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Demographic Hole - NZ Short Of Business Leaders

Media Release
Tuesday, 24 June, 2008.

Demographic Hole Leaves Nz Short Of Future Business Leaders Says Report

New Zealand is facing a critical shortage of educated and experienced future business leaders, according to a report released today by management consultancy Swann Group Limited.

The comprehensive report identifies a “demographic hole” in the country’s business leadership pool of 35 to 50 year-olds. This “fast-emerging” shortage could create a potential leadership deficit of some 40,000 people.*

The Swann Group report, titled “The future, our leaders: An emerging chasm in the New Zealander leadership market”, concludes that the leadership talent pool available to New Zealand enterprises is shrinking rapidly. It identifies three key trends that it says indicate that attracting and retaining leadership talent will fast become an even more significant challenge for New Zealand business:

• A significant proportion of the New Zealand labour market - the baby boomers (born 1947 – 1965) will retire over the next 15 years.

• There are less people in Generation X (those below the baby boomers) to look to for leadership succession. As a result, a very substantial leadership deficit of up to 40,000 people will hollow out the leadership capability of New Zealand business.

• Leaders in Generation X are heading overseas in numbers exceeding 1500 per year, meaning there is a net migration loss of executive talent each year and not enough experienced people coming through to replace this deficit.

Furthermore, says the report, migrant figures will not fill the gap because the migrants are not of the appropriate age, and for experience and cultural reasons “are not quickly of value”.

The report says “the position of New Zealand Inc is of growing concern.”

“Emphasis must be placed on the retention and development of local New Zealanders. Efforts must be made to target expatriate New Zealanders back home to increase living standards, grow wealth and exports and most critically to lead the next generation.”

“These strategies alone are not the ‘magic pill’, but will be made effective through a significant market focus on the importance of leadership development and succession and the influence of leadership on the prosperity of New Zealand Inc.”
[*The identification of a demographic hole in the country’s business leadership is supported by the recently released ANZ Privately-Owned Business Barometer 2008 which says: “Hanging over the succession issue is a demographic with the potential to upset the aspirations of many owners whose thinking is turning to a lesser commitment of time and capital in future.”]

The Swann Group report says “quality leaders are required to manage and grow companies and to tackle the business challenges of the future. If New Zealand is to increase its innovation and competitiveness and if we are, as a nation, seeking economic growth and global participation, then addressing leadership capability and effective succession is vital.”


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