One of the main issues contributing to a lack of business confidence right now is difficulty in recruiting appropriately-skilled employees. The Alternative Board NZ’s Spring Pulse Check showed that 37% of the businesses surveyed were suffering due to the inability to recruit the people and skills they required.
COVID-19 restrictions have put additional strain on the labour market and exposed the problem, but it would be too simplistic to suggest that the pandemic is the sole cause. Other factors may include
- Long-term underinvestment in training for New Zealanders to acquire key skills.
- Competition for labour from Australia, where wages tend to be higher and living costs are often more favourable.
- Significant expansion in the public sector, which leaves fewer people available for employment in businesses.
Irrespective of the causes, businesses need to think about how they will compete to recruit and retain the employees they need in the current labour market conditions.
The best way to do that is to ensure the business provides a happy workplace with a positive workplace culture so your good staff will not want to leave and others will be attracted to apply.
Business owners and CEOs should strive to create and maintain a happy workplace for their employees – and remember they spend much of their own time there. An unhappy environment only adds to their personal stress and workload.
Happy workplaces have lower staff turnover, so recruiting, onboarding and training new employees becomes more manageable.
A workplace culture where employees feel safe, comfortable and valued could make the difference between success and failure in recruiting and retaining the talent that your business needs to survive. Creating and maintaining such a workplace should be foremost among your staffing strategies.
Of course, there are other ways that you can try to compete in a tight labour market. You could try offering more money – if you are offering way above the market pay rates you are almost certain to attract a few applications from mercenaries. However:
- Can you afford to increase your payroll expenditure? Remember, this is likely to be a long-term increase in your business expenses.
- There is no guarantee that the mercenaries that you attract will have the attitude that you are looking for. They may only be interested in the money, and not be so interested in the long-term success of your business and may leave if they get a better offer.
- You may rely on some of your best people to train the new recruits in at least some aspects of the job – so make sure there is no apparent pay gap between your loyal long-servers and the fresh faces they are training.
You could try offering perks (such as free health insurance, paid time off, kiwi saver co-payments, discounts to your business’s products or services etc). Some of these have only a small marginal cost to your business and, used wisely, can help in building employee loyalty. However, some perks can add substantially to your business costs and you need to make sure that any perks are accessible to all staff rather than a recruitment bargaining tool, adding stress and ultimately being counterproductive. A happy workplace is probably the most cost-effective strategy for recruiting and retaining good staff. In a happy workplace your employees will help in attracting the talent that you need to your business and attract more customers.
Our Summer Pulse Check is now live. The Alternative Board seasonal Business Pulse Check is gaining significant traction within the market and our voice is starting to resonate with key politicians including the Minister for Small Business, Stuart Nash. You can have your say on the constrained labour market and other issues by clicking here.