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Published 25 October 2012 04:08, Updated 25 October 2012 08:39
These days, local technology companies headhunting for top talent are targeting leadership positions at global social media brands rather than direct
reports like they may have done a few years ago, managing partner of recruitment firm MitchelLake (ranked 95 on the 2012 BRW Fast 100), Jon Tanner, says.
He reckons the extra power to pull in senior overseas talent is in large part due to the leverage gained by a strong Aussie dollar.
And in the technology segment, a senior appointment from the US or Europe can make a big difference to a local business, Tanner points out, because those companies are bringing in talent from a more mature market.
In fact, there has been such a stark shift in the leverage firms have to woo overseas talent, Tanner has even coined has a phrase for the phenomenon - “talent arbitrage”.
“Companies are no longer asking, ‘Who can we get?’ but ‘Who do we want?’,” Tanner says.
People who previously would have been coerced into considering a position for $700,000 are now tempted to take up the same position for $400,000, not only because of the strength of the currency but also the overall resilience of the economy, he says.
“The overall sentiment in Europe feels pretty bad, the slow recovery in the US is still playing out … it used to be that we sold Australia on the beaches and the lifestyle, now we are offering globally competitive salaries,” Tanner says.
The valuation of the Australian dollar has historically put companies at a disadvantage when it comes to vying for talent in the international arena.
The average rate against the US dollar since the Australian dollar floated in 1983 has been US75¢ and as recently as 2009, it traded at less than US65¢.
But with the Aussie dollar trading around parity with the US dollar and at times above, the historical disadvantage has finally become an advantage for local companies.
And the advantage might not be as short lived as many people think.
Despite expectations that the Australian dollar should begin sliding, it is maintaining its value and may remain in line with the US dollar well into 2013, according to National Australia Bank’s global co-head of foreign exchange strategy, Ray Atrill.
Attrill expects the Australian dollar to last through to the next year around the US97¢ mark, a far cry from the much lower historical levels many people have grown up with.
Attrill attributes the recent peaks (mid-last year it hit $US1.10 for the first time) and the relative resilience of the dollar to continued foreign investment in government bonds - 80 per cent of Treasury debt is now owned offshore - and diversification strategies of central banks.
As the greenback has proven less popular, the Aussie has become the unlikely alternative.
While the obvious impacts of a high Australian dollar is a boon for importers and a disadvantage for exporters, many companies are finding the effect can be felt both ways.
The managing director of Darling Irrigation (ranked 99), Sam Maroulis, has had some short-term gains from the strong Australian dollar.
The business recorded one of its best years last year when Maroulis was able to source a particular type of US-engineered irrigation equipment when the Australian dollar was at its peak.
He says he increased revenue in this part of his business from between $1.5 million and $2 million to about $5 million over a 12-month period, largely thanks to the Australian dollar spike. Overall, Darling Irrigation’s turnover is $24 million a year.
However, Maroulis foresees some negative effects if the dollar remains at its current levels. Most of his customers are net exporters – mainly cotton farmers and wheat farmers – and are already feeling the effect of a high Australian dollar. He has begun to move his company into developing pumps and dust settling equipment for the mining industry to diversify away from agriculture.
It is not the first time he has had to adjust his business to adapt to the effects of the broader economic environment. He previously serviced citrus farmers before tariffs on citrus produce were removed, lowering the price of imports.
However, Maroulis is aware that a strong dollar could have further negative effects on his customers and he may need to look elsewhere to further safeguard his business if it continues to trade at such high levels.
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