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Published 31 October 2023 | 2 min read
New Zealand small businesses are facing a challenging trading environment, but they are still hiring.
New Zealand small businesses are facing a challenging trading environment, with weak sales and rising costs. This is putting pressure on small businesses to make tough decisions, such as whether to hire new staff or cut costs.
In the past, small businesses have been forced to lay off staff during periods of economic uncertainty. This can have a devastating impact on both the workers and the businesses themselves.
However, the current strong jobs growth among small businesses suggests that they are determined to avoid this outcome. This is a positive sign, as it suggests that small businesses are confident about the future, even if the short-term outlook is uncertain.
Small businesses play a vital role in the New Zealand economy, accounting for over 90% of businesses and employing over half of the private sector workforce. When small businesses are forced to lay off staff, it can have a ripple effect throughout the economy.
There are a number of things that small businesses can do to attract and retain top talent, even in challenging times. These include:
- Offering competitive salaries and benefits
- Providing a positive work environment
- Investing in training and development opportunities
- Creating a culture of innovation and creativity
Example: A small business in the hospitality industry is facing weak sales due to the rising cost of living. However, they are still hiring new staff because they are confident that the industry will rebound in the long term. They are also offering competitive salaries and benefits to attract and retain top talent. In addition, they are investing in training and development opportunities for their staff so that they are well-positioned when the industry does recover.
Small business owners should continue to invest in their staff, even in challenging times. By doing so, they can position their businesses for success in the long term.
Key statistics from the Xero report:
- According to the Xero Small Business Index New Zealand Update for July-September 2023, small business jobs growth remains very strong, averaging 6.8% year-on-year for the three months to September.
- This is despite weak sales growth, which averaged only 0.7% year-on-year over the same period.
- The strongest jobs growth was recorded in the other services sector (+11.0% year-on-year), followed by manufacturing (+7.5% year-on-year) and hospitality (+7.2% year-on-year).
- The weakest industry for jobs growth was agriculture (+3.4% year-on-year).
The strong jobs growth among small businesses is a positive sign for the New Zealand economy. It suggests that small businesses are confident about the future and are determined to avoid laying off staff. Small business owners can attract and retain top talent by offering competitive salaries and benefits, providing a positive work environment, and investing in training and development opportunities.
The transitioning new government can also play a role in supporting small businesses during challenging times. This could include providing tax breaks, access to capital, and other forms of assistance.