Is Employee Wellbeing the Key to Skills Shortages?

Is Employee Wellbeing the Key to Skills Shortages?

As we bubble along in this ongoing stew of uncertainty, business owners are finding operational challenges are heating up on several fronts, not least of which is the skills shortage.

Exacerbated by current immigration policies, there is no doubt whatsoever that it is harder and harder to retain staff. One company I know has lost seven staff in recent weeks – two changed professions entirely, three have gone to competing firms and two have gone overseas to be reunited with their loved ones. The company had done all it could to keep the staff but external pressures put paid to their efforts putting them back in the recruitment market looking at a rapidly evaporating pool of talent.

There are macro-economic needs that have to be addressed at government level in order to resolve this and other pressures but what can business owners do in the meantime?

At the time of writing, New Zealand is at the start of Mental Health Awareness Week and the internet and social channels are abuzz with ways to help others – and yourself – manage your mental health. For employers, employee wellbeing has moved to centre stage. As we all deal with the challenges of prolonged lockdowns and restrictions, for some households significantly reduced incomes, home schooling, distance-caring and a host of other concerns, our employees’ wellbeing is paramount. We have to consider how workload can be managed, communication maintained and skills improved in a radically altered operating environment. Money is no longer the only motivator – employees are looking for genuine consideration and a purpose-driven employer – which means wellbeing policies have to be developed and implemented. And not only policies develop – in recent years the management of wellbeing has become a job in itself, with larger companies introducing the role of ‘chief wellbeing officer’ or ‘employee wellbeing director’.

The other great motivator is personal development – which is the cue for all business owners to get training today. Find the right people to sit in the right seats undertaking work they are suited for – trying to ‘fill the job’ with the wrong person will only make things worse. Training and development from within will help you grow your people along with your vision. If you are not sure about the qualities and strengths needed for a role, run a skills audit and identify what’s needed and, if you still find yourself struggling, ask for help – this is one of the many areas where a peer board or business mentoring can be invaluable.

The skills shortage will be with us for some time – building a reputation as an employer of choice with genuine concern for employees is one way to tackle the challenge.

Beating the Lockdown Business Blues

Beating the Lockdown Business Blues

There’s no doubt about it – things are tough. Several weeks of lockdown have done nothing to ease the mounting pressures on businesses and we can all see the business blues are creeping in.

We know the hard hit sectors are hard hit once again and as much as possible is being done to help them through this current hiatus. Those sectors that have not been hard hit to date are also feeling the pinch as the problems that have been building over the last twelve months have compounded to create an operating environment that serves up one set of instabilities after another.

Supply chain interruptions have reached crisis point for many and with Auckland in extended lockdown even local supply chains have stalled.

Working capital is under pressure with businesses having to order stock far in advance – six months in advance is not uncommon – and, as well as ordering far ahead, owners are having to order more and carry more stock, clogging up cash flow, not least thanks to slower payments out of Auckland.

All things considered it is a much tougher environment and although many business eased into lockdown which, despite its sudden arrival was not a new experience for us, many appear to have hit a slump. Emails and phones are going unanswered and in some parts of the country it feels like some operations have ground to a halt as they wait for someone to press the restart button.

How then do we cope with all this? As business owners, how do we tackle the operational issues, the nationwide slow-down and, perhaps the biggest issue of all – our own motivation?

My first suggestion would be start with scenario planning. Forget about ‘best case’ scenario completely and work instead on ‘most likely’ and ‘worst case’. Those who are faring best at the moment took time out months ago to think ahead. They looked at the ‘most likely’ scenarios and realised that lockdowns and COVID problems would be with us for some time, so they adapted their business models and operations to allow for alert level disruptions. Interestingly, worst case for many isn’t an alert level change. It is bound up with the supply issues or working capital and that is certainly something that can be addressed through good scenario planning.

If you have slowed down, stop and restart. Take some time to look at where you are, how much you’ve achieved in the last 18 months simply by staying in business and then look forward. You will be staring uncertainty squarely in the eye and pushing on with ‘more of the same’ may seem daunting, sapping your motivation even further. And this is where my second suggestion comes in – focus on your good leadership habits and get some support. Don’t try to go it alone. Our peer boards have been invaluable for members throughout the pandemic as it brings business owners together to tackle the issues we are all facing right now. When you are the one everyone is relying on to get the business through, find the back-up you need – don’t struggle on trying to cope alone.

Beating the lockdown business blues isn’t easy – but talking with your business buddies on a peer board can certainly lighten the load.

