Companies around the world are competing for resources: raw materials, factory and office space, equipment, and outsourced companies. But among one of the most important resources is the human capital, or the employees and other people involved in the company’s operations. “Brain drain” is a term that describes educated, talented, or qualified individuals leaving an area in favor of somewhere else where they can get a higher standard of living from their skills.
Generally, this is used to describe people leaving their country for countries with better average salaries for their skills. In 2011, over half of Southeast Asian immigrants with university degrees who left for better counties were Filipinos, since there was a job shortage for qualified people. However, this can also be used to describe organizations and industries losing employees to a different organization or industry that pays relatively more. In 2018, the Republican House saw a brain drain when qualified members fit to run in the next elections either retired or opted to leave politics.
It’s an issue which affects the operations, profit, and success of any organization or country. However, why is brain drain a problem when issues of overpopulation and job shortages can pop up at the same time? And could brain drain affect the future of the workforce and how employers recruit and maintain their employees?
The Effects of Brain Drain
Due to brain drain, talent becomes scarce, more expensive, and hard to retain. When there are only a few skilled workers who can do a certain job, companies begin chasing the qualified individuals (and not the usual way of individuals applying for the company), causing high costs for the company. And while these workers can end up in your company, there’s the possibility they can be convinced to leave you and join another company with better perks.
As a result, the workforce becomes unstable. Instead of having people come to the company to apply, companies – and even the industries in a larger scale – are encouraging people to apply. Sometimes, they may have to lower their standards or higher more people to do the job of one person just to meet its necessary manpower to earn a profit. That’s why a country can be overpopulated and still experience a brain drain, because only a handful of people in the workforce carry the skills the position requires.
From the Classroom to the Workforce
In 2011, more than 690,000 students from all over the world came to the United States to receive an American college education. Out of all these students, 105,000 came from India while 128,000 came from China. And because they had to go through the different processes and fees that come with being a foreign student in the US, these students are some of the brightest in their country, earning over half the doctorates given in the country, especially in fields such as Math, Computer Science, and Engineering. The problem is – at least, for their home country – is that very little of these students ever decide to return home with the knowledge they have.
Living the American Dream
The United States is still associated with what is known as the “American Dream.” Along with other developed countries, it sees thousands of immigrants moving there in search of a better life and better salaries compared to what they would receive in their home country. According to CBS News, 92 percent of Chinese students and 81 percent of Indian students have stayed on in America to pursue a life there in 2011.
Some developing countries, for example, do not have the job opportunities for advanced engineering degrees because they do not have the facilities for it. So, instead of these highly-qualified people accepting lesser-paying jobs they are overqualified for, they choose to go abroad to countries that have use for their skills. However, their home country does not benefit from their skill. So, the rest of the world suffers a brain drain because all the brightest brains of their country end up in countries filled with the best.
Reverse Brain Drain
However, statistics are beginning to show a “reverse brain drain,” where more foreign students are choosing to take their degree and go back home. Events such as the 2001 terrorist attacks, changes in labor laws, economic growth in India and China, and the perception of foreigners in the United States are slowly pushing qualified people to go home. This has led to an eventual shortage, with less qualified people now in the market.
And given the 2018 Bloomberg statistics, it shows that the brain drain is continuing in several major US cities. Areas such as the Central Valley in California, Kankakee in Illinois, and Charleston in West Virginia are losing jobs and manpower in several industries such as agriculture, manufacturing, and mining.
Stopping the Brain Drain in the US
The United States currently has two options to cope with the lack of qualified individuals in technical industries: continue to put educational incentives and convince more students to attend college or rebuild its image to import talent from abroad.
Educational incentives may include reforming the way student loans work. The thought of being in debt for years for a college degree may be off-putting for middle-class Americans who cannot afford college on their own and choose not to attend to avoid huge debts. This, along with maintaining the country’s existing pool of qualified workers, may be key to decreasing the brain drain. However, focusing on only one of these two is not enough. The United States focus on issues such as education reforms, STEM programs, and updated technology to attract more people to work inside the country.
Given the economic developments in the United States and other countries, the US will have to continue to find ways to address the brain drain if we want to keep up and avoid losing our economic status in a competitive workforce. Given that we’re seeing less qualified people in highly technical industries, perhaps it’s time for both the educational system and the workforce to change the status quo.