INTOUCH : Comment on Managing the Brain Gain

If sport can be said to be an analogy for war, professional sport has useful para­llels with executive talent management. All New Zealand employers, including the NZRU, are dealing with the challenges of open markets, attractive overseas offers for their best employees and the question of how to replace players in season’s time.
In business, like professional rugby, the rules are changing. To compete, New Zealand needs class of entrepreneurially minded business leaders who understand how to do business in the global economy and are able to identify and maximise opportunities. We need these skills because our economy is becoming increasingly inter­connected with the rest of the world – an environment characterised by its speed.
The training ground for managers in New Zealand is limited. We need to think laterally about how to build management skills. One obvious source is returning expats who have gained management experience offshore.
I believe that something of mindset shift is needed to ensure employers and shareholders can make the most of expat skills, akin to developing diversity strategy.
In this article, I make some observations based on my experiences rejoining the local business community after several years away from New Zealand.
Firstly, look at the challenges faced by expats when readjusting to the dynamics of doing business in New Zealand. While the size of New Zealand companies should facilitate quick decision making, the lack of resources available to business (corporate and start-ups) acts as brake. The relative impact on the business of any mistake is increased which creates an environment of caution. People who have enjoyed the faster pace of deal making can find this mood of conservatism disquieting.
The rate of migration means that business contacts are just as likely to be overseas too, presenting another hurdle to reintegrating into the business community and networks.
Expats return to find that legislative and social change did not stand still during their absence, requiring extra homework to understand the regulatory and political environment. Those intending to work for or sell to the Government will require an understanding of Treaty of Waitangi obligations and sustainability, particularly if they wish to move up the conventional corporate career ladder.
As the majority of corporate jobs are based in Auckland, returning expats may find themselves swapping one large city for another, with all the trappings of urbanisation, but without the salary. New Zealand can seldom pay world-class salaries but relies on ‘intangible’ benefits to attract talent. We happily cite the benefits of New Zealand’s lifestyle and trade them off against salary. However, this margin in the recruitment stakes is being eroded and we should not complacently assume that New Zealand offers lifestyle unmatched anywhere else. Kiwis migrating to Australia have made that calculation with the obvious outcome.
Since we can’t compete on salary we need to identify some of the intangible benefits on offer and then structure our management practices to maximise their usefulness.
As country we need to come to terms with the reasons why New Zealanders live overseas. For employers this means accepting that, once returned, expats may well leave again. Let’s look at this as another opportunity to build bridges to international markets. I think the KEA network has really got it right in this regard, with its philosophy of building connections between talented Kiwis, regardless of their location.
Industries which rely on creating new products for overseas markets need to embrace more of the ‘fast fail’ mentality demonstrated by our competitors. In this environment, people are rewarded, or at least not penalised, for making (honest) mistakes in pursuit of an objective. The upside is that the business learns and gains momentum over time.
The cost of business travel when developing new markets overseas may make it worthwhile to create more fixed-period offshore secondments. Consider creating special beachheads or particular projects where expats can apply their unique experience.
Ultimately, lifestyle and straight salary may not be enough to attract expats. Consider share options and other ways of attracting staff that are popular in international markets.
Expats may prefer to live in regional towns and cities but wish to maintain corporate job. Flexible working practices and high speed broadband infrastructure will be required to retain them.
We must continue to turn our small size into an advantage for doing business – especially in places like Wellington, where communities of interest can flourish.
New Zealand needs to make the most of its skilled expats, whether they are located on or offshore. To do so requires some flexibility in how expats are motivated and rewarded. Rather than viewing this as favouritism, see it as an extension of diversity strategy, ensuring the organisation has the breadth of skills and experience to compete in rapidly changing market.
Employees newly arrived from overseas need to be up front about their expectations, not just within the parameters of their job but their wider reasons for being back in New Zealand. In turn, employers need to hone in on and exploit those intangible reasons to their fullest advantage.

Glyn Williams is CEO of software house Onstream Systems.

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