What is working capital?

What is working capital?

When you start your business some of the language used to describe aspects of the financial operations can be mystifying to say the least. In this occasional series, our advisors explain some of the concepts – and language – that is used to give you a clearer understanding.

This week, Gordon Stuart gets to the bottom of working capital and what it means for a business owner. 

Put simply, working capital is used to cover all a company’s short-term expenses, including inventory, payments on short-term debt and operating expenses such as wages, salaries, rent and other overheads. Working capital oils the wheels and is used to keep a business operating smoothly in order to meet all its financial obligations within the coming year.

  • Working Capital is defined as current assets minus current liabilities and, if a business cannot meet its short-term debt obligations, it is experiencing liquidity risk. Running out of cash is what kills any business first.
  • Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market at a price reflecting its intrinsic value.
  • Cash is universally considered the most liquid asset, while tangible assets, such as real estate, fine art, and collectibles, are all considered relatively liquid.

Understanding your business’s working capital requirements and where your cash is absorbed is key to success when you approach a bank for support.

The first thing a bank looks at is:

The cause (where money has gone) and the purpose of your proposal.

What proportion is being provided by the bank, the business and other participants (e.g. second tier lenders, or asset financiers).

The intended use by the business e.g. to increase working capital to fund growth or to fund an acquisition.

Some questions you need to be able to answer include:

  • What is the length of your operating or cashflow conversion cycle? For example, an importing retailer needs to know how long it takes to get cash from retail sales from the time they source or pay for imports – often more than 3 months. Likewise many service providers do the work but don’t get paid for 30 – 60 days. More importantly do you know how to change the length of the operating cycle or identify ways to unlock cash to improve working capital or support growth?
  • What are your intra and inter month working capital requirements? Banks look at your daily and monthly highs and lows of your overdraft as an early warning signal of trouble.
  • How does productivity and seasonality impact your cashflows? For example – holidays and short months reduce labour productivity which usually has a negative cash impact, alternatively increasing production to build stock for the peak summer season absorbs cash.
  • How many months working capital do you have if you incur losses?
  • Do you have access to an injection of cash if needed?

If you are struggling to understand some of the principles or, like many business owners are learning as you go, don’t be afraid to ask for help – we’re here to do just that.

Lockdown wellbeing and trusting your team

Lockdown wellbeing and trusting your team

Employee wellbeing was top of my mind when I started to write this post earlier in the week – then suddenly lockdown was announced and our working patterns were upended once again.

There’s lots of messaging around ‘we’ve done it before and we can do it again’ swirling through the networks and media and, yes, we have and we can – but that doesn’t make it an easy task for anyone.

Each lockdown brings different stresses and pressures for business owners who have to switch into crisis mode to keep their enterprise alive and balance the wellbeing and needs of their teams. Unless you are on the list of essential services, it is inevitable that activity will slow or stop and, as the daily list of locations of interest grows, the probability of your team members spending their day waiting for a test rather than working is considerable.

As we stare at the possibility of a longer lockdown and a significant outbreak what’s the best course of action? Our Winter Pulse Check told us that while owners were confident about the future of their business there was no room for lockdowns. Yet here we are.

Hard as it might be to hear, my first suggestion would be relax. Go for a walk – locally of course – and give yourself a chance to breathe. When you come back, look at the various scenarios that might result from the current situation. Many business owners will have contingency and continuity plans in place drawn from experience after our previous periods of restriction but others won’t. If it all feels overwhelming, ask for help. The challenges will be common to everyone and, as the old saying goes, a problem shared is a problem halved, so talk to others – and talk to your team. Let them lead, provide suggestions and solutions. It may be your business but you don’t have a monopoly on good ideas. Involvement, collaboration, inclusion and managed change are all positive outcomes for businesses in these trying times.

When you think of your own – and your employees’ wellbeing in the coming weeks – remember your values and work to them. Sharing your concerns, open communication, empowering others to speak up and trusting people to do their jobs in the most difficult of circumstances will ease the stress, address the challenges and strengthen your business bonds for the future.

What’s your Stress Quotient® – and how can you keep it under control?

What’s your Stress Quotient® – and how can you keep it under control?

Our Winter Pulse Check results showed that while many business owners remain confident their businesses are doing well, there has been a marked rise in those reporting anxiety, stress, and disturbed sleep as operating conditions worsen.

And it’s not just business owners feeling stressed.  The impact of Covid on workplace stress levels has been significant over the past 12 months and media coverage has highlighted the potential financial liability business owners may have if they choose to ignore the signs among employees.

