I read with interest the recent Australian article titled ‘Overseas Students’ Costs Rise 166%’ (The Australian, 13/03/13). The article was citing a recent Boston Consulting Group report on the significant cost disadvantage that Australia now faces within the highly competitive international student market. For example, the annual costs for students living and studying in Australia are now significantly above the US and the UK, our traditional competitors.
What this article did not explore was the similar impact on Australia’s ability to attract high quality international academic and research talent. While for the last few years we have been watching the comparative value of remuneration packages increase in line with the stronger dollar, this has often ignored the rising costs of living in Australia.
As an Executive Search firm focused on the higher education sector, we have a number of examples of high calibre international academics who have rejected an Australian offer primarily due to the cost of living which is perceived to outstrip remunerative and non remunerative benefits.
Australia is now an extremely high cost destination. The Economist Intelligence Unit releases annual worldwide cost of living comparisons. In the recent 2013 report, it noted; “One of the features of the cost of living rankings over the last few years has been the rise of many Asian cities offsetting traditionally more expensive European locations. In particular, Australian cities have been rising very quickly up the rankings”. While a decade ago there were no Australian cities in the top 50 most expensive locations, in 2013 Sydney and Melbourne were in the top ten at numbers three and four respectively. Other Australian cities also rank highly: Perth at number 11, Brisbane at 13 and Adelaide as 16th most expensive.
Relatively high cost of goods and services, extremely high costs of housing and comparatively high interest rates all contribute. Furthermore, academics in countries such as the US and the UK often reside in relatively less expensive ‘university towns’ while in Australia many higher education and research institutions are located in more expensive capital cities.
So what does this mean for Australian universities going in search of offshore talent? First of all, acknowledge the challenge and set a strategy to counter it from the start (rather than at the time of offer). Is the potential candidate/s in a high cost stage of life (mortgage, school education, etc) which may make them more sensitive compared with younger or older academics?
Also, what are the other attractors that can be explored to counter the cost of living issues? What mechanisms does the university have to offer cost of living relief? These might be relatively minor when compared with the total cost of employment. Have you involved the candidate’s partner/family in the process to get the required buy in? Does the candidate understand the benefits of our superannuation system? We also find that the use of relocation agents early in the process can highlight to candidates less expensive but still attractive housing/location options and other ‘quality of life’ benefits.
Ultimately, the work done with candidates at early stages can go a long way to offset major shocks at the end stage of the recruitment process.