• Steve Morris

The Secret to Retaining Foreign Hires During a Skills Shortage.

According to Smart Move the marketing arm of Auckland Tourism, Events and Economic Development (ATEED), 32,000 new construction workers are currently needed in Auckland alone.

Companies are now recruiting from overseas to fill the skills shortage gap. Foreign hires are not cheap to employ; they understandably tend to demand high salaries and once recruitment firms, visa agent fees, removal companies and housing packages are taken into account, the costs can be quite substantial.

The critical skills shortage in the construction industry raises questions around employee retention. One common way to retain people during a skills shortage is to keep pumping up salaries. For example, in the last year alone the construction industry has witnessed a 21% increase in salaries, with the average annual salary now standing at over $90K.

Money alone does not motivate people for long however, and if a foreign hire doesn’t feel welcome, supported or otherwise settled into their new environment, they will either move to another company or return back to their country of origin. As an example, of all managers given overseas assignments as expatriates, 16-40% end them early*. Cultural issues are the cause of 99% of early terminations, not job skills or salary, and the cost of each failed expatriate assignment has been estimated anywhere from $250,000 to more than $1.25 million when expenses associated with moving, downtime, and other costs are included. Interestingly, many expatriate assignments fail because the accompanying spouse and family have not adjusted culturally.

It is therefore essential within this very competitive environment that foreign hires (and accompanying spouses) are provided with settling services and cross-cultural training if they are to be as productive and engaged as possible. An expatriate who has received cross- cultural training will get up to speed on the new assignment more quickly, which in turn makes better use of the costly expense of bringing talent in.

Simply put, the costs associated with cross- cultural training is a small investment compared to those associated with a failed overseas assignment. The value-added is self-explanatory!

*Economist Intelligence Unit, 2006.

Morris Consulting Group adds value by partnering with companies to reduce the costs associated with undesired staff attrition rates. We do this by working alongside people to improve workplace engagement, happiness, performance and productivity. We stop the leak, so you can focus on sailing the ship.


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