How to combat the Kiwi brain drain in IT
Kiwi Brain Drain

How to combat the Kiwi brain drain in IT

It seems like only yesterday that New Zealand was celebrating a potential brain gain, with Kiwis returning home from overseas to weather the impacts of the Covid-19 coronavirus. However, with the rest of the world finally opening up to international travel again, it appears we’re now facing another threat to our economy: a new Kiwi brain drain.

In a paper to Immigration Minister Kris Faafoi in February this, the Ministry of Business, Innovation and Employment (MBIE) estimated that 50,000 Kiwis could leave the country in the next year as the borders reopen, although this number could surge to 125,000.

While this may look like an alarming number, the departure of 50,000 people would be about the same numbers as before Covid; about 40,000 Kiwis left this country each year between 2015 and 2019. At its peak in 2012, 70,000 left New Zealand, with up to 60% believed to be young people heading off on their OE.

Departing talent not offset by incoming migrants

The difference this time, however, is that those leaving pre-Covid were offset by migrants moving to New Zealand, which isn’t happening now. MBIE pointed out the risk that it would take some time to build up this positive stream of incoming migration again.

The report outlined that any exodus could worsen labour shortages in the short to medium term because, while Kiwis can travel in and out, new migrants from other countries have to wait before they will be allowed to come into New Zealand. Coupled with delays in immigration processing, it looks like it will be a while before we could see migrants entering New Zealand again to fill labour shortages.

While staff shortages are headlining all over New Zealand and the world, what can the IT sector specifically do to combat the brain drain? Unfortunately, there is no one-size-fits-all answer.

Solution 1 – Local tech graduates

Graduation cap

The obvious solution is to look to local IT graduates, particularly since the Government announced it plans to grow skills at home. While this might sound promising, the success of this strategy relies on a surge in IT graduates in the coming years.

In 2019, for example, there were less than 2,000 IT degree enrolments and New Zealand technology association NZTech says New Zealand needs at least 5,000 new digital technology professionals each year to keep up with demand.

There are just not enough IT graduates to fill the job market and there’s no guarantee that grads will choose to kick start their tech career in New Zealand. This is nevertheless a potential source of candidates for IT roles in this country.

Solution 2 – Offshore remote workers

Remote employees

This brings us to another potential solution: remote working. The pandemic has forced a lot of local employers to resort to remote working arrangements to keep their businesses functioning. This has opened up the possibility of working away from traditional office setups and means businesses are now better equipped to work and communicate with staff in and out of the office.

Since this new way of working is up and running successfully, employers should embrace a ‘work from anywhere, hire from anywhere’ approach. This means employers should consider hiring candidates from overseas to work remotely.

Doing this opens up the talent pool immensely, which is something we don’t have the luxury of in the current hiring environment. Hiring remote IT staff is also cost-efficient, as you can potentially source staff at a competitive rate, while also saving on headcount in the office.

While there are some good benefits to hiring remote workers, it’s also important to consider the potential impact of time zone differences and how this may potentially affect your business.

Solution 3 – Outsource to 3rd party specialists

Outsourcing

Another option employers can consider is outsourcing. This is a business practice where a company hires a third party to perform tasks, handle operations, or provide services for them. Traditionally, outsourcing has been used as a cost-cutting measure. However, in this instance, outsourcing could be used as a temporary measure to fill skills shortages in the job market.

While it may sound a bit daunting, a blended model using outsourced talent plus local insourced staff is proving successful for many companies. This model maintains a base of Kiwi culture and innovative thinking but leverages support from offshore based third-party providers.

Finally, we need to look beyond our existing networks to discover new talent and open the door for marginalised groups. Traditionally, the IT industry is dominated by white males and has a reputation for having a ‘macho office culture’. A 2021 report on diversity in tech, for example, found that 68% of respondents felt uncomfortable in a tech role for reasons relating to their identity.

It also found that, while the number of women in the industry is increasing, it is still considered significantly low. Perhaps we need to consider our unconscious bias and whether that’s holding employers back from finding and hiring qualified candidates.

While the predicted numbers may look alarming for the IT sector, there are ways we can combat the brain drain. Whether it’s hiring remotely or outsourcing, there are options available to Kiwi businesses to help them future proof themselves for what looks to be a period of increasing uncertainty for the short to medium term.

Also reach out to Techspace for help finding talented employees in this tight labour market. We are leaders in the IT recruitment industry and specialise in placing candidates in hard-to-fill roles.

About the author

Gabriel DragosGabriel Dragos is the Practice Manager – Resourcing at Techspace. He provides tailored recruitment solutions to a varied client portfolio within the New Zealand ICT market.

You can connect with him on LinkedIn or send him an email.