New Zealand is struggling to attract and retain talent according to new research. How can the country turn this around before it gets left behind?
The battle may be on in the global war for talent but New Zealand looks likely to be on the losing side, according to new research by the Harvard Business School.
A study carried out Harvard professor Boris Groysberg and researcher Deborah Bell revealed “a considerable deficit of outstanding talent management practice in New Zealand companies”.
The pair surveyed 1,000 board members in 59 countries then focused on New Zealand for further research, surveying Kiwi directors between December 2012 and March 2013.
Of the New Zealand directors surveyed 42% said attracting and retaining talent was the biggest challenge, which was similar to the thinking of directors globally. However, New Zealand directors were substantially less concerned about global competitive threats than directors globally.
“We found this surprising given that brain drain leaves the flight country vulnerable to competitive threats,” the pair wrote on Harvard Business Review blog.
The OECD estimates around 24.2 per cent of all New Zealanders with university level educations emigrate which puts New Zealand second only to Ireland for brain drain.
Despite the high level of brain drain and concern of attracting and retaining talent only eight per cent of Kiwi director respondents said companies were doing a good job in rewarding talent (globally it’s 17%) and nine per cent said companies were doing a good job in rewarding talent (16% globally).
Additionally, the research found New Zealand boards were not managing their own talent effectively. Fifty-eight per cent said they did not have an effective board succession planning process for directors, 60% said skills were missing on their boards, and only 35% agreed that their boards provided effective training for new directors.
Co-founder of Grad Connection New Zealand and Chairperson of New Zealand Association of Graduate Employers, Tim Watts, said to reduce the country’s brain drain and enhance boards companies need to invest in young people.
“The better we can look after them when they come out of university and into that first five years of their work, the more likely we’re going to have a better pool of people,” he said.
Watts said there is still a lack of investment in people from organisations. The vast majority of people going into the workforce from tertiary are looking for jobs in New Zealand first, he explained, and companies need to offer something attractive to graduates that gives them broad experience and opportunities.
“The top three things in our Grad Connection Pulse Survey from last year that a graduate was wanting in their first job, number one was a structured program – is there a mentor or buddy?, number two training and development, are they going to be continued to be invested in?... and three defined career pathway. All of them interlink with each other.”
BusinessNZ Chief Executive Phil O'Reilly told HRM Online there was a need for better processes around appointing and managing directors in New Zealand.
"Getting the right skill match, setting the right performance targets and having systems in place to help deliver on targets and goals – it's a challenge at every level of a company, but even more so at board level,” he said.
"New Zealand's relatively small number of companies with formal boards may make board survey findings less reliable than in other countries, but there's no doubt that we need to improve on our results for retaining top board talent.
"Widening the pool of talent from which directors are drawn, better thinking around the strategic choices available to boards, and better matching of directors' skills to company strategies would help improve company outcomes as well as helping retain valued directors."
