New Zealand companies are doing a poor job in attracting and retaining talented staff despite it being perceived as the biggest challenge to meeting corporate goals, research by Harvard Business School has revealed.
Harvard professor Boris Groysberg and researcher Deborah Bell surveyed 1000 directors globally in 2012 and then zeroed in on New Zealand in a further survey between December last year and March 2013.
They found that the top strategic concern both globally and in New Zealand was attracting and retaining top talent.
But New Zealand directors were less concerned about global competitive threats than global directors despite New Zealand's high level of "brain drain".
"We found this surprising given that brain drain leaves the flight country vulnerable to competitive threats," Groysberg and Bell said in a blog published this week.
The OECD estimates around 24.2 per cent of all New Zealanders with university level educations emigrate - putting New Zealand second only to Ireland for brain drain.
Of those surveyed 42 per cent said attracting and retaining talent was the biggest challenge in line with the thinking of directors globally.
But just 8 per cent of New Zealand directors surveyed said companies did a good job of retaining talent compared to 17 per cent globally and only 9 per cent said companies were doing a good job in rewarding talent compared to 16 per cent globally.
"When we consider these differences within the context of the ongoing brain drain from New Zealand, they make sense. And although many factors influence the rate of talent flight, the lure of higher paying jobs and greater earning potential outside of the home country is a very important factor and has played a role in the emigration from New Zealand of its highly skilled workers," the pair said.
As well as uncovering a "deficit of outstanding talent management practice" in New Zealand the research also showed Kiwi boards were not doing a great job managing their own talent.
Of those questioned 58 per cent said they did not have an effective board succession plan, 60 per cent said there were skills missing from their board and 42 per cent said they did not have an effective means to address poorly performing directors.
New Zealand board directors also sat on more boards for longer than the global average.
"Although more research is needed to better understand the factors influencing board service, these differences might suggest that, in addition to closed networks, New Zealand boards are drawing from a smaller talent pool because of brain drain, that is, many New Zealanders who would be qualified to be directors have left the country," the academics added.
NZ vs. (Globally)
Average number of boards served on during career 7.1 (6.1)
Longest board service to date 9.2 years (7.4 years)
Average number of boards on which currently serving 4.1 (3.0)