How to attract and retain skilled workers in New Zealand’s labour shortage
New Zealand businesses have been feeling pressure since the pandemic’s beginning to source, hire and retain skilled workers. In a recent report released by the Auckland Business Chamber, 57% of New Zealand businesses are experiencing skills shortages, record-high wage growth, employment levels, and demand for goods and services. New Zealand economist Brad Olsen says businesses should expect to feel the effects of skills shortages for at least two years as the country experiences its lowest population growth in three decades. These sentiments are echoed by BusinessNZ Chief Executive Kirk Hope. “There is no spare capacity in the labour market, and it has been made more acute by having our borders closed to immigration for so long. With borders now opening up, we also risk a net outflow of workers from New Zealand and an even bigger skills shortage crisis.” Although the New Zealand government have lifted immigration restrictions and COVID-19 regulations have eased, the Reserve Bank has warned that the shortages will continue for years to come. How to attract and retain New Zealand skilled workers in a labour shortage Skilled workers have typically always been more challenging to recruit regardless of market conditions because the pool of expertise can be limited. But every organisation needs a skilled workforce. Employing staff who are well-trained, knowledgeable in their roles and in your niche market, and able to adapt to changing working conditions are priceless assets to your business. They foster innovation and creativity, require less leading and training and promote growth. Because there is such high demand for skilled workers, they can also be difficult to replace. To have the best chance of securing and retaining skilled workers in a challenging candidate-driven market in New Zealand, international businesses must understand what’s making skilled workers leave their roles in the first place. Understand why do skilled workers leave in the first place? Losing skilled workers hurts, not only because they’re valued team members but also because they can be very challenging (and expensive) to replace. One study from SEEK found that the top reason workers left their job was that they didn’t like their bosses. Another study found that 70% of workers won’t leave a job if they feel engaged in their role. Your top performers naturally want to achieve and feel like they’re making a difference both professionally and for the company. Skilled workers might look for other roles if they feel their expectations aren’t being met, they’re bored or aren’t able to use their skills and experience at their full potential, they don’t feel valued, or there is simply not enough autonomy. Consider what skilled workers value in a workplace TradeMe’s Job Hunter Survey found that the most important factors in a workplace were: Job security: 58%. Work/life balance: 57%. Feeling valued: 54%. Development opportunities: 49%. Finding a company that’s a ‘good fit’: 49%. Their day-to-day duties: 48%. When developing your job descriptions for New Zealand workers, consider all the essential aspects they’re looking for in recruiting companies. Although salary didn’t make the above list, skilled workers generally get paid more than the average professional. You’ll probably find that skilled workers will set their expectations on what an ideal salary is according to industry benchmarks and their experience level. Keep this in mind when developing your role descriptions, and consider offering a negotiable salary. Work with your skilled workers to ensure they achieve optimal work-life balance Making a genuine effort by sitting down with your skilled workers to develop a tailored work-life balance plan will ensure they feel heard. One way of doing this is by offering hybrid working-from-home arrangements. Although almost 90% of workers want to work partly or entirely from home in a post-pandemic world, one-third of New Zealand employers want their workers back in the office full-time. In a candidate-driven market, employers must listen to the values of their staff when it comes to work-life balance to keep them as content as possible. Focus on career development A recent study by Microsoft’s latest Work Trend Index found that two-thirds of workers said they were unable to stay at a company for long if the company didn’t offer opportunities to grow and develop in their roles. Make it clear to your skilled workers that there is a path to develop their role in the business by exposing them to different functions and offering them more responsibilities. One way of doing this is to work with each employee on a personal development plan. Start by visualising their ultimate goal. What are their specialisations? What diverse skills can they use in other functions of the business? Then, work out what their core career goals are. What do these goals look like? And how are you going to help them get there? They might be a content writer who wants to branch out into UX/product writing. Or, they could be a civil engineer who wants to take on more leadership responsibilities. Keep it future-focused; how do they want their current strengths and areas for development to look in five years’ time? And set up monthly meetings to monitor the progress of each growth milestone. Consider remuneration strategies Remembering that skilled workers typically get paid more than the average professional and that salaries can often fluctuate with market conditions, you can take several steps to attract and retain skilled workers for several remuneration strategies Short-term incentives Cash bonuses and pay increases are simple to execute and can be flexible, providing you have the capital. However, consider that bonuses are subject to tax at your employees’ marginal rate and there are added costs such as payroll tax and WorkCover. All things considered, bonuses increase job satisfaction for workers because they feel their efforts are being recognised. Salary packaging Salary packaging is a concept whereby employees accept certain benefits – car allowances, computers, gym memberships, health insurance – in return for a marginally lower salary. Because of the concessional tax treatment of some benefits, employees can be in a better after-tax position by
