SMEs face challenges in 2018
OPINION: It’s not easy running your own business and things are about to get a lot more challenging in 2018.
Xero commissioned research which revealed one in four SME owners are finding it harder to fill vacant roles with good people than they were a year ago.
That is happening at a time when we’ve been experiencing record levels of net migration.
If we can’t fill roles now, then woe betide businesses when the government slashes immigration. It’s a move that needs careful handling, and it’s essential that the government listens to the needs and concerns of businesses, small and large, before it acts.
It probably won’t come as a huge surprise to learn that some of those having most trouble are in the construction industry. I don’t see any sign of the housing crisis easing, which means the pressure to recruit won’t either, as the need for new-build intensifies.
A cut in immigration may help slow demand for houses, but fewer immigrants also means fewer workers. Mention that to those one in four business owners and you can be pretty sure they won’t be jumping for joy.
Throw in the rise in the minimum wage from April and there are challenges ahead that mean you might forgive owners if they refused to rush back from the beach this holiday.
Life’s already a tricky juggle for people running small businesses: I know more than a few who’ve gone without paying themselves, or maxed out their credit cards at times, to ensure their employees are still paid. These are hardworking, decent Kiwis who want to do right by their staff.
But none of this needs to be a cloud over anyone’s summer as it’s not a hopeless picture. The Government does recognise the country has skills shortages in some areas and oversupply in others which needed to be addressed.
Also, things can be done to prepare businesses for the challenges and, at the same time, bring some good cheer to their employees.
They could follow the example of the businesses who have changed how they recruit new people and have started offering more flexible work arrangements.
The double delight of cloud-based technology and a world that is used to living online makes it far easier to unleash people from the constraints of their desk. But it needs a change in attitude.
There are still plenty of managers who deep-down, and sometimes not all that deeply, think that an employee who works from home is skiving. It’s a perception straight out of the 1950s playbook, but the way we work is unrecognisable from back then and so it’s high time our approach changed to keep up.
It’s smarter to focus on output and outcomes, rather than hours in the office. Anyone who has worked from home will tell you that they are often far more productive without the distractions of their colleagues.
Factor in the hours wasted sitting in traffic, particularly in the main centres, and it becomes a much more logical option. It doesn’t have to be every day, but letting staff choose where they work can reap massive rewards in goodwill – and productivity.
Another answer to recruitment issues could be sitting right under business owners’ noses: train their existing staff.
They already know the business, it provides them with career development, which has to help their job satisfaction, and it lessens the pain of recruitment. The trick is working out how to hang onto them once they’ve got their new skills.
Knowing there is a clear development pathway and that career progression is not only possible, but desirable, is a great selling point for anyone competing for talent in the job market and tackles some of those recruitment issues.
As with most things, people with a plan tend to ride the waves better than those who stick their heads in the summer sand. Businesses can’t control what the government chooses to do in 2018, but they can assess their options and make sure they’re ready for change. – Craig Hudson is the New Zealand country manager for Xero