The first step to reducing workplace stress is being able to identify and acknowledge it exists. There are several tools available to do this and it is an area we’ve been exploring for some time, in association with TTI Success Insights and an online tool – called Stress Quotient®  – which helps Kiwi business owners identify, measure and monitor various stress types within organisations and teams. Defining stress as ‘the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker’, Stress Quotient®  identifies seven key workplace stressors that both employers and employees need to watch for.

  1. DEMAND: While today’s employees may want challenging tasks to maintain their engagement and motivation, it is important that demands do not exceed the ability to cope. Workplace stress tends to build as demands and responsibilities increase. Stress can be directly tied to poorly designed jobs, excessive workloads and talents and skills not matching the work. The goal is to have a balance between demands and time.
  2. EFFORT/REWARD BALANCE:  Having purpose or job satisfaction is an important factor in any job. High effort without satisfying one’s need for rewards can lead to workplace stress. Rewards come in many forms; recognition, helping others, gaining knowledge, personal growth, structure or compensation. High effort in the workplace is essential but must be matched by the reward that the individual desires. Workplace stress arises when there is a significant disconnect between needs and rewards.
  3. CONTROL: A feeling of powerlessness is a universal cause of job stress. You alter or avoid the situation because you feel nothing can be done. Common sources of stress at work include complaints of too much responsibility with too little authority, being involved, not being heard and no one understanding what you really do. Workplace stress increases as one’s degree of control decreases. The goal is to have a balance between responsibilities and personal control.
  4. ORGANISATIONAL CHANGE: Organisational change affects people differently. While some people welcome it, others become apprehensive and stressed at the mere mention of change. Organisational change can be defined as any change in people, structure, technology or procedures and can vary in degree and direction, produce uncertainty and initiate both stress and opportunities.
  5. MANAGER/SUPERVISOR INFLUENCE:  Common reasons given for stress at work include lack of effort from your employees or self-imposed pressure on yourself. Most people don’t realise that stress is a part of every job. That’s why, when you are working under reasonable demands you can get the job done more efficiently. However, when you do things that go beyond normal pressure this can cause stress.
  6. SOCIAL SUPPORT: A lack of support from colleagues and leadership can lead to workplace stress. A supportive environment is one where leadership provides clear and consistent information and co-workers stand ready to assist when needed. An environment that promotes positive working relationships and addresses unacceptable behaviour promotes productivity and employee engagement.
  7. JOB SECURITY: People worry about many aspects of their jobs, but most of the fear comes from job security. Job insecurity comes from the fear of job loss and the associated unemployment implications. Stress can also originate from a lack of advancement or being promoted too slowly. People also can have a concern with being promoted too quickly to be successful in the job.

By measuring each of these seven key workplace stressors, we can focus on the things that are within one’s control without having to make huge changes or rethinking career ambitions.

There’s a well-known saying: What gets measured gets managed so it may be time for NZ businesses to start measuring organisational and individual stress levels. Not doing so may overlook important health and safety issues in the workplace.

If you think Stress Quotient® could be a valuable tool to identify, measure and monitor stress levels in your organisation please get in touch with me or one of The Alternative Board team.

Warm up your winter – take the Pulse Check and inform government policy

Warm up your winter – take the Pulse Check and inform government policy

It’s time for our Winter Pulse Check which means it’s time for you to tell us how you are and, in the process, take the opportunity to inform government policy.

Our quarterly Pulse Check is designed to track the progress of small to medium businesses and their owners. You keep your business going and we are here to keep you, the business owner, on track, motivated and equipped to cope in our current times.

Your insights ensure we continue to have the right resources to help you and, by listening to and understanding your perspectives, we can better support your needs. We also make your views heard by sharing your perspective with Government and policy makers who have shown a keen interest in what you have to say.

Last month, Hon. Stuart Nash, Minister for Small Business said of The Alternative Board’s Pulse Check series: “I find them invaluable. My thanks go to members for participating. It informs a lot of what we are doing and gives us insights we wouldn’t otherwise have”.

Now, as we arrive at the mid-winter mark, it is your turn to let us know how things are. You’ll find the Winter Pulse Check here and you can let us know how you are managing, the challenges and opportunities you face, and what would help you and your business in the months ahead.

The survey will be live until 1 August 2021 with the results available soon after.

If you would like to watch Stuart Nash talking about the Pulse Check you can do that here – https://thealternativeboard.co.nz/pulse-check-findings-inform-government-policy/ – and you can also review earlier results here.

Business Planning