Cover Story
High flyers
by Mary Jane Boland
A massive 24% of our highly skilled workers live overseas – but the tide is turning.
Late last year, former Waikato journalist Melanie Feisst set herself a deadline: find a job within a week or abandon her much-loved London life and return to New Zealand. Feisst, 28, had been in London for four years, making the most of its proximity to the Continent by doing lots of travelling and enjoying the Fulham home she shares with seven others: six Kiwis and an Englishman.
The recession hit her flatmates hard. By the end of the year, only two had guaranteed permanent jobs. Four had lost their jobs and the other two were actively looking for new roles because they didn’t know how long their jobs would last.
Feisst first noticed the impact of the recession in mid-2007. Between June and October, newspapers were full of announcements about unheard-of levels of lay-offs: 20,000 from the banking sector, several thousand from British Telecom.
“Then there was a lull, and I think people would like to have thought that was the end and it would pick up after that,” Feisst says. “What actually happened was that things kept rolling into the new year.”
Recruitment dried up, contractors were made redundant, and other workers were told to reduce their hours or take a pay cut. Temp work vanished and the jobs many Kiwis were doing – bar work, nannying, landscaping – disappeared. So did the six- to 12-month contract jobs that long-time expats like Feisst were used to being able to secure in consultancy, engineering, human resources and graphic design. “These were jobs that people have had for up to three years. But because you were a contractor, you were the first to go.”
Feisst’s dilemma is evident around the world, not only to Kiwis but also to the millions of others affected by the recession. New Zealand, though, may feel the effects of the returning expats more than some other countries. OECD figures show that New Zealand, with Ireland, has the world’s highest rate of highly skilled workers offshore. A massive 24% of our highly skilled workers live overseas.
But is New Zealand’s so-called brain drain of the past two decades about to become a brain regain? Many major accounting and law firms are finding that young workers who had resigned and were about to head off on their OE are asking if they can stay. And recruitment firms and some of our biggest companies report a surge in enquiries from skilled expat workers over the past few months.
After 9/11, the surge of returning New Zealanders – along with new migrants and slowing emigration – resulted in rising demand for property, which pushed up house prices, and more enrolments at higher decile schools.
Prime Minister John Key says the return of talented expats is the silver lining to the recession. He has anecdotal information and official advice that New Zealanders are now returning, particularly from the UK where the markets are extremely weak.
“New Zealand has long lamented that so many qualified and talented New Zealanders have left to live permanently overseas, and clearly if we can have them engaged in our economy, that will be a catalyst for higher growth and greater wealth in the country.”
Key predicts the brain regain will stimulate the property market and the consumer-goods market as well as bring more confidence to the business sector, with people choosing to set up businesses and be engaged in the economy. “If you look at periods where we’ve had upward property prices and stronger retail sales, they’ve tended to be correlated with times where we have high net migration into New Zealand. The Reserve Bank looks at net migration and sees that as an indicator for the likely impact on property prices and demand.”
National’s actions demonstrate its support for business, says Key, pointing to the Resource Management Act reforms and more assistance for small and medium enterprises. And he says the policy on the introduction of ultra-fast broadband is important. Key says IT Minister Steven Joyce will soon bring a paper to Cabinet on options for that policy. “For a lot of highly skilled migrants who might return to New Zealand, it’s quite possible they will establish either consulting or other businesses where there’s a high level of offshore engagement, so the internet is going to be an important part of giving them security so they can run a business from a distant location.”
Information technology expert Nat Torkington is one who is awaiting the policy with interest. He says it’s also great to see the Government starting to take steps to better address workplace shortages, such as this week’s announcement about financial incentives for teachers and health-sector graduates, but he believes more needs to be done.
“This is a great opportunity to start businesses. There will be cheaper, talented people looking for work … In times of [economic] drought, you get companies wanting to invest in smart people building great things.”
Torkington says history shows recession can help create new ventures – which would ideally suit some of the talented returning expats. After the IT bust earlier this decade, the businesses that prospered were the innovative ones, he says.
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