Organisations are finding creative solutions to recruitment, including hiring returned expats and remote employees, writes Adam Courtenay.
In June, listed online gaming company Esports Mogul said it would open up its CEO role up to locations beyond its home market of Melbourne to include the US west coast, all of Australia and APAC locations within reasonable time zone accessibility. Executive chair Gernot Abl says he has long been an advocate of face-to-face management, but the period of lockdown has reversed his opinion. On 6 August, the company announced the appointment of US-based former Disney executive Michael Rubinelli to the CEO position — just a week after it added former Spotify MD Kate Vale to the board.
“A year ago, I would never have even contemplated [hiring] a remote senior director,” says Abl. “Now I can’t think why I never thought of it before.”
Abl’s search for a “virtual” CEO closer to the heart of the world’s gaming industry is part of the new thinking among boards and management. Indeed, Abl says the notion of a distributed board of directors has become a central plank of his expansion plans. Esports Mogul, he believes, intends to put directors at strategic removes to each other, and by so doing, grow its network internationally, faster than would have normally been envisaged. In other words, COVID-19 has stepped up the pace of expansion. Distance is no longer considered a hindrance.
The company’s plans to scale and expand have been in motion for some time. In November last year Mogul brought in Cameron Adams — co-founder and chief product officer of design platform Canva — as a non-executive director. Adams’ experience in monetising digital products is almost legendary. He was behind Canva’s rise to a multibillion-dollar valuation with revenues in the hundreds of millions. His appointment was seen as an enormous boon for the relatively small gaming company.
Abl mentions that Adams was “holed” up in Tasmania for much of the initial COVID-19 lockdown and neither of them was able to conduct face-to-face meetings for about two months. But Adams’ remoteness, he affirms, had no effect on his input to the company. In Abl’s opinion, it probably enhanced it. “In no way did distance impact our interaction,” he says. “If anything, it moved a lot of our communications from email to Zoom, as we all embraced the use of video technology.”
Shaping a nation
49% of Australia’s population is either a first- or second-generation migrant.
46% of overseas-born residents in 2016 came from Australia’s top five migrant source countries (the UK, NZ, China, India, the Philippines).
11% of working-age migrants earn no income, compared to seven per cent of the overall working population, possibly reflecting the time it takes to acclimatise.
42% of skilled migrants earn $1250+ per week (top 30 per cent of incomes), compared with 20 per cent of Australian-born earners.
Source: Treasury Shaping a Nation report (2018)
One-off or future trend?
While few companies are yet to take the kind of leap Esports Mogul is taking with a remote CEO, there are clear signs that the corporate chain of command is in the throes of redesigning itself. Headquarters as a concept is no longer de rigeur.
Kate Harper GAICD, director of Vine Partners, which specialises in financial services, executive and board search, agrees the idea of remote leadership is possible, but remains sceptical as to whether it will be widespread and for all positions. “Distance leadership is not without challenges and depends on the sector and the business,” says Harper. “It doesn’t look like it’s happening in financial services, but it’s really early days and as we adapt our work practices, this could change.”
Harper says the employment of remote senior management is eminently possible, but sees it as viable only in certain roles. A CFO’s job, she says could be done remotely with the right technology as could the making of investment management decisions. Leaders of remote teams will need to demonstrate different leadership skills and workers will need to constantly upskill in technology to enable this remote work. “Leaders will need to develop expertise in managing a distributed team,” she says. “More attractive candidates will already have this experience and possess strong soft skills to enable them to develop relationships with the remote team.”
Harper thinks onboarding would take on a whole new dimension. “More time to build relationships with new employees will need to be invested up-front. The bottom line is always trust,” she says.
Chris Ashton, CEO of energy, chemicals and resources giant Worley, said in June that his company would never be the same as it was pre-COVID-19 and that cultural change in the company had advanced by “probably a decade” in a few months. Ashton believes the physical lockdown was the catalyst for a major restructure of the company, which would now look to shrink the number of offices around the world, slashing around $70m in costs by 2021. At least half the company’s 46,000 staff would be expected to work remotely part or all of the time in future.