Workplace drug and alcohol testing in New Zealand
Drug and alcohol impairment are among the leading causes of workplace injury, fatalities and absenteeism. Like most western countries, New Zealand companies implement drug and alcohol testing at their workplace to ensure business run safely and productively. The employer must work collaboratively with their employees to prevent and mitigate the risk of drug and alcohol use in the workplace instead of focusing on reactive punishment. Are companies legally obligated to perform workplace drug and alcohol testing? No. An employer may only require their employees to test their workers if it was stipulated in the employment contract/agreement. Although companies are bound by law to ensure they offer a safe place for their workers to conduct work, they’re not legally obligated to test them for drug and alcohol impairment. However, it goes without saying that employers should provide the highest level of care and protection for all employees. Pre-employment drug and alcohol testing In high-risk workplaces, such as commercial construction sites or where heavy machinery is operated, employers might opt to run drug and alcohol tests for candidates before offering them a position. This can achieve two things; it communicates to all potential employees that the company takes drug and alcohol impairment in the workplace seriously and ensures the candidates they move through the interview process have safe attitudes towards their work. If you wish to perform pre-employment tests on candidates in New Zealand, then stating it clearly in the job description means they’re fully aware of what to expect when the time comes. What occupations are usually targeted for drug and alcohol testing? Industries that are more likely to conduct drug and alcohol testing in New Zealand workplaces are those that are high-risk or in safety-critical workplaces. · Health care and medical · Transportation · Manufacturing · Construction · Defence · Education · Private security Things to consider before drug and alcohol testing your New Zealand employees: Safety: if a drug and alcohol test could identify the impairment of an employee, which would then result in significant risk mitigation by eliminating that employee from the workplace and subsequent injury, then regular drug and alcohol testing may be suited. Rights: It’s important to consider the rights of all New Zealand employees, as outlined in the Privacy Act 2020, the Human Rights Act 1993(external link) and the New Zealand Bill of Rights Act 1990, to ensure such testing does not infringe upon their rights. Mutual agreement: if policies were developed, explained in detail, and agreed upon by the employee upon signing their employment contract, then it’s reasonable to request drug and alcohol testing. However, the language you use around this policy must be carefully considered with the help of your legal team. You can find a draft clause in the employment agreement builder for New Zealand here. Before requiring a drug and alcohol test from your employee, you might consider how fair a request it is. Does the request adhere to the drug and alcohol policy outlined in your worker’s employment contract? Do you have reason to believe the employee was impaired at work? I.e. were they or someone else injured due to their perceived negligence? Do they have a history of behaving negligently? What happens if a drug and alcohol test results in a positive reading? You must adhere to the guidelines stipulated in the relevant policy and in the employee’s employment contract if a drug and alcohol test returns a positive reading. This process will involve discussing the results with your employee in a private environment and may involve requesting a retest to ensure the initial reading was accurate. Even though a positive test doesn’t mean an employee was noticeably impaired at work or that their behaviour has risked the safety of those around them, it gives the employer tangible evidence that the employee is guilty of misconduct. It’s up to the discretion of the employer if they wish to terminate the employment of the worker upon receiving a positive result. Types of drug and alcohol testing Standard drug and alcohol tests will screen for common drugs like methamphetamine, cannabis, cocaine, opiates, heroin and alcohol. There are various procedures for workplace drug testing in New Zealand, from the most commonly used method of urine (can trace drugs and alcohol for up to 24 hours) and saliva (detects drug and alcohol use within 12 hours) to hair (detects certain drugs for up to 90 days). A common test for alcohol use, standard breath testing can detect alcohol for up to 24 hours. What organisations conduct workplace drug and alcohol testing in New Zealand? There are many reputable third-party organisations that can facilitate safe and secure drug and alcohol testing in your New Zealand workplace, should the need arise. Drug Testing Services in New Zealand specialises in workplace testing, namely urine screening, breath testing and hair follicle testing. Resultz is another leading provider of workplace testing in New Zealand, offering saliva tests, hair strand tests, urine drug tests and alcohol breath testing. ESR’s laboratories provide extensive urine testing services for the New Zealand police force, customs and immigration and many other organisations. Unfortunately, in many cases, employee testing is the only reliable solution to minimising the risks associated with drug and alcohol-related injury in New Zealand workplaces. A good drug and alcohol policy can be a valuable tool to help maintain optimal health and safety within your workplace. For advice on how to implement a thorough and fair policy when hiring workers in New Zealand, contact ANZPEO.
