Brain drain: Businesses hit by staffing shortages as skilled workers flock overseas

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By Jean Bell for RNZ

Businesses are feeling the cost of the brain drain - the loss of know-how, project delays, hiring costs. How can they stem the tide of workers shopping overseas for a better deal?

The brain drain. The Great Resignation. The worker exodus.

Whatever you call it, the entire world is facing a labour crunch, and New Zealand isn't immune. Besides the tug of higher wages overseas, with the world reopening there's the excitement of travelling and reconnecting with far-flung family and friends to contend with.

So, what impact is that having on firms here, and what are employers doing to have the best shot at keeping hold of their staff?

Staffing shortages nobble firms

Engineering consultancy Beca, which has more than 3000 employees in Aotearoa and the wider Asia-Pacific, is one of the companies feeling the skilled worker pinch. 

A quick look at Beca's website reveals more than 300 jobs going in New Zealand alone, ranging from civil engineers to payroll jobs.

The company's building group manager Mark Spencer is anticipating it will be difficult to recruit top-notch, qualified professionals for the next couple of years.

But not filling these vacancies could leave the company hamstrung and potentially struggling to complete projects on time.  

"We're very much a people business, we're a consultancy. In a resource-constrained market, you only have a couple of options," he says.

These include taking longer, or simply telling the client that the company can't deliver the project within the target timeframe.

Spencer says staff shortages have led to competing companies poaching staff from each other and offering significant salary increases to try lure them.

"I think everyone is facing very, very similar challenges. One of the things we do need to avoid is getting into a bidding war where we're shuffling the deck and moving people between different firms. That won't ultimately increase the capacity we have."

The 'release and recapture' of OE-bound youngsters

Now that the borders have reopened, the traditional overseas experience, or OE, is back on the cards for young New Zealanders.

The potential of junior to intermediate staff pouring out the door is adding to the pressure at Beca.

"If we were to lose a significant cohort, it would undeniably affect our ability to deliver," Spencer says.

But instead of holding youngsters in a death grip, Spencer is hoping to 'release then recapture' them.

He's setting up a talent sharing scheme with a UK engineering firm called Buro Happold.

This sees younger Beca staff who are looking to move abroad encouraged to apply for roles at Buro Happold, and vice versa.

While the staff would resign from Beca and formally join the other company under the scheme, the scheme sets the expectation that staff will rejoin the company when, or if, they return to New Zealand. 

Turnover a big cost to companies

Jane Kennelly, an HR veteran who has worked in the sector for more than three decades, thinks companies need to be front footing the so-called brain drain and taking action to have the best chance of keeping hold of staff.

"To ignore [the brain drain] is to ignore it at your peril," she says. 

"When you lose staff you lose their intellectual property, you sometimes lose their whole customer group ... morale can be impacted," she says.

It's also expensive to recruit new staff, when adding up advertising fees, the productivity loss when training a new staff member, and the cost of salary increases.

"It's running into the hundreds of thousands that companies have to fork out to keep their vacancies full."

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