Fiji Australia Business Council Forum – 2008
“Business Tomorrow”
Global Labour Migration &
Fiji’s Brain Drain
Max Underhill
Maxumise Group
1st December 2008
What to cover!
• The questions posed for this segment of
the forum:
– Will skilled people keep migrating from Fiji or
will they come back?
– What about the most recent surges in the
migration of semi-skilled workers?
– Labour migration issues not unique to Fiji
– Talent management dominates conferences;
how do we get the right people and how do
we get them to stay?
Introduction
• What impact will the global economic
crisis have on Fiji?
• Do not know – but what we do know
however is that the global crisis has
shifted the focus, in a number of
international organisations, onto better
HCM approaches and technology for
more efficiency gains in areas that they
have not focussed on before – Fiji’s
have to compete in this environment.
What is the solution?
• At this point I could simply say “Brain
Drain” has been with us for many years it
is likely to stay so learn to live with it and
get on with managing what we have in
smarter ways!
• However it may be better for me to define
what is brain drain and what impact it has
and continues to have both globally and
on Fiji.
What is “Brain Drain”
• A large emigration of individuals with technical
skills or competence normally due to:
–
–
–
–
Conflict
Lack of opportunity/opportunity differential
Political instability
Health risks
• Brain drain is common amongst developing
nations where marketable skills or competence
is not financially rewarded as well as more
developed countries.
Wikipedia
Why leave “home”?
• Several legitimate political or economic reasons:
–
–
–
–
peace and security for himself and his family
job satisfaction
better pay and conditions
a higher standard of living, etc.
• Throughout history, countries and centres of academic
excellence which offer these attractions have received
the largest numbers of professional migrants and these
have, in turn, made substantial contributions, not only
to the economic growth of their host countries, but also
to the scientific and technological advancement of
humanity. Australian medical research, genetic
engineering are examples. What have some of our Fiji
citizens achieved overseas?
Brain Drain / Gain
• Brain drain often regarded as an
economic cost:
– emigrants are seen as taking with them the
value of their training which was often
sponsored by the government
• Converse phenomenon is brain gain
– large-scale immigration of technically
qualified persons:
• Can be where economy of scale is so large it is
insignificant e.g. Asian to Australia
New Zealand Brain Exchange
• 1990s
– 30,000 New Zealanders were emigrating each year (0.75%)
• 2005
– 24.2% of New Zealanders with a tertiary education were
living outside of New Zealand
• 2007
– 24,000 New Zealanders settled in Australia (0.6%)
– Student loans are cited as a major reason
– Graduates using higher foreign salaries to pay off their
debts.
• New Zealand also enjoys immigration of
qualified foreigners, potentially leaving a net
gain of skills – Pacific, Asia etc
Young New Zealanders leave in great numbers to experience the wider world. Many
return, but some stay overseas, giving rise periodically to concern that the country is
losing its best and brightest. With the introduction of a student loans scheme, many
graduates left to earn more money and repay their loans more quickly. The
government was initially reluctant to admit that the outflow was anything more than
had been happening for years but, as this cartoon shows, it eventually acknowledged
that the loans scheme was contributing to a ‘brain drain’. www.teara.govt.nz
Measuring the Brain Drain
Brain Drain can actually be measured:
• The degree of openness of the sending
countries (measured by the average
emigration rate)
• The schooling gap (measured by the
education level of emigrants compared
with locals/natives)
The World Bank Economic Review Advance Access originally published online on
June 13, 2007
The World Bank Economic Review 2007 21(2):193-218; doi:10.1093/wber/lhm008
Features of Brain Drain
• Strong in small countries close to major OECD
countries
• Share colonial links with OECD countries
• Countries with quality-selective immigration
programs attract immigrants
• Is this a unique problem to Fiji?
Assessing the Impact
• More than a decade ago, US presidential
candidate Ross Perot talked about the "giant
sucking sound" made as American jobs went
south of the border.
• These days, it is a phenomena that effects the
whole world.
– Highly skilled people leaving developing countries
and heading to the developed world.
• The worldwide scale of this "brain drain" is
staggering.
• Is emigration Fiji is experiencing just a part of
this world phenomena!
Reassessing the Impacts of Brain Drain on Developing Countries
By Dhananjayan Sriskandarajah Institute for Public Policy Research August 2005
That “sucking sound” is Global – we
live in a mobile world
Future Outlook
• 2009:
– Is this “sucking sound” still getting louder?
– Will the demand now diminish?
•
•
•
•
•
Global economic crisis
Recession
Job cuts
Terrorism
……
• The movement will be in all
directions and largely unpredictable
Expatriate Trends
• Expatriates returning to Australia due to crisis - the last
month a large placement agency for IT Industry
Executives received zero placements and 15 returning
citizens looking for work!