How to negotiate working from home with your employer
Working-from-home entitlements have historically only been afforded to senior-level executives and company top performers. Lower-level executives had rarely bothered to negotiate working from home with their employer. As the pandemic struck, businesses worldwide had no choice but to enforce working-from-home rules for every employee within the business. Although lockdowns have ended, priorities of work-life balance have remained. More and more, skilled professionals are adding hybrid or fully-remote working entitlements as their pre-requisite for employment. How working life has changed since covid Prior to the pandemic, the rate at which Australian workers were working from home was increasing by about one percentage point every two years. Come August 2021, the figure had climbed by 8.4% to 40.6%. Around two-thirds of those working from home were managers and professionals. The data from New Zealand looks a little different. One report from the New Zealand Journal of Employment Relations found that the pandemic resulted in an estimated 29% of workers conducting full-time work from home. Why do people want to work from home more? There is little wonder why more and more professionals wish to work from home; aside from added flexibility and the promise of increased productivity, many argue working from home gives them more time back in their day to do the things they love. For example, take a fitness class, pick their kids up from school or do the grocery run during their lunch hour. They can manage their time more effectively and live a more balanced life. One study conducted by Cisco in early 2022 found that the ability to work from anywhere has made 8 out of 10 New Zealand professionals happier. Over 60% say their productivity has increased, and almost 80% claim to save money, with an average annual savings estimate of $13,000. Why do managers fear the great working-from-home revolution? There are pros and cons to a remote or hybrid working plan. For one, the impact virtual meetings have on collaboration means working together to solve problems, and on projects collectively can be more difficult. Some managers with traditional views believe working out of the office inhibits productivity, even though all signs point to the opposite. They think not having their teams at arm’s length means they have less control over them or can’t keep tabs on them (yes, I’m talking about the micromanagers). The problem with these views is that the focus moves away from results to the quantity of time spent at a desk. As long as they can see their teams physically in front of them 40 hours a week, they appear to be getting their work done, according to some managers. This just isn’t the case. How to negotiate working from home with your employer If you work, or have recently been offered a role at a company that does not offer remote working conditions with their employees, and you wish to change that, then your first port of call is to build a case for it. 1. Outline how working from home will benefit you and the company Your first step in working out how to negotiate working from home with your employer: creating a mutually beneficial plan for both employer and employee? Document how allowing you or a number of staff members to work from home will benefit them. They’d be able to reduce in-office costs (electricity, facilities, space etc.), there would be improvements in their employees’ mental health, and staff will be more inclined to work extra hours in the time they save commuting to and from work. Then outline how you will specifically benefit from working from home. Will you be more productive? Would you be willing to start earlier due to the lack of commute? How will your mental health benefit? Document these benefits clearly and present them to your manager as part of your proposal. 2. Present the evidence Countless online studies address the benefits of working from home for employees. When putting together a proposal, strengthen your case by outlining the evidence. Some great resources include stats.nz, PWC and Statista. 3. Explain clearly how your home office will be set up Managers don’t want to hear their employees are hunched over a 15-inch laptop at their dining table, surrounded by baskets of washing and screaming children. This environment isn’t productive for anyone. Make sure they know exactly how you plan on setting up your office. Ensure that you have a dedicated desk in a quiet space with a fixed monitor, keyboard and mouse. The area will be away from the distractions of everyday life and structured with ergonomics in mind. Paint as clear a picture as possible when describing your proposed office set-up to your employer can visualise how you plan to maintain productivity. 4. Outline how you propose maintaining clear and consistent communication with all employees throughout the day. Historically, employers have dismissed working-from-home plans as companies didn’t have the means to ensure their employees could communicate with the teams effectively. Today, corporate messaging and project management platforms like Slack and Asana make for seamless employee collaboration and communication. Both are very effective forms of communication. However, many managers will be hesitant to implement them company-wide if you’re the only employee in the company who will be working from home. Standard email communication between employees may be the most effective option if this is the case. To give your manager the confidence that you’ll be productive at home, make a promise to issue them a list of all the projects you’re working on at the conclusion of the working day. Clearly define what you achieved that day, what you’re having trouble or need assistance with, what projects you plan to work on for the remainder of the week, and so on. 5. Suggest a trial of the new remote or hybrid set-up To prove that the concept of working from home will be advantageous for all employees involved, suggest a one-month trial in your new proposed environment. During this month, document every area you believe works and those that need improvement.
