New Zealand has always been a powerful magnet to attract migrants and the most critical role leaders will play in the coming months is to retain and grow our new New Zealanders. By Ed Sims.
One by one the reasons for using the language of economic recession are disappearing, some gradually, others much more rapidly.
Debates about whether or not we are heading towards, or in, a recession seem increasingly irrelevant.
This is not written from any particular political perspective. It’s simply a summary of some of our current key economic indicators.
Both interest rates and their impact on inflation seem to have peaked and may be showing early signs of returning to pre-Covid levels.
Supply chain constraints are easing in critical areas like construction, albeit directly linked to softening demand.
Perhaps most encouragingly, the labour market appears to be easing from shortfall, largely due to soaring net migration numbers in recent times.
The numbers of new migrants coming to Aotearoa New Zealand are truly stratospheric. Compared to previous highs of 60,000 new arrivals in the years from 2016 -2019, our 2023 number looks set to be around 110,000.
Now as with any economic data, some caveats are always a good idea.
The first is the reality that as a nation we are still in the business of making up for lost time and filling gaps in our skilled workforce created by the pandemic.
Secondly, new arrivals in these volumes can create their own challenges around additional pressure on housing and infrastructure.
But our role as business leaders often entails focusing on positive aspects. This influx of willing and skilled new workers is a wonderful opportunity to re-establish our position as a world leader in service industries.
While demand for products and durables remains well behind that Covid peak when we had precious little else to do but think about house improvements, demand for travel, for entertaining, for hospitality is running at all-time highs.
So the combination of a population ready and willing to spend on going out and enjoying ourselves, with a surge of positive new arrivals finally seems to add some substance to that tired cliche of ‘building back better’.
As the wise Henry Ford once put it: “Vision without execution is just hallucination”.
Growth for NZ in the coming months without strategy, planning and appropriate investment could prove transient and illusory.
To execute effectively will require significant investment in workforce capability, on-the-job training and mature labour relations, in safe and positive cultures.
Increased net migration simply won’t be enough on its own to restore our country’s proud pre-Covid reputation for some of the highest service levels anywhere in the world. Prices remain sky high, [internationally] airfares alone are in their 15th consecutive month of double-digit increases. We have become a very expensive country for visitors – we now have to demonstrate that we can once again represent value for money.
As we start to plan for spring and summer, we should all be reviewing our training budgets, we all need to be upskilling our workforces, we have to ensure the development of our people is our number one priority.
Back in the days when I was running reasonable distances, I learned that you seldom overtake the opposition when running downhill. We are still on an uphill stretch for our economy and now is the time we can move ahead of other countries by strategic investment in our diverse and inclusive workforce.
Our country has always been a powerful magnet to attract migrants. The most critical role leadership will play in the coming months is to retain and grow our new New Zealanders.
Ed Sims is a professional director and management consultant.