• June 08 an Australia Gov Authority went on a worldwide
search for 32 qualified Engineers “any degree - qualified
engineer” including Fiji they were only able to attract 28
engineers.
• Returning Fiji citizens - again hard to quantify but we
know it is increasing however as the numbers in the
following graph show potential employees monitor the
opportunities in Fiji and have done so since 2000.
Return to Fiji?
The Key Question
• What should be done?
• The intuitive response
– try to plug the drain
• Stemming the flows seems to make sense
– the departure of these key workers hurts the
sending countries
SO
– reducing the scale of emigration should ease the
pain
Reassessing the Impacts of Brain Drain on Developing Countries
By Dhananjayan Sriskandarajah Institute for Public Policy Research August 2005
Limiting Mobility
• May not be the most efficient or humane way
to tackle the problem - "compassionate racism"
• The notion of "brain drain" as a bad thing
needs to be carefully thought through.
• Curbing the rights to mobility limits
development
• We need to devise measures that recognize
that greater mobility, not less mobility,
is likely to be the most sustainable
& efficient response over the long term
Domestic Gain in Fiji
• The prospect of being able to emigrate
increases incentives to acquire
education.
• In other words, even in the presence of a
brain drain, the average education level
of those who remain may be higher than
it would have been without migration
• Are all the people that we have put
through tertiary education system being
utilised efficiently?
When questioned about increased
levels of emigration from
New Zealand to Australia,
Muldoon responded that these
migrants
"raised the average IQ of both
countries"
Positive Spin-offs for Fiji
• Acknowledging and accounting for the positive
spin-offs from emigration is an important first
step other than lifting the standard:
– Some of those who migrate return, often
with greater competence and ability to
contribute
– In some cases, those who leave have been
underemployed in Fiji, so their departure
may not actually result in a huge loss to the
sending country
– In other cases, the departure of skilled
workers clearly leaves a gap we need to
address
Net Impact on Fiji
• Other impacts of migration
– remittances
– inward investment
– technology transfer
– increased trade flows
– charitable activities of diaspora communities
• The net impact may actually be positive
Control is not the answer,
management is!
• While I am not suggesting there are or should be
policies that restrict emigration there policies that have
some impact:
– the policy stance should not undermine the pressures for,
greater human mobility or discriminate
• Brain drain may aggravate the shortage of skilled
workers in some sectors
– However emigration may not be the fundamental reason for
actual or anticipated shortages
• Increasing wages, improving working conditions, and
providing employment opportunities may be a better
approach than restricting mobility
• “Fiji” being the country of choice first and then being
the employer of choice may be Fiji’s answer.
• No different to attracting investors
Brain Strain
• “Brain drain” vs. "brain strain"
– Brain Strain is where the net outflow of
workers from a particular sector is actually
hampering or is very likely to hamper
economic development or the pursuit of
important socioeconomic goals.
– Poor planning does not count!
Is Fiji suffering Brain Strain?
• It is possible to identify where brain strain may
be occurring but it needs to be carefully
analysed – remove the emotions
• Fiji as a developing countries with high rates of
emigration is particularly vulnerable
• In Fiji the sheer volume of emigration suggests
that any possible positive effects may be
outweighed by negative impacts on economic
dynamism & the delivery of key public services
• Is Fiji suffering from Brain Strain? (vs Brain
Drain)
Brain Drain is a fact of life in Fiji
as it is in any developing country
but this is not necessarily all bad
for Fiji!
THE BURNING QUESTION IS THEN
HOW DO WE MANAGE AROUND THIS
BRAIN DRAIN PHENOMENA
Attracting them back to Fiji
• I am not going to repeat or try to address
all the causes of people leaving
BUT I do want to address:
• Giving people the opportunity to return
and
• Improving the general management of
our workforce as larger gains can be
made here than the emigration losses
which will also assist in attracting people
back to Fiji
Are People looking for opportunities in
Fiji?
When is Turnover a Concern?
• Too small – there
is inadequate new
blood
• Too large the cost
is excessive
• Need to get a
balance
• Need to consider
where in the
organisation the
losses are
occurring
The Cost of Turnover
• While it is OK to have between 6% and 13%
turnover; it obviously matters where in the
organisation this turnover occurs – if all from key
areas in the business then it falls into the concern
zone. A retail business has close to 100%
turnover – No not everyone turns over but the ave.
cashiers turn over is between 1.5 to 2 times a year
• Turnover cost varies between 50% and 150% of
the salary in normal circumstance (much higher in
a dispute situation 200% +):
–
–
–
–
Recruitment costs
Training and retraining
Labour withdrawal
Quality drop/sabotage
We therefore need to get
Smarter in the way we “specify”
and manage our people
It is about making Fiji workplace more
attractive and more efficient so we
can reward better and retain more
people.
