Bold incentives to halt brain drain

Better hours and relief from student debt are just some of the 'carrots' firms are offering, reports ELLEN READ.

With increasing numbers of early career lawyers and accountants moving overseas, professional firms are being forced to offer an ever-expanding range of incentives to keep staff at home.

Unable to compete with the huge salaries and range of work available internationally, they are looking to things such as career development, overseas opportunities, bonuses and paying off student loans to hold on to their staff.

This may be several steps away from the fun-filled perks offered by the more innovative IT companies - which can include office scooters and pool tables, clothing and grooming allowances and discounted goods - but the professions are doing their bit.

Many companies are coy about the incentives they offer - some even declined to talk about the issue - but law firm Chapman Tripp is open about its approach.

Chief executive Alastair Carruthers says the brain drain has affected the professional service firms more strongly than most because of the lure of large salaries in the UK and US markets.

New Zealand firms will never be able to match international offers, so instead must concentrate on career development, relief from student debt and a better quality of life through sabbaticals and better hours than are expected overseas, he said.

Chapman Tripp last month unveiled new plans - including career development, repaying student loans and paid sabbatical leave - to retain staff.

He said the firm noticed that staff were starting to make decisions about going overseas or leaving the company earlier than thought. After only 18 to 24 months in the job, employees had enough information to know whether they wanted to stay.

"I think we were underestimating how early people were entertaining these ideas and how significant it is for us to be getting alongside each person and asking where they see their careers going," he said.

Mr Carruthers says many people in the professions see their first job in New Zealand as a stepping stone to move out of New Zealand.

Chapman Tripp is trying to offer an alternative which means that the first couple of years at work are foundation years for further steps that can be taken within this country.

"We think that individual career planning really is the backbone of how to motivate and develop highly talented people.

"We would look at anybody's individual needs and see whether we could do something that was relevant for them. We're happy to tailor packages for individuals."

Mr Carruthers said New Zealanders had always travelled overseas. But they were now leaving earlier and in bigger numbers, and fewer were returning, instead being lured to Australia by the prospect of better opportunities there.

"This issue that we're facing in New Zealand is identical to what's being faced in Australia. It is also being faced in the US and Britain but it's characterised in those countries by an awful lot of movement between firms rather than people necessarily tearing off overseas.

"I do think that firms need to be much more focused on building careers for people. That's one of the really clear things that we're trying to offer," Mr Carruthers said.

Balancing work and home life is becoming more important, he said, as seen in the emergence of part-time work, working from home and family friendly policies.

As well as firms tailoring incentive packages, Mr Carruthers said, business leaders had to highlight the opportunities available in NZ and encourage an environment of innovation to counter the perception that overseas work is more interesting.

"One of the things that we do need to be a little bit cautious of is an artificial salary war breaking out here, where companies panic and try to match overseas salaries," he said.

There were several important economic differences between New Zealand and other countries - tax rates and cost of living are lower and quality of life is higher - against which the lure of big salaries must be tested, he said.

Martin Wylie, chief executive of the law firm Simpson Grierson, said recruiting and retaining top talent were priorities for his company.



Simpson Grierson was one of only four national law firms with a structured incentive bonus scheme.

It also had a discretionary bonus scheme, and a range of non-financial rewards to recognise staff performance.

Simpson Grierson also had a study support policy, through which it was providing financial support to potential returnees who were studying at top British universities.

Long service leave, a leave-of-absence policy and paid parental leave for all staff were also offered.

The situation is a little different for accountancy firms, where a three-year apprenticeship is mandatory for new graduates seeking a professional qualification.

But, says the national human resources director of Deloitte Touche Tohmatsu, Laurie Finlayson, talking about career development and what the firm can offer from the very start is important in retaining staff after the initial period.

"We really work with each individual on a situation-by-situation basis to look at what their aspirations are," she said.

If traveling or gaining professional expertise overseas was part of their goals, "then we would work with them."

Deloittes allowed holidays at the end of secondments and would pay return airfares.

It also offered bonuses, flexible working conditions, paid parental leave and had study and training provisions. Although it did not repay student loans, Ms Finlayson said, Deloittes would listen to individual proposals.

She said the retention problem was not just in the professions. It was a national problem that would not go away.

"I don't see that we [the legal and accounting professions] are any different from numerous other organisations, public sector to private sector, who have to cope with that New Zealand thing."

There was, however, a significant reduction in the number of travellers returning home, as many got only as far as Australia on the homeward leg.

Janet Ison, a consultant with the recruitment company Sheffield, said she had noticed an increase in retention incentives. But verifying the extent of the practice was difficult because companies did not talk publicly about what they offered.

"It's a major problem and it's something that's not going to go away," said Ms Ison.

"The main change is that although they are introducing these policies, they are going to have to think at a much more individualised fashion about what an individual person requires because that's what generation X and Y will demand."