Jon Tanner MAICD, group CEO and managing partner at executive search firm MitchelLake, who is based in Singapore, believes COVID-19 has created a democratisation of relationships at work that is unprecedented. “Quite often, you would have a bias that was geographical, with the dominant team gravitating to Melbourne or Sydney, where they get the most attention,” he says. “That’s no longer true.”
The offshoring of lower-paid jobs is hardly new, he says, but the offshoring of critical people, including C-Suite managers, skilled technicians and executives, is a radical departure from the norm.
“We believe it’s a missed opportunity to return to the ‘way things were’ once restrictions are lifted,” says Luke Speers, chief people officer at multinational media/digital marketing communications company Dentsu Aegis Network ANZ. “We needed to listen to our people and ask what they need and want. The time for leadership determining solutions in isolation is gone.”
Speers foresees most of his company’s roles being conducted remotely. “Some roles in our business, such as our creative teams, may need to come together to prepare for a client pitch or generate campaign content, but many of our teams have leaned into this new normal and embraced digital collaboration tools to help run virtual workshops.”
If people no longer need to move for senior opportunities and can choose locations and time zones that suit their lifestyles and family situations, the world might be everybody’s oyster when the pandemic disperses. But human relationships, which crave closer interaction, may suffer. “We used to joke about the ability to recruit from any location, including sitting on a beach,” says Speers. “Now that is potentially a reality when working in a virtual environment.”
Lessons for boards
Online esports business Esports Mogul may still be a fledgling ASX company, but it is already, by Australian standards at least, making a splash. In April, it announced Australia’s largest cash prize tournament for PC game Apex Legends — with a prize pool of $35,000.
The company offers gamers instant streaming, matchmaking and tournament building across the globe, but it is miniscule by global standards and keen to take a growing share of an industry estimated at about $224b worldwide.
Its wish to have a CEO in the heart of the US West Coast is about having someone in the right place to leverage the latest technology. Mogul also intends to locate another non-executive director in one of the Asian markets, where there is a greater customer base for gamers, fans’ teams, influencers and publishers.
“The more distributed the board and executive in alternate time zones, the longer the company’s reach,” says Abl. What will this mean for its directors? The big difference, says Abl, is that they always have to be “on”. Board and management have to be far more skilfully coordinated, ensuring the management of a globally distributed team works in synchronicity. Abl says he will be the main person coordinating it all, as he has been during the COVID-19 lockdown periods. “I have to be doubly conscious of time zones for the purposes of interaction, but it’s not just that. I have to be able to manage the speed of feedback expectations.”
The immigration debate
There’s little dispute that skills-based immigration has helped fill roles in industries experiencing high demand — and even had the beneficial effect of slowing the ageing of the country’s workforce. It has been estimated that the growing population in Australia has delivered about 1.5 percentage points per decade to annual GDP growth, allowing the economy to defy business cycle downturns.
In 2018, Australia abolished the 457 visa category, which allowed employers to sponsor skilled foreign talent to work in the country for up to four years, replacing it with the harder-to-get Temporary Skills Shortage visa that lets overseas workers come in on a temporary basis. Australian business commentators, especially in the startup and technology arenas, have watched the rise of companies such as Canva, Menulog and Atlassian gain scale, often built substantially on new immigrant endeavour.
Speaking on the cessation of 457 visas in 2018, Atlassian co-CEO Mike Cannon-Brookes told a Senate Select Committee on the Future of Work and Workers that the lack of access to experienced, global talent was “the single biggest factor constraining the growth of the technology industry in Australia”.
“Highly skilled, experienced migrants are job multipliers for Atlassian,” said Cannon-Brookes. “For every one senior person we import, we hire many more around them.”
The government has set the permanent skilled and family residency visa cap at 160,000 per year for 2020–23, but migration is expected to crash in the wake of the pandemic, with the federal Treasury predicting an 85 per cent drop in next year’s forecast intake of almost 270,000. International student numbers in February were more than 62,000 (34 per cent)down on the same period last year while temporary workers have been urged to return home. And Australia’s once bipartisan approach to liberal immigration is now being seriously questioned. There are calls to cut immigrant numbers, most recently from Kristina Keneally, the US-born opposition spokesman on immigration.
