The Great Exodus OE: Is there a good reason young Kiwis should stay?

Dileepa Fonseka is a Business and Politics Stuff Writer.

OPINION: There are few things more embarrassing than being the last person dancing at a party after the music has stopped and everyone has moved on.

Many New Zealanders are going through this right now as our social calendars fill with drinks, Facebook feeds are flooded with photos of people in airports and we add our signatures to yet another goodbye card.

The twist on this is still that New Zealanders leaving the country are part of an old tradition of young people going blind drunk in London before sobering up and getting a good job at Lambton Quay.

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But the longer I go to those parting drinks, the harder it is for me to shake off the feeling that there’s so much more to this than a delayed world pub crawl.

More than a few seem to leave during their most productive years, intending to return only when they are at least energetic and ambitious.

As Alan McDonald, Head of Advocacy and Strategy for the Association of Employers and Manufacturers points out: “There’s a huge demand for international travel, but it’s not necessarily just about doing the Traditional EOs.

“We’ve lost three or four staff to overseas assignments in the last six to eight months, and we’ve seen decent salaries on offer, particularly in Australia.

“I lost a political adviser who is now paid AU$40,000 more than she was paid in New Zealand – so I can’t compete with that.”

What’s different about this current overseas movement is that many aren’t just looking for a booze-soaked break from life — they’re emigrating and trying to pursue full-time careers.

What if they fail? Well, granny’s moldy $500-a-week Johnsonville apartment will probably still be waiting for them when they get back.

Their departure will only make life harder for those left behind, especially with replacements of similar skill levels harder to find.

We’ve already seen a taste of this from Covid-19 and the recent push from Omicron. Many organizations were so understaffed that employees had to spend sick or double their workload.

According to Infometrics economist Brad Olsen, 300,000 people were affected by Omicron at its peak, but total hours worked fell just 0.2% in the first quarter of the year.

“Yes, there were a lot of people who were out, but there were also a lot of people who had to work even longer to try and pick up the slack.”

Olsen says evidence indicates many employees are just at breaking point.

The Treasury’s economic forecast, released last week as part of the budget, would have left many candidates for resignation with little cause for celebration either.

Brad Olsen says there are signs that many employees are just at the “breaking point”.

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Brad Olsen says there are signs that many employees are just at the “breaking point”.

House prices are expected to bottom out by mid-2023.

By then, they will still be 32% higher than before the pandemic and, while wages will have inflated 18% compared to pre-pandemic levels, the consumer price inflation index will have increased by 17% over the same period – eliminating most of those wage gains.

As Olsen says, “It’s hard to sell a compelling story to young Kiwis about why they might stay.”

That said, McDonald says the “great resignation” being talked about overseas has yet to be seen in the EMA membership here.

He says employers who have been successful in retaining employees have made real investments in their training and have been rewarded with loyalty in return.

Yet even with all of this, there are still people leaving, and those departures are starting to grow.

This causes headaches for employers who cannot replace them with overseas migrants, and tougher times for those who stay and have to take on more work.

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Competition for workers is fierce. McDonald says Australian businesses are poaching migrants stuck in our various immigration queues by promoting a move to Australia as a back door to New Zealand.

“Which is kind of the reverse of what they were complaining about us a few years ago, where people were coming here and doing backdoors in Australia.

“That kind of behavior is happening, so it’s a pretty aggressive market for talent, especially in this migration space.”

New Zealand companies are also struggling to recruit from overseas. McDonald tells the story of a big member of the EMA who usually organizes job fairs in the UK.

Australia is aggressively poaching migrants stuck in New Zealand's various immigration queues.

Peter Meecham / Stuff

Australia is aggressively poaching migrants stuck in New Zealand’s various immigration queues.

Normally they receive hundreds of job seekers. This time, they only received 11 requests.

“They were citing the high cost of housing, the high cost of living and the difficulty of access if family and friends wanted to visit New Zealand,” McDonald said.

“So it was still perceived as a bit of a closed store.”

Who can blame potential migrants for thinking all this?

After all, so many who have lived here in recent years seem to think much the same.