The Spinoff: Rising living costs, wages may force young New Zealanders overseas

OPINION:

With living costs rising and wages worth less than they were a year ago, nearly a third of young New Zealanders are planning to move overseas for greener pastures. But higher salaries and bespoke work arrangements might just keep talent on our shores.

What would stop you from leaving Aotearoa for a job overseas? A pay rise from your current boss? Not seeing whānau and friends for a year or two? Hokey pokey ice cream or a proper meat pie?

On the other hand, Australian dollars could be enough to make you leave, given a basket of basic groceries or a trip to the doctor here is getting dearer and our wages are losing value faster than those of Australians.

Higher salaries, lower living costs, even cheaper housing … our closest neighbour is looking more attractive to the nearly one in three under-35s still planning to leave New Zealand in the next five years in search of better work.

The data point is just one of a raft of results from transtasman recruiter PersolKelly’s new workforce survey.

Economist Tony Alexander has warned employers they should get ahead of the curve now by at least flagging the prospect of raising wages, or Australia will benefit from an exodus of talent two years in the making.

“If employers think it’s bad at the moment, they ain’t seen nothing yet,” he says.

Some 60 per cent of the nearly 400 New Zealanders surveyed say Covid has changed their work priorities, ranking the option of working remotely (42 per cent), better health and wellbeing support (44 per cent), and increased salary (44 per cent) as their top job-hunting considerations.

Yet on the topic of salary, only one in five hiring managers have heard candidates say they want a pay rise, suggesting a disconnect between workers’ self-worth and their desire for more money.

Alexander says employers must address this salary blind spot. New Zealand candidates are shy about asking for a pay rise, yet if employers assume they are not interested in earning more money, those potential new hires may be lost elsewhere.

“We don’t generally walk up to the boss and say ‘Give me a raise or I’m out of here’. That’s the American way. It’s a different thing, it’s psychologically damaging. The employer would think ‘Cheeky beggar’,” Alexander says. “The danger here is this: it’s psychologically easier for both parties if the employee just shoots through and takes a job somewhere else.”

Wendy Hewson, general manager of PersolKelly New Zealand, says local hiring managers are on high alert for an impending wave of resignations as employees leave our shores once borders re-open.

The latest data follows other employment statistics putting pressure on employers to adjust if they want to avoid the anticipated “great resignation”.

“We’re very worried about that for our economy because Australia is just a short hop, skip and a jump [away and] pays a lot higher salaries in a lot of areas,” Hewson says.

The global pandemic temporarily halted New Zealand’s “brain drain”, and instead transformed the trend of losing talent to other countries into a “brain gain” as talented expats returned home. But with 30 per cent of those under 35 eager to leave, Hewson says employers will need smarter offers to keep a hold on staff as cookie-cutter solutions won’t be enough.

“If I were offered yoga sessions or gym memberships – I hate it, that doesn’t appeal to me at all. Give me a four-day week working 10 hours – I already work 12 hours so that’s like a doddle. Give me that. That really appeals to me.”

Employees and employers can both capitalise on Covid’s upheaval. In-demand candidates can command more than one job offer, Hewson says, and bosses’ salary offers must be nearer the top end to remain in contention. That leaves what else is on the negotiating table.

“What we hear is employees or candidates skiting to their friends about certain key benefits they get and those ones have been always ‘I get my birthday off’, ‘I get my work anniversary off’ or ‘I get every second Friday off’. Those are the sorts of things that people love to talk about – it’s not the dollars and cents because that’s forgotten so quickly. That gets it across the line.”

The survey shows 60 per cent of respondents would consider working remotely for a company based overseas (a figure that jumps up to 78 per cent for those under 35).

IT professional Fritz Gallardo prefers working from his home in Tāmaki Makaurau as he gets to have fun with his 7-year-old son in between virtual meetings with his bosses in Australia.

“I usually tell my son ‘I have to go back to work now’ and he’d say ‘okay, what time will be your break?’ and then [I say] ‘maybe in another hour or hour and a half because I’m going into meetings’ and [he replies] ‘okay, I’ll wait for you, Dad’.”

Gallardo has reported to the Australian office of global software provider Cisco since starting in January 2019, and working remotely has always been a feature of his work.

Before Covid-19 hit our shores, Gallardo would take his son to school before 8.30am, work from the office in Auckland’s CBD, leave at 2.30pm to do the school run and then resume working from home. Lockdown may have changed some facets of his daily routine – no school drop-offs or pick-ups so far, for instance – but he still has enough time in the morning to prepare for meetings with people working two hours behind him.

He says he would prioritise having the option of working remotely if he were looking for a new job. “I become more creative when I work on my own, and then when I need to consult my superiors and my colleagues, the technology is just right there.”

Gallardo’s experience shows it’s possible for others to take the classic work stint in Australia without having to leave New Zealand. Alexander, the economist, says our closest neighbour remains a “safety net” for those of us keen to gain some overseas experience.

“With the huge demand for staff in Australia, the higher incomes versus New Zealand’s higher cost of living, high house prices etc, I think there is going to be a movement of people across the ditch. And so I would struggle to say to a person ‘Don’t go to Australia, everything’s going to get great in New Zealand’.”

He recommends giving a move some thought, and letting your boss know you’re thinking about it “because it’s quite possible they could offer you far better pay and conditions than you think is possible”.

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