Managing Our People Better – Start with a
Specification
Role
Management
Performance
Management
Reward
Matching process:
• Recruitment and Selection
• Competency assessment
• Succession Planning
• Talent management
Matching
- HR Asset
Development
Maintaining the asset
Acquiring the right asset
What are your people assets worth?
What is the cost of not developing your
people?
Emma Harrison
Applicants Calculated Pay
Required Level
$43,320
Applicants Band Size
Assessment Score
$31,341
4.72
A2
Business Performance
D
A3
Risk Management
D
B
A5
Planning
D
C
A6
Resource Management
D
D
A7
Systems and Procedures
C
B
A10
Communication
D
C
B1
Customer Commitment
D
B
B3
Commercial Focus
C
B
C1
Leadership
C
B
C3
Facilitation
C
C
D7
Technology Application
D
B
E3
Health and Safety
D
B
Personal Attribute
Accountable
Challenger
Customer Focused
Detail Oriented
Disciplined / Systematic
Enthusiastic
Perceptive
Reliable
Self Sufficient and Assured
Well Organized
Score
4.50
2.50
2.75
3.00
4.00
4.00
3.00
4.50
3.00
4.00
35.25
B
Required Level
Emma Harrison
Applicants Calculated Pay
$43,320
Applicants Band Size
Role
Size
Salary
Role
Design
5.71
$43,320
Incumbent
Emma H.
4.72
$31,341
Assessment Score
$31,341
4.72
A2
Business Performance
D
A3
Risk Management
D
B
A5
Planning
D
C
A6
Resource Management
D
D
A7
Systems and Procedures
C
B
A10
Communication
D
C
B1
Customer Commitment
D
B
B3
Commercial Focus
C
B
C1
Leadership
C
B
C3
Facilitation
C
C
D7
Technology Application
D
B
E3
Health and Safety
D
B
Personal Attribute
Difference
-21.0%
-38.2%
Accountable
Challenger
Customer Focused
Detail Oriented
Disciplined / Systematic
Enthusiastic
Perceptive
Reliable
Self Sufficient and Assured
Well Organized
Power (hp)
RoI (%)
Score
4.50
2.50
2.75
3.00
4.00
4.00
3.00
4.50
3.00
4.00
35.25
Specification/
Requirements
Delivered
35
27.65
20%
12%
B
Understanding your “People Power”
Band
Salary
Diff Band
Diff $'s
Ideal
8.23
$120,513
“Power”
“Value”
Joe Hillsborough
7.94
$107,353
-3.65%
-12.26%
Fred Nirks
7.32
$83,229
-12.43%
-44.80%
Harry McLaren
7.19
$78,743
-14.46%
-53.05%
Appointee Reward & Development
New Generation Organisations
1. Organisations worldwide are getting flatter and more focussed
on their core business or purpose.
2. This is forcing organisations into smarter utilisation of
resources in particular technology and people.
3. Higher proportion of more competent people, less lower level
competence people.
Brain Drain is a fact of life in Fiji
as it is in any developing country
but this is not necessarily all bad
for Fiji!
MANAGING OUR PEOPLE BETTER
WILL ALLOW US TO MANAGE WITHIN
THE BRAIN DRAIN AND BE AWARE
OF THE BRAIN STRAIN
The Bottom-line of Emigration
•
•
•
•
Mobility is part of the world we live in
The cost is one we will have to shoulder
The net effects is not necessarily all bad
Without it would be like having low turnover we
stagnate
• Tertiary education institutions have an
influence.
• Brain strain needs to be planned for largely by
Government.
• Improve the workplace and improve retention
and return
Thank you for this opportunity
Know your Business & Who you Need?
Strategic Direction
Performance Framework
Capability Framework
Phase 1
Structure
Phase 2
Performance Measures
Role Expectations
Employee Mgt
Phase 3
The smaller economies need to be smarter in how
they manage their human capital!
Remuneration
& Reward
+
+
=
ORGANISATIONAL
COMPETENCIES
COMPANY’S
CAPABILITIES
&
THE
PEOPLE DRIVERS
STRATEGIC DIRECTION
PERFORMANCE FRAMEWORK
CONTINUOUS IMPROVEMENT
PERFORMANCE MANAGEMENT SYSTEM
Recruitment
&
Selection
ORGANISATIONAL
AND
HR PROGRAMS
Training &
Development
Career &
Succession
Planning
Structure,
Work Practices
& Job Design
Fiji Australia Business Council Forum – 2008
“Business Tomorrow”