The office evolution in New Zealand
The modern office; what’s ‘normal’ in 2022? Things were already evolving but the pandemic fast-tracked changes to the way we live and work, in particular when it comes to offices and business headquarters. Being forced to stay home highlighted the fact that many people can now work from anywhere. Home offices and hybrid working are the new normal, and employers must embrace the change if they want to attract and retain the best people. These are the three most significant factors in the office evolution Working from home It’s well known that many New Zealanders were forced to switch to working from home throughout the pandemic. At one point, data from Stats NZ showed that more than 40 per cent of New Zealanders were logging into work from their living rooms, bedrooms and home offices. Lockdowns and quarantine measures forced many New Zealand employers to figure out how their team could stay safe at home and still get their work done. The result was a decisive shift to video calls and online chat. While working from home isn’t possible for everyone, and some people struggle with the lack of in-person interactions, this way of working can be a win for employers. One study, by Stanford University, of 16,000 workers over 9 months found that working from home increased productivity by 13%. The interesting caveat of the study was that it didn’t factor in people working from home with their children around (which fortunately is now less of an issue) and it had people showing up to an office once a week (more on that shortly). The hybrid worker Meeting in the middle of WFH and WFA is the hybrid workplace. Hybrid workers work both at the office and from home — general three days in one and two in the other. Companies are setting mandatory days so people can get together in person, collaborate and get back to the traditional office ‘watercooler’. They are also appreciating the value in freeing people from their regular commute. Hybrid work has placed different expectations on the modern office. All of a sudden, coming to work is an experience to look forward to. Companies are adapting by creating smaller but more flexible office environments (with hot desks and lockers, for example) and by introducing incentives like free lunches on the days when people are physically present. The Stanford report shared that In-person collaboration is necessary for creativity and innovation. The researcher found that face-to-face meetings are still essential for developing new ideas and keeping staff motivated and focused. With this in mind, creating the opportunity for regular in-person gatherings, even for WFA employees, should be kept in mind. COVID-19 safety The final factor in the new office is the still-present threat of COVID outbreaks in New Zealand. The pandemic is not yet entirely over, and the future remains uncertain. Modern offices provide hand sanitiser, protective barriers and opportunities for social distancing. When outbreaks occur, there are policies in place to enable people to quickly shift back to working from home, particularly if they have health issues that put them in a high-risk category. If you do business in New Zealand, keep an eye on the COVID-19 protection framework for updates about COVID control at work. Is the office dead? The short answer is, no. According to the Royal Institution of Chartered Surveyors, more than three-quarters of 78% of survey participants report seeing re-purposing of office space, but still view the office as essential for a company to operate successfully. RICS.org also stated that, “As countries learn to live with COVID, 80% of respondents in New Zealand still believe an office is essential for a company to successfully operate. However, 85% of contributors report that they are seeing an increase in demand for more flexible and local workspaces.” This points back to the office evolving but still being very much a part of our lives. Want to figure out the right office solution for your business in New Zealand? Talk to ANZPEO today.
How New Zealand is solving the labour shortage crisis
New Zealand is experiencing a labour shortage in 2022. With unemployment figures sitting at near record lows, finding skilled staff can be challenging. However, there are always solutions. Have a look at what is causing skilled worker shortages and some ways business and the government are working around the problem. Why is it hard to hire staff in New Zealand right now? Most of the factors contributing to the skills shortage are down to COVID-19. Among the problems the pandemic caused are: – More people leaving NZ than entering (As shared by The Guardian, The latest data from Stats NZ found that in the year to March, annual net migration was negative, with 7,300 more people leaving than entering). – Low immigration from overseas, including international students and skilled workers – Difficulty in movement due to lockdowns and restrictions – Overseas employers offering higher pay The end of lockdowns and travel restrictions has also led to many skilled New Zealanders packing their bags and heading overseas. Add to these the ageing population, and it is no wonder that quality workers are hard to find. In New Zealand, almost every sector is being hit hard by the labour shortage with sectors that rely on seasonal workers perhaps suffering the most. As reported by the ABC in Australia, New Zealand Dairy farmer and Federated Farmers spokesman Richard McIntyre said his industry had been short staffed for a year. Solving the problem of labour shortages in New Zealand Operating a business means solving problems on a daily basis. Overcoming labour shortage issues can be mitigated with some or all of the following ideas: Recruit from overseas COVID-19 made life difficult for a few years but borders are opening back up and the option of welcoming overseas workers is open to employers once more. As an employer, you can investigate sponsoring overseas talent for work