Bad bosses the real reason behind Kiwi brain drain

This is the title of an article featured on the Auckland University  website ( on 8 August 2011

Senior economist/Assoc Business School Professor  cites research into 152 New Zealand companies that shows our businesses rank 16th  out of 16 countries for addressing poor performance and 14th out of 16 for retaining high performers

She claims that the research is pointing to this as a key brain drain driver; that where there has been World Bank-funded  management support programmes for small-to-medium-sized firms in developing countries, preliminary findings are positive, and that management training is essential to address New Zealand’s prevalence of “bad bosses.” The article uses the terms “strikingly bad” and “significantly worse” than other countries.

She strongly condemns efforts to close the gap with Australia and reverse the poor capital-to-labour ratio while ignoring this critical area. The evidence is that management skill accounts for more than 30% difference in productivity and a single percentage point increase in management skill equates with a  65% increase in invested capital.

 “New Zealand’s productivity is low and falling; our gap with Australia is large and rising. We spend more hours at work yet produce less value per hour…. We need smart managers who make smart choices, and we need to get rid of nightmare bosses for good.”

But with ongoing cut backs, managers’ ‘span of control’ has expanded and stretched and without a workforce ready, willing and able to step up and help manage, it is a recipe for disaster. To get the workforce ready, willing and able requires effective, visible management and leadership, neither of which requires much time nor money to develop.

Speaking with another economist (coincidentally) this week, he told me that both he and a colleague had left companies due to a bad boss. The stress on both managers and staff is higher than ever. And the NZ economy doesn’t need more stress, especially that which is self-imposed.

A 2009 McKinsey Research report showed that staff value a performance conversation with their manager more than a salary increase. The staff who said this probably meant a discussion that they find meaningful and motivating, not one that leaves them angry, frustrated and disillusioned. Simple skills make all the difference. Surely we don’t need World Bank funding to put this right. Or are we going to wait until we become just another developing country statistic?





About Cherri Holland

Fascinated with business, brains and how to use the brains on the payroll to make business buzz.
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