With borders opening again there are fears more Kiwis will look abroad for greener pastures. In the fourth of a five-part series, Chris Keall profiles the technology industry and its fight to retain talent.
Tech workers have always enjoyed a spell of OE. But after two years of pent-up demand, many are now heading for the airport at once.
Social media feeds are clogged with board-pass selfies as young IT staff head overseas as border restrictions ease.
For technology companies operating in NZ, it's the last thing they need.
"Talent shortages and the rising cost of living, combined with headline-making inflation, have already been creating havoc for businesses trying to retain and attract the best employees," says Xero NZ managing director Craig Hudson.
While pandemic border closures have exacerbated the tech talent squeeze, the remote-working boom has also offered a hire-anywhere solution.
"Covid has shown us the opportunities for remote working. When the borders reopen and the world begins to open up, there are even more possibilities for Kiwis to travel and remain connected."
A surprising number of tech companies still want staff to be in the same room at times, or at least in the same time zone. But Tom Wallace, founder of Napier-based property management software startup Re-Leased, which recently raised $22.5m for expansion, says his firm is happy to hire tech talent overseas - then give new hires months or longer to arrange a move to NZ.
Like Tauranga's LawVu (legal software) and Christchurch's Syft (a maker of air quality detectors), Re-Leased makes the Kiwi lifestyle - especially outside our main centres - a selling point as it seeks to attract overseas talent.
"With Covid, escaping the big city appeals to a lot of people," Wallace says.
For Hengjie Wang, co-founder of Auckland-based education software firm Kami - whose business has taken off like a rocket during the pandemic, "A strong selling point when attracting international talent is our global impact while still being New Zealand based."
He adds, "Gone are the days of tech needing to come from Silicon Valley. The past few years in particular have proven that Kiwi tech punches above its weight in terms of both its reach and impact."
Wang says Kami's culture of diversity, support for remote working and social "sense of purpose" (the firm offers its services free in its home market and bankrolls a refurbished laptops for underprivileged students programme) are also drawcards. Many younger staff in the IT job market worldwide - as in so many sectors - are now looking for a company with a mission, and one that shares their values.
It also doesn't hurt that the firm has been democratic in sharing its success. In November last year, after Kami topped the Deloitte Fast 50, all 53 staff got a $10,000 bonus.
Money is, of course, part of the equation amid a global war for tech talent.
But IT Professionals NZ (ITP) chief executive Victoria MacLennan says there are other tools for local firms beyond premium salaries - which they may not be able to afford.
"Shortening the work week rather than increasing pay is one method organisations can consider to make their compensation package more attractive than others," she says.
A related jape is unlimited annual leave. Halter, a Waikato "smart cow" cattle management startup backed by Peter Beck, introduced this policy in 2021 as it spends part of a $32m raise hiring talent. NZ-founded legal software firm Actionstep has also got onboard (see video above).
With Covid increasing stress across the board, a focus on workplace wellbeing can also help attract staff, or keep existing employees local, MacLennan says.
Xero's Hudson has been a big proponent of workplace wellbeing, introducing a series of mental health and work/life balance measures.
A number of tech-sector firms have made moves to improve work/life balance or trim their work weeks. 2degrees has introduced a new policy where it says staff can feel free to ignore calls or emails that arrive after hours. And as summer arrived last year, after the grind of several lockdowns, Vista Group was one of a number of companies to introduce half-day Fridays.
For startups, dishing out shares can be an alternative to competing in the global salary war.
Early in the pandemic, a dozen augmented-reality developers in Wellington lost their jobs as an AR pioneer and Weta Workshop partner called Magic Leap imploded. Lead designer James Everett corraled most of the exiles into a startup called NZXR, with part of the appeal being that every member of the team got an equity stake. The move paid off as Pokemon Go giant Niantic bought NZXR last month (it will continue to operate, and expand, in NZ).
Then there's creating a family atmosphere.
Ruby Kolesky co-CEO of HR software maker Joyous, says, "What will make people perform - and choose to stay - is feeling loved."
It sounds saccharine, but Kolesky offers a practical example to back it up.
"Our new engineers had some health challenges not long after starting with us. However, our employment contract didn't grant sick leave until the six-month mark [the default under NZ's employment laws]," she says.
"Within two hours of realising this Kevin Norris, our co-head of engineering, spoke to me about it and worked with our ops team - changing our contracts to ensure everyone would get sick leave from day one."
