidois said on average the industry's businesses were under-staffed by 25 percent.

"Our industry has been dealing with Covid and other winter related bugs, isolation requirements, closed borders, visa processing delays and now changes to the work visa criteria which have created the perfect storm for businesses across the country."

Wages went up by 9 percent in the last year but the sector could not rely on the local workforce alone to fill vacancies, she said.