visas, or advertise to attract young people who are on working holiday or student visas. In Australia, for instance, some hospitality companies are taking drastic steps to appeal to staff, including offering free flights and $1000 vouchers. In New Zealand, The Government is making a raft of changes to the immigration system as part of an “immigration rebalance” that it says will fill skills shortages and fuel the economy after the pandemic closed borders. The Rebalance has been designed to make it easier to attract and hire high-skilled migrants, while supporting some sectors to transition to more productive and resilient ways of operating, instead of relying on lower-skilled migrant workers. It will also include a new Accredited Employer Work Visa system. Implemented in July, this scheme aims to make it easier for employers to prove no New Zealanders are available to fill their vacancy. Hire young people The unemployment rate might be very low, but statistics can be deceiving. For example, the unemployment rate among young people is more than twice that of the older population in New Zealand. Young people are always looking for work, and even now, there is no exception. Some companies hesitate to bring on younger workers because of their lack of experience and perceived lack of enthusiasm. However, everyone has to start somewhere. You can soon fill your staffing needs by hiring young people and implementing training programs. The training may be a little extra investment in terms of money and time but the payout is loyalty and a more capable workforce. In New Zealand, there are incentives for companies that hire and train workers. Do a little research, and you might find your company eligible for a grant to help bring newcomers up to speed. Leverage technology Hiring new staff isn’t always the only way to fill vacancies in the modern world. Modern technology is constantly creating ways to take care of repetitive tasks so individual productivity can be improved. If your business is very paper-heavy, there may be ways to improve efficiency so you can do away with the need for additional headcount. The other way to leverage the digital world is to make the most of the gig economy. If full-time staff are too hard to find, look online for freelancers or use services like Upwork or Fiverr to have jobs completed without the need to pay someone full-time. Reset client and customer expectations It is important to communicate with your customers and clients while you fill the gaps in your team. Most people will understand if things are taking longer than they used to, especially if you are transparent about the situation. Hire staff in New Zealand with the help of a local PEO The bottom line is that if you need to hire staff in New Zealand, there are ways around the labour shortage. When you engage the services of a reliable and responsive locally based PEO, you can connect with the best recruitment firms and onboard new talent sooner. Need help finding and keeping good workers in New Zealand? Speak to ANZPEO today.
Top recruitment tips during a labour shortage in New Zealand
Overcome New Zealand’s labour shortage It’s no secret that there is a shortage of good workers in New Zealand right now. Unemployment is hitting near record lows, with Stats NZ recording a drop to 3.3% in June. While high employment is good for the nation for many reasons, it means finding skilled and productive staff can be difficult. So what do you do to ensure that your workplace is both a magnet for high-quality workers and a haven for your current people? Let’s start with attracting employees. Beat labour shortages in New Zealand You want potential employees to see your company as a desirable workplace so there are plenty of responses to your job advertisements. Here are some ways you can do that: Marketing Many businesses now apply a marketing strategy to attract talent. An easy place to start is with a careers page, which will highlight the many reasons to work for your organisation and give people an easy way to send through their details. Your careers page can have videos promoting your workplace and even blog posts about what it’s like to work there. Don’t be afraid to add some personality so your company stands out. List the benefits people receive when working with you such as rostered days off, subsidised healthcare or regular team gatherings. Pay competitive salaries At the end of the day, money talks. If you can offer above average wages you will be able to attract more applicants and have more flexibility around who you choose. Offer perks Other perks in addition to a competitive salary will put your business ahead of the competition. – Working from Home Allowance: Over the past few years it has become more commonplace for some sectors in the workforce to work remotely from home. You may consider paying your workers a Working from Home Allowance to cover costs such as electricity and internet cost. – Food: There’s nothing better than a free lunch. Even if it’s only once a month, a free lunch can be an excellent motivator and a way to develop camaraderie across your team. – Health insurance: In the USA, many companies include health insurance as part of their package but it is not the same in New Zealand. However, offering a monthly health insurance rebate of $100-$200 can be an appealing perk. – Flexible hours: Staggered start times can make a big difference to people’s schedules and stress levels. It’s easy to set a window for start times, e.g. between 7:30 am and 10 am, so long as people work their standard 7.5-8 hours per day. Retention Of course, to reduce the need to hire, you need a strategy to hold onto your existing team. What’s most important is creating a place people enjoy showing up to, whether virtually or in person. Workplace culture Culture exists at every workplace and can be tricky to define but when you get it right you have fast-moving teams who get more done with less effort. One way to guide culture is to have