Kolesky says Joyous is also collaborative and inclusive by having three chief executives (herself and brothers Philip and Michael Carden), culture of continuously asking for feedback, and a flat hierarchical structure that sees 90 per cent of staff in just one of three roles.
And the culture of love and inclusion is also expressed at the pointy end of things, when it comes to money.
"We pay at least market rates, we offer equity, and we no longer have traditional sales roles whereby the sales folks get all the commission when we bring in new revenue," Kolesky says.
"Instead we distribute that commission across the entire team."
She adds, "This is a change we have introduced recently. It's primarily about fairness, but it also further ensures alignment and retention."
While the general opening up of borders this year will be broadly helpful, the tech sector has long argued that New Zealand should follow the US and other countries by introducing a special visa for tech workers.
In December, Digital Economy and Communications Minister David Clark announced 600 specialist tech workers will be allowed to travel to New Zealand in 2022 under new border exception rules.
Graeme Muller, chief executive of NZTech, which includes most of the large technology companies operating in NZ in its membership, welcomed the step toward a tech visa.
But he qualified, "In reality, the 600 is a drop in the ocean of current demand."
In 2019 - the final full year before the pandemic closed borders - 4462 new IT jobs were created and 3683 visas were approved for IT professionals to immigrate to New Zealand, according to a report co-authored by MBIE, NZTech and ITP).
Muller did see it as the start of a constructive dialogue with the Government, however, and his organisation has since collaborated with Clark on the launch of the recently launched NZ Tech Story - an initiative that promotes Kiwi tech employers like Xero, Soul Machines and Fisher & Paykel Healthcare to the world - and offshore tech talent - and also offers marketing toolkit resources, like template presentations and social media campaigns, that local firms can download for free.
NZTech sees the campaign contributing to a rise in the tech sector workforce from 38,000 today to 100,000 by 2030.
Muller's organisation is also backing Clark to make up for the decline in immigrants - and now the brain-drain overseas - but topping up the funnel locally.
The draft Digital Industry Transformation Plan published by MBIE in January found the scarcity of local candidates was made worse by only 30 per cent of students taking tech-related subjects at high school (a number that's dropped 2 per cent in the past five years). In 2019, only 1850 students moved from high school to a tech degree, and only 352 managed to get an internship (of 2699 who applied).
A serious lack of diversity has also been a contributor. MBIE's report says only 27 per cent of the IT workforce is female, only 4 per cent Māori and only 2.8 per cent for Pacific peoples.
While Clark has acknowledged these issues, hard policy to address them is still in the works, and moves to address the digital divide have been relatively thinly resourced.
Video gaming is one of the fastest-growing sectors of the local tech industry, but also one that feels the most shunned by the Government.
The New Zealand Game Developers Association says a survey of its members indicates 331 jobs could go unfilled this year as Kiwis head overseas and international candidates find Australia more attractive.
Mario Wynands, who heads New Zealand's largest gaming studio - Wellington-based PikPok, with around 200 staff - told the Herald his sector was handicapped because it had to compete for staff with the film industry, which received generous government rebates.
The gaming sector got no rebates and gets no tax breaks here (although the Government offers a small amount of grants for gaming startups). Wynands, and his peers like Rocketwerkz CEO Dean Hall, say that's a big problem when Scott Morrision's Government recently unveiled a A$1.2 billion package to boost local industry and lure multinational gaming companies to set up shop in Australia.
Its central element is a 30 per cent tax break called the Digital Games Tax Offset, with those gaming companies in Victoria getting an additional 10 per cent tax break - meaning for every dollar they spend on developing a new game, they get 40 cents back.
The Aussie scheme will kick in on July 1.
And when it does, Wynands says it will be harder for NZ to compete in the global war for talent.
The PikPok founder wants to expand in NZ, but told the Herald in December that: "The need for us to grow and to secure top-end talent to capitalise on numerous opportunities has meant PikPok has now committed to opening a studio overseas."
Shortly after, his firm secured new staff by buying a 20-person game development studio in Medellin, Columbia.
The gaming sector is still likely to expand - like the local tech industry overall - but the sudden exodus after two years of young staff being penned in, and only limited government moves to make us a more attractive and accessible destination for tech talent, could crimp its growth.
SATURDAY:
• London calling: Inside the fight to halt the exodus of Kiwi workers
SUNDAY:
• Recruitment tips from the masters of selling
MONDAY:
• Construction industry's 200,000-plus person shortage
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