Employers battling through the ‘Great Resignation’ are now faced with the ‘Great Brain Drain’.

For small to medium businesses, adjustments need to be made to retain staff and increase productivity.

Linda Shearer, people experience lead at Xero Global, says there are several good ways to do this.

“We have a clear talent shortage at the moment. Inflation, the rising cost of living, and the borders opening pose challenges for business owners trying to retain staff. But, there are tried and tested ways we can meet those workforce challenges.”

Putting in place the right support systems

Firstly, employers should focus on the entire employee value proposition. This includes wellbeing and making sure people genuinely feel supported and taken care of in a proactive way, rather than reactively if they indicate they may leave.

Support systems should be tailored to the workforce and easy to access, Shearer says. Employees should be made aware of these support options, which can be inexpensive and help them with their workloads and career development. 

“We have the Xero Assistance Programme (XAP) that can be accessed by any Xero customer, for free counselling. This support extends to employees and their families, so that’s another avenue to find help.” The programme reaches more than one million Kiwis, and is a good example of a tool that helps employees to show up as their best selves

Ensuring workplaces are diverse

Secondly, businesses should ensure their culture and values prioritise and advocate for diversity and inclusion to ensure all people feel like they belong. 

“Culture and a good working environment are key reasons people will stay in an organisation.  Having a strong focus on creating an inclusive environment where people feel welcomed and supported will really make a difference.”

Linda Shearer, people experience lead at Xero Global.


Shearer points to a McKinsey study that showed people from diverse backgrounds, including women, working parents, people of colour and members of the LGBTQ+ community, struggled during the pandemic. 

However, the study also showed two in five companies strengthened their diversity programmes – even as they made cuts elsewhere – indicating the recognition of the positive impact of diverse workplaces on productivity. 

Offering flexible working conditions

Thirdly, Shearer says employees react well to being offered autonomy and flexibility around the way they work. 

“Flipping the traditional nine to five on its heels, embracing remote and part time working, and all the other arrangements that go alongside flexible working.”

The quick pivot two years ago to remote working caused a huge leap forward in both technology uptake and expectations that are unlikely to roll back as workplaces adjust to post-pandemic operation, Shearer says. “People changed their daily habits and technology caught up very quickly.”

The breadth of tools and technology to support virtual working environments means hybrid workplaces are expected to be commonplace. 

“I think most people appreciate the ability to work from home and the office. The amount of time people do that will of course depend on the individual and the role they do, but there’s a lot more flexibility and choice in how they work,” says Shearer. 

While working from home may not be possible for all businesses, there are still ways to support employees, for example, with flexible start and finish times. Depending on individual circumstances, employers could work with employees to find ways to adjust the work environment without majorly impacting the business.

Introducing new technology

Furthermore, workplaces should prioritise technology. While some firms have already been part of the major pivot towards embracing new technology, there are still many that have been slower to react.

“We're seeing more and more small businesses looking to adopt technology in response to omicron and new ways of working,” Shearer says. 

“About one in five are looking to invest in things like artificial intelligence and machine learning to automate more of the transactional jobs. Then, you can use humans for things only humans can do, or you can foster your employee’s skills in other roles.”

Countering the ‘Great Brain Drain’

As borders open and the ‘Great Brain Drain’ begins to hit New Zealand shores , there are ways to manage this challenge.

“Obviously, as borders open up, people will spread their wings and travel. But that same logic can also help attract people into New Zealand. A global talent pool is about to become available to New Zealand businesses.”

That said, Shearer says employers should explore the motivations of the workers they already have before these people leave – known as a “stay” interview.

“Is it because they want the ability to travel and base themselves somewhere in Europe where they can just scoot away for a weekend? Is it because they think they can command a higher salary? 

"Is it because they can feel they can expand their skills and get experience doing something they don't feel they can get in the role they're currently in?”

These conversations can help employers work out whether they might be able to offer a more satisfying career pathway that may command a higher salary, or help the employee gain the skills and experience they are seeking.

Small businesses, accountants and bookkeepers locally and across the world trust Xero with their numbers.