Deloitte Access Economics partner Chris Richardson believes the lack of new arrivals could cost the country as much as $50b in lost national income in 2020–21. COVID-19, it seems, has settled the immigration debate.
Or has it? COVID-19 has also exposed the lack of digital preparedness in some industries and workplaces, many of which have been in dire need of experienced leadership and skills in digital transformation.
The business community has had to scramble to adjust to remote working, living and interaction and in so doing, has accelerated remote and flexible working to a level of comfort which few had anticipated. Individuals, teams and organisations have had to find ways to function via online communication, productivity, logistics and collaboration tools. “Remote working will have a big impact on commercial property,” says Tanner. “Companies will feel less compelled to crowd thousands of staff into a central location.”
Could it be that COVID-19 has, by default, re-engineered management thinking? If a company needs expertise from distant locations that cannot be physically drafted in, why not use technology to draft it in virtually?
Tanner believes the traditional “mega” centralised offices will be replaced by smaller but better-distributed facilities with meeting rooms, professional virtual communication tools, hospitality, and functional spaces spread around cities to enable easier access to homes and suburbs and a reduction in commute times and traffic.
Selina Short, managing partner at EY Oceania Real Estate, Hospitality and Construction, and global lead for EY’s intelligent building working group, says some of her clients are thinking of developing a “Qantas Club” type arrangement, a membership style distributed network where workers can dip in and out of local offices as and when they need. Lendlease has something similar, she says, with “hubs” in Sydney’s Manly and Barangaroo reducing the commute for many. Short says what is happening is more than just a re-evaluation of space. Once the space changes, she says, behaviours will also. And the new shift in thinking is likely to be a democratising one. “When everyone is on Microsoft Teams, it’s very democratic,” says Short. “Even introverts get a chance. You can click the raise-the-hand icon. You can put a question or comment in a text box.”
Will more traditional companies follow the “distributed leadership” suit? Mitchell Taylor FAICD, of wine exporter Taylor Wines, says COVID-19 has simply consolidated what Australia’s internationally geared winemakers have been doing for some time. “We’re in a global market so you need to be close to your customers around the globe,” he says. “Leadership has to be dispersed to be close to different regions and hemispheres.”
Returning Australian expats provide a ready source of fresh talent and ideas.
Yasmin Allen FAICD, who chairs expatriate platform Advance.org, says there has been quite a move by many expats to return, not least because of Australia’s relatively low level of COVID-19 infection.
The Department of Foreign Affairs and Trade has indicated that of the one million Australians estimated to be living and working overseas at any one time, around 300,000 returned in the January to June period. While this might include those holidaying, studying, living and working around the world, it’s still a significant component of the Australian diaspora.
Some, of course, could not return for any number of reasons. As restrictions across the world increased, audience numbers and engagement at Advance.org’s global “town halls” and roundtables similarly rose. Expatriate leaders and members have been able to share their insights on any issue and across all sectors, says Allen.
“Certainly, global Australians are wanting to come home, but a report we recently introduced — They Still Call Australia Home — revealed it’s not as easy as hopping on a plane,” she says. “It is still hard for many of them unless their existing onshore networks are already strong.”
Of course “hopping on a plane” is no longer as easily achievable in the current pandemic-driven crisis, given international travel restrictions and border closures.
Also, without something to come home to, it is difficult. Allen says expats need established organisations, both in the private and public sectors, to be implementing transformation initiatives to draw on their skills. They need industry to be working with research and commercialising their inventions and innovation, and they need high-growth companies scaling globally. They also need startups in which they can invest or that need their mentoring.
Australia might be seen as being slower in building its strength in the new economy than Europe, the US and in some Asian countries, but Allen believes that’s changing. She says in addition to the obvious success of CSL, Australians have created Atlassian, Canva, Afterpay, Zip Co, Airwallex, OFX and emerging high-growth companies such as Coviu, Myriota, Gilmour Space Technologies and Everledger.
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