How human capital flight bites deeper than financial exodus

LAHORE: Small firms are not scaling up according to their potential as top class brains in the market have either gone abroad or are well-entrenched in big corporations, forcing small entrepreneurs to pull on with relatively inferior workforce.

Many highly talented and educated entrepreneurs are aware of the benefits of operating through competent and professional workforce. However, following their employment and training, the second best hands leave their jobs to either go to abroad or find a better-paying job in the large corporate sector.

It is interesting to note even the big corporations complain of unavailability of highly competent individuals as the brilliant workers are picked up by recruiters from foreign countries or they find lucrative jobs overseas by applying online.

A senior executive of a large multinational company said, “We get the second best”. The uncertainty and regular ups and down in Pakistan’s economy have accelerated the brain drain. Three decades earlier the majority of this exodus was towards the Middle East countries led by the unskilled workers. These countries have largely graduated to next phase of development where skills are essential.

The immigration to the developed economies was earlier confined to doctors, engineers and PhDs. Chartered accountants seldom sought jobs overseas. In fact, many of the senior chartered accountants in the country obtained their certification from England and came back to serve their country. Late Salman Taseer and former finance Minister Ishaq Dar are two examples. Now even the chartered accountants are moving out of the country because of uncertain economic situation prevailing for over last three decades.

In late nineties another set of professionals belonging to information technology (IT) found that there are better opportunities for their skills in most economies outside Pakistan.

As the human resources in the developed economies acquired better skills they left a vacuum in the job markets for certified drivers, plumbers, and welders. As the experts in these fields move out they also leave the job to less competent workers.

It is under these circumstances that the big corporate sector filters out the best available talent in all fields and employs them, while the inferior leftover is available to small entrepreneurs.

It is worth noting that the small entrepreneurs offer fresh highly skilled talents the same pays and perks they get from big corporations. But they still prefer bigger companies to add value to their résumés and they can move out of the country on the strength of that experience.

The inability of smaller companies to attract best talent keeps their growth in check. This vicious circle is fully in force in Pakistan. This has also forced the small enterprises to stay away from professional management. They grow on the strength and ability of the talented individuals, who launched the start-up.

They certainly desire the people working for them should also be equally dedicated and competent. But since they have access to the human capital that is not the best, they therefore keep planning and decision-making to themselves.

The stress faced by qualified professionals like doctors, engineers, and IT experts in last two economically lopsided decades induced them to seek work outside.

This flight of human capital is more harmful than the flight of financial capital as it strips the country of potential nation builders. Every doctor that leaves this country leaves behind a vacuum that cannot be filled. Every IT expert that moves abroad reduces the potential of software exports from Pakistan.

The main reasons of jumping the ship are the absence of security, better livelihood, merit, and governance. Neighboring India faced similar problems in 1990s but managed to reverse the brain drain a decade back.

Now the number of qualified engineers leaving India is compensated to a large extent by repatriating (earlier) immigrant experts of the field. The change was triggered by accelerated growth, better governance, and merit-based opportunities in India.

Talented human resource likes to take up challenges. For a skilled individual, the choice between working in a dysfunctional domestic institution and working on the same issues at a relatively effective international institution is obvious and simple.

To retain its skilled workers, planners must start by reforming Pakistan’s institutions by combating corruption, improving institutions’ ability to implement reforms, increasing transparency so that workers’ skills can have an impact closer to their full potential.