clear values and to share them as part of the hiring and onboarding process. When challenging behaviours arise, you can refer people back to the company values and have constructive conversations. People work better together when they have a sense of kinship and belonging. Hosting regular catch ups and events is a great way to foster a stronger team. If you have people working remotely, consider some online games and activities. Be free with your feedback Staff work better when they know where they stand. Frequent, constructive feedback can help your employees improve while also letting them know they are noticed and valued. Scheduling regular catch-ups also allows them to raise any concerns, frustrations or issues. Build your social and environmental conscience Studies have found employees and in particular the younger generation will hesitate to accept a job if their employee doesn’t have a strong Corporate Social Responsibility (CSR) policy, and 83% would be more loyal to a company that helps them contribute to social and environmental issues. CSR means actively contributing to the community and taking steps to minimise waste and build a more sustainable future. Some studies have even found the youngest workers prioritise purpose over salary. Focusing on improving your business in this area can help to attract ‘bright young things’ and build their loyalty. Pay attention to what is being called the ‘Great Rethink’. According to Harvard Business Review, this has people asking, “Do we really like our employers’ culture? Do we feel that we’re fairly treated and have the advancement opportunities we want? Most profoundly, does our work feel as meaningful as we’d like it to?” If the people working for your brand can answer yes to these questions and if you can prove to new employees that they will feel great about working for you, you stand to gain from a shift in workplace mindsets. Want more information about how to quickly fill staff vacancies in New Zealand? Talk to ANZPEO.
Tackling pay raise requests in New Zealand in 2022 and 2023
Pay raises in New Zealand Inflation has hit hard in New Zealand this year, with costs jumping for essential items like food, fuel and energy/home heating. With expenses increasing across the board, companies that pay staff in New Zealand may find staff begin to ask about pay raises. There are different ways to handle this question without increasing the risk of losing good people. When are staff entitled to a pay raise? When you pay staff in New Zealand, it is generally left entirely to the employer’s discretion as to when staff receive a pay raise. Pay raises usually depend, on three factors: 1. Contract conditions: Sometimes, a staff member’s contract stipulates that they are entitled to a raise when they meet specific requirements. If they meet these conditions, as an employer you must implement a pay raise. 2. Workplace policy: In other cases, the conditions will sit under a company policy rather than an individual contract. Savvy staff will be aware of your company’s policies and employee agreements and there should always be someone on your team who is across this area. Many New Zealand companies grant staff a pay raise at the beginning of the financial year (which falls on April 1st). The amount of the raise will usually match the rise in CPI —for example, over the twelve months to the April 2022 quarter, the CPI rose 7.3%. Another way to pay staff in New Zealand is according to staff members’ key performance indicators (KPI) over the year. A raise may be between two and five per cent, depending on performance. This system may be set up to rotate or follow a ‘scale’ so not all staff members receive a raise at the same time. Negotiating pay raises A staff member may come to you asking for a pay raise at any time. Unless it is related to any factor above, when you pay staff in New Zealand, you are not obliged to grant them a raise. If you can’t increase their pay, there are other strategies you can put in place to help them work towards a higher salary: – Help them to upskill: Explain to your employee they are not entitled to a raise at this time but walk them through ways they can increase their skills so they can increase the value they offer to the business in the future. There may be an opportunity for them to access training within the business or they may decide to seek further education independently. – Talk about promotion: Allowing an employee a pay raise may soon mean you are inundated with other employees asking for similar treatment. You may decide to discuss having them work towards a promotion instead. – Negotiate a raise: Maybe you can afford to give them a raise but not as much as they are asking for. Do some negotiating, and you might be able to find a compromise that works for both you and your staff member. What to do if you can’t afford a pay raise It’s difficult to give your staff raises when so many other business costs are increasing and profit margins are dwindling. If offering more money is absolutely off the table, there may be other ways to add value to the workplace experience. Consider exploring: – Flexible working hours – Working from home options – Staff discounts – Novated car leases (where the employee salary sacrifices their car payments in order to reduce the amount of tax they pay – Real-time payments (access to pay each day rather than fortnightly or monthly for a small fee) – Equity (or company shares) – Incentives like weekly free lunches or Friday drinks – Subsidised childcare – Subsidised health insurance (most New Zealand businesses do not pay for health insurance) or gym memberships At this point in time, what’s most important is to be clear and honest in your communication. People always have the right to ask for a pay raise and you have the right to reject the request but there are ways to do so without impacting the relationship. Want help in understanding how pay raises work for staff in New Zealand? Talk to ANZPEO today.
