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Chch firms faced with shrinking talent pool

Tuesday 28th June 2011

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Companies in earthquake-hit Christchurch are facing a shrinking talent pool for staff and senior management, the Grant Thornton international business report has found.

Tim Keenan, partner in the Christchurch office of Grant Thornton New Zealand, said demand for talent and skills was likely to have an inflationary effect on wages and salaries, as it was unlikely people outside the construction sector would move to Christchurch in the medium term.

Retention strategies were a critical focus of employers in the region as the demand for talent rose, he said.

Its survey found that last September's earthquake and subsequent aftershocks affected nearly two-thirds of the New Zealand businesses surveyed, and had impacts throughout the country.

Answers indicated that 18 percent of the businesses had long term effects, 26 percent had a medium term impact and 20 percent took a short term hit.

Lower demand was a factor for 48 percent of the surveyed companies, while destruction of transport routes and other infrastructure affected 26 percent, 24 percent had lower staff and management morale, and destruction of premises affected 18 percent.

Initially many businesses in Canterbury were upbeat about the short to medium term impact of the earthquakes, Keenan said.

"However, for those businesses who are dependent on local demand, the ongoing uncertainty caused by the aftershocks and the interim potential for Christchurch’s population to decrease, means that the health of the business has to be monitored constantly."

Potentially those businesses focused on international markets would be more confident provided they could reassure their international customers around continuity of the supply chain.

Keenan said some companies had gained from the quakes, even if the business was initially interrupted and might even have had to move because of damage to its premises. There were anecdotes, for examples, about hospitality operations that were now busier than they had been before the quakes.

But the challenge of holding on to talented staff was a problem for many businesses.

In some cases the partners of employees were saying they did not know if they could take the aftershocks any longer. That mood had become more noticeable since the big shake earlier this month, he said.

He was hopeful issues about retaining and attracting talented staff would only be a problem for two years or so.


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