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In the News: The Impact of New Zealand’s Brain Gain

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The challenges of the current environment, particularly in the international arena, have triggered an influx of New Zealanders returning home from overseas in recent months – a phenomenon widely known as the “brain gain.” While this deluge of talent could be the answer to skill gaps in many industries, the exact impact of these returnees on the economy and employment market is yet to be seen, with some people continuing to work remotely for foreign organisations, and others seeking opportunities to apply highly specialised or senior expertise in New Zealand or even starting their own businesses.  

In this recent article published by Stuff featuring Ben Pearson, experts from a range of sectors weighed in on what this Kiwi homecoming could mean for the economy and what we might expect to see in the coming months. 

In the News: The Impact of New Zealand’s Brain Gain

Alternatively, you can view the full article below (originally published on Stuff.co.nz).


New Zealand's brain gain: The talented Kiwis coming home amid Covid-19 chaos 

STUFF

They’re entrepreneurs and environmentalists, doctors and teachers, fashion designers and tech whizzes. And they’re coming home.

For decades, New Zealand has struggled with “brain drain” as young professionals flocked overseas in search of adventure and glitz – and much fatter pay packets. Little old Godzone was lovely for Christmas, but couldn’t hold a candle to the opportunities of London, New York or Sydney.

But now an international pandemic is doing what years of marketing campaigns and parents’ entreaties could not: it’s reversing the decades-long trend of seeing tens of thousands of talented young Kiwis leaving this country each year.

It’s the year of brain gain.

The Kiwi re-pats who settle in Wellington are not just competing for houses and restaurant bookings, they’re also bringing their experience and their skills, contributing to the capital’s economy and vibrance.

“My plans being back are focused on building the team here in Wellington,” said Ben Gleisner, the founder of sustainability app CoGo, who’s returned from London. “When we arrived, we had around four staff, but now that’s grown to 21.”

The numbers are still trickling in but initial indications, and plenty of anecdotal evidence, suggest that they’re coming back in droves.

They are the semi-skilled and those who’ve been away for a short time, and experienced professionals at the peak of their careers. Some have taken advantage of the worldwide shift to working from home and meeting online -- overcoming the tyranny of distance -- while others have come home because of the safety of New Zealand compared to other places that have been ravaged by the coronavirus outbreak.

“New Zealand is a very attractive place to be right now,” said Ruth Harley, chief executive of New Zealand on Air. “In the film and entertainment industry, we have definitely seen a shift in people returning.”

Between April and August, a net total of 1700 people moved to New Zealand, according to Stats NZ estimates. That included 1029 in July alone -- an astonishing achievement given that New Zealand’s borders were closed and the number of international flights had dropped dramatically.

Economists and business leaders in Wellington are excited about what this could mean for the capital.

“We want that talent to be staying in our city ... to deliver our future,” said John Allen, chief executive of WellingtonNZ, the capital’s economic promotion agency.

More Kiwis are expected to return home as more flights become available.

These people coming home will likely be in a better position to start businesses and contribute needed skills in professional industries, said Alan Bollard, the former Reserve Bank governor who now runs the Pacific Region Business centre at Victoria University.

“I think the returnees will have a positive but complicated impact on the economy; it depends on how many of them end up staying, and the skills they have,” said Bollard, who returned from Singapore in 2018 after running the Asia Pacific Economic Cooperation Secretariat there for six years.

The impact has so far been mostly felt in the housing market, where cashed-up returning Kiwis and expats still abroad are competing with first-home buyers and others looking to take advantage of record-low interest rates.

Tommy’s Wellington real estate agent Tim Clark said that Kiwi expats are snapping up houses sight unseen.

Some will not have set foot in those properties until they are handed the keys, he says, describing family members coming through houses on video calls with buyers abroad.

New technology means “people can be sitting in London, measure the size of the couch they are sitting on and drop it into the floor plan of a house in Khandallah”, he said, adding that they’re doing it in much greater numbers than ever before.

That’s likely to be great news for the person selling that house in Khandallah, but not so much for the first-time home-buyers also entering the market.

“We have seen more of them [returnees] enter the market, where they weren’t there before,” Clark said, “and these people will absolutely be making things harder for everybody.”

That pressure is hurting in Wellington’s housing market, but not in its job market. Economists estimate that a quarter of those coming back are working remotely in their jobs, so won’t be competing with locals.

Returning Kiwis are instead more likely to create jobs, said Massey University sociologist Paul Spoonley.

“I think many of those coming back are millennials, and I don’t think they are going to be employees,” he said. “I think they are going to be business owners and involved in new start-ups.”

They’re people like Gleisner, the app developer, and Frances Shoemack, who founded a natural perfume company in the Netherlands but came home early this year.

“Since coming back we've set up an office on Garrett St and I am looking at expanding the team,” she said. “I would be interested in eventually opening a perfume showroom here.”

Still, Adecco chief executive Teresa Moore said her company had seen “a marked increase in Kiwis planning to return home, including increased general enquiries from overseas”.

“They tend to be coming mainly from the UK market and their experience sits more in a senior management, white-collar level,” she said.

Ben Pearson of Beyond Recruitment, which specialises in a range of professional, specialist roles, said many Kiwis were “not quite ready to say everything is going to custard” abroad just yet and move home for good. New Zealand’s size is still a problem that not even Covid-19 can challenge.

“The scale and size of the projects and the organisations here in New Zealand can be unattractive to those workers,” he said. “I think a lot of them would be leaving some money on the table.”

Plus, there are continued skill shortages in sectors where New Zealand tends to lean on immigrants from other countries, like the civil construction industry, transport, logistics, and manufacturing.

Allen and the team at WellingtonNZ were trying their best to make sure the capital could hold on to as much talent as possible.

That means making “sure people understand that Wellington is a dynamic city”, he said.

“We have to ensure that the city continues to be attractive, in terms of events, in terms of the arts, bike trails ... we are going to need to do some work on affordable housing,” Allen said, adding that the region’s growing infrastructure issues were also a challenge.

Wellington Chamber of Commerce chief executive John Milford agreed that convincing talented returnees to stay was important.

“From a skillset point of view, you have to view it positively,” Milford said, but added it could be a challenge.

“That is a concern from a number of industries,” he said. “Once we get the vaccine and the border with Australia open, there’s always the potential that we could be losing people to Australia, and not just those people who are returning.”

Reports coming into the KEA, an organisation that tries to connect the New Zealand diaspora, suggest that many of the returnees are coming back for good.

“They are selling up houses, they are moving children, they are coming home with pets,” said Toni Truslove, chief executive officer of KEA.

That means New Zealand should plan for a tsunami of talent.

“I’d like to think that there would be some really smart initiatives put in place,” Truslove said. “There is a balancing act between Kiwis being able to come home but a management around essential and shared resources, so that their coming home remains a positive to New Zealand, not a drain on resources.”

Julie Fry, a Kiwi economist trying to find her own way home from her family’s base in New York, said the influx would be both a “massive shock” and a major opportunity.

There will be “transitional costs” for resources, including housing, healthcare, transport and schooling,” she said. “But once we shake these out, we will have a bunch of people with more senior experience who are going to be coming back and going for it. The net result is going to be fantastic.”