COVID surge: Should your team be working from home?
Unfortunately, COVID has made a comeback in New Zealand, with cases rising to several thousand per day across most parts of the country. Hospitalisations are starting to fall in New Zealand as the second Omicron wave comes to an end. All the same, lots of people are coming down with influenza, which is expected to continue circulating through to the end of winter. As a result, people are starting to feel wary about travelling on public transport and being in crowded environments again. This has put working from home back on the agenda. COVID in New Zealand Mask usage around New Zealand currently appears to be on and off. While schools were advised to implement face mask use when term three began, many workplaces are making their own decisions. To share an example of what corporate brands are doing, Apple has decided to allow corporate staff to work without masks if they choose, and many city mayors are leaving mask usage up to personal choice. Despite the general relaxation, the Arden government still heavily endorses the use of masks in accordance with their traffic light system. As for working from home, the general consensus is that hybrid working is becoming a new norm. In New Zealand, employees are entitled to request to work from home. They must submit the request in writing but do not have to state the reason for the request. New Zealand employers, on the other hand, have to have a reasonable explanation for denying a work-from-home request. Some parties, however, would like to see a return to the workplace. Auckland’s Chamber of Commerce chief executive Michael Barnett, for instance, worries about the situation of retailers and food service providers in Aukland’s business centre. He says, “Probably the best thing that could happen in the city right now is if government and government agencies all brought their people back. Government is the largest employer, so if they brought their people back, that would make a difference to what is happening in the centre of Auckland.” The choice is yours New Zealand Prime Minister Jacinda Ardern is yet to issue a firm directive around working from home or mask mandates in New Zealand workplaces. Ardern has had more to say on mask usage in school recently than in the workplace. She was quoted as saying, “Ultimately here we have said we are not making it compulsory but we are strongly encouraging use.” With the traffic light system set to orange though, outside of the mandated areas such as public transport and indoor retail spaces, the choice is up to the employer. As a company that employs New Zealanders, it is up to executives and team members to decide what’s best for people and what’s possible. When it comes to vaccines and boosters, some workers still need to be vaccinated but it does depend on the work they do and their workplace. You can see more information about mandatory vaccination in New Zealand here. Along with working from home and asking people to wear masks, the other thing to consider is allowing staff time off work so they can go and get a booster shot. Finally, as a business, you still have to accommodate isolation rules for those who do test positive for COVID. Under current guidelines, someone who tests positive must stay at home for at least seven days or until they have no symptoms. According to Employment New Zealand, employees are entitled to a reasonable time away from work for vaccinations and that includes booster shots. You’ll find information about the current orders for people who test positive for COVID here. When in doubt… If you’re unclear about how to respond to New Zealand’s current COVID outlook, you can always speak with your PEO. We are always up to date with the latest news, mandates and recommendations. Need to get in touch with a PEO in New Zealand? Contact ANZPEO today.
Umbrella companies vs. PEOs in New Zealand
When you’re establishing a business and hiring a team in New Zealand, there are a few options when it comes to recruiting, onboarding and paying your workers. It can be confusing to know which services are right for your business. Some employers mistakenly think they need to use an umbrella company. Here is some info about what an umbrella company is and why it’s not a good long term solution when you are building a team of employees in New Zealand. What is an umbrella company? An umbrella company is used to support contract workers only. It is a third party company that acts as a go-between for a business and the contractors it employs. Here’s an example: ‘Sam’ is a contractor who is offered a short term contract with ‘A Large Company’. ‘UmbrellaCo’ is the umbrella company that acts on behalf of A Large Company and Sam. Once Sam has signed a contract and started working, UmbrellaCo invoices A Large Company to collect Sam’s pay. It then pays Sam after taking out the necessary tax and superannuation payments. A Large Company pays a fee to UmbrellaCo for its services. Many contractors and freelancers use umbrella companies because it helps them to receive a regular income without having to worry about putting aside the right amount of money for tax and superannuation. They’ll have a record of the hours they work and receive a tax certificate at the end of the financial year so they are similar to what’s known as a PAYG employee in New Zealand. If you only need contractors in New Zealand for short term roles, you may decide to use an umbrella company. However, its services are very limited. You won’t have the option to hire full-time or part-time employees through an umbrella company. What’s more, hiring contractors can be complicated in New Zealand. You don’t want to inadvertently break the rules because you aren’t clear on the difference between a contractor and a permanent employee. What is a PEO in New Zealand? A PEO is your company’s representative when it comes to hiring and paying your team. In addition to ensuring workers are paid and their tax is withheld, your PEO can help with recruitment, insurance and human resources. When you hire people in New Zealand with the help of a local PEO, you will have someone close by who can interact with people by performing HR as well as payroll duties such as paying tax and other requirements. A PEO in New Zealand doesn’t set tasks or KPIs for your workers. It isn’t involved with their daily activities but it acts as a stand-in ‘entity’, saving your company from the cost of establishing an entity itself. Ready to hire in New Zealand? PEOs make more sense An umbrella company employs freelancers or contractors who work on temporary assignments or contracts. For the duration of their time with the business, the worker becomes like an employee of the umbrella company. Communication is often automated and it can sometimes be difficult for workers to get hold of people. As mentioned, an umbrella company has a limited offering and only serves to pay workers. It is also likely to be connected to a specific recruitment agency, meaning you have less flexibility when it comes to deciding who to use for hiring purposes. A PEO and an umbrella company will both deduct PAYE tax from pay and issue payslips. Both will also help your company to pay your workers correctly and not mistakenly miscategorise a contractor as a permanent employee and vice versa. The added advantage of a country-specific PEO is that it provides a suitable ‘package’ solution for overseas companies that want to build a team in New Zealand. It can assume the responsibility of an employer, rather than simply handling wages, which gives your team a more well-rounded experience and helps to improve engagement. Your PEO also acts as your entity in New Zealand, saving you money and allowing you to rapidly build a talented team. Want to know more about hiring in New Zealand? Talk to ANZPEO today.
Hiring in New Zealand Local PEO vs International PEO
When your company is looking to expand into the New Zealand market, if you want to be able to hire people without an entity, you need to work with a PEO (Professional Employer Organisation). This allows you to establish an international presence without the time and expense of setting up a company. One of the decisions you need to make is whether you choose an international PEO or work with an organisation that is New Zealand specific. Here is some information to help you make a decision: Your PEO options explained If you have never worked with a PEO before, the terminology can take some time to be familiar with. – An international PEO is based in one country but operates in a number of different regions. When you use an international PEO, it won’t have an established entity in the country where you wish to hire people but will instead rely on a local PEO itself. – A local or domestic PEO is based in the country where you wish to hire employees. It acts as the Employer of Record and has the advantage of an on-the-ground presence. What does a ANZPEO do? Whether you are working with an international PEO or a PEO that is specific to New Zealand, the provider will help you to decide how much to pay them, find and hire staff, figure out how much to pay them and pay them accordingly. It will support you with insurance, legal & training requirements, human resources and payroll services, while your management team takes responsibility for assigning daily tasks, setting KPIs and inducting the employee into your company culture. Your PEO takes on the legal responsibility for employing people in New Zealand, acting as an on-the-ground extension of your business. Why use an international PEO? There is really only one advantage to using an international PEO, and this is if your business is rapidly expanding into a number of new markets at once. It may make sense to choose an international PEO because it has a presence in every country where you wish to operate. Why use a ANZPEO? For any company that wants to build a team in New Zealand, using a PEO that is specific to this country makes sense. The main advantage is working with a smaller company that has an in-depth understanding of the local market. Your ANZPEO will have connections with insurance companies, training and payroll providers, so they can get you the best service and the best price. When you work with an international PEO, you will often find you are dealing with a larger company. As a result, you become ‘just a number’ and it can be difficult to access the personal service your business needs. In addition, an international PEO often contracts work to a local PEO anyway. This means that if an employee has a question, they will direct it to their manager, who will direct it to the international PEO, who will direct it to the local PEO. And then the answer has to make its way back to the right person! It’s easy to see why this ends up wasting a great deal of time and causing confusion. Further benefits of using a PEO specific to New Zealand are: – You have an operator in a time zone that matches your employees – Your local PEO understands the changing requirements in New Zealand for employment and compensation – Your local PEO is smaller and more likely to be agile enough to meet your evolving needs – Choosing a New Zealand-specific PEO will help you to fast-track your presence in this market without the need to establish an entity Many New Zealanders prefer to take a job when they have the knowledge that there is a point of contact who is based close by and understands the expectations of employees in New Zealand. If they have the choice between being hired by an international PEO and one that is specific to New Zealand, they will probably prefer to keep things close to home. Want to know more about the benefits of using a New Zealand-specific PEO? Contact ANZPEO today.