RotoruaNZ chairman John McRae and Rotorua Business Chamber chairwoman Miriam Hewson at the launch. Photo / Laura Smith
Navigating a "nightmare" skilled staff shortage and increased costs are the biggest concerns of business leaders, a new survey has highlighted.
Businesses across the region, including in hospitality and tourism, have been crying out for staff for months.
Owners and managers have been filling gaps when low on staff, and some have been raising prices to cover increased costs.
Bay of Plenty butcher Doug Jarvis previously told NZME butchers across the region were "really struggling" with the cost of rent, rates and the price of fuel.
Now, he said finding skilled staff had been a "nightmare".
"It has been a disaster to be fair."
There were no butchers to be found, and even finding staff for the counters was difficult.
People did not consider butchery as a career as it was not on their minds, he said, and the only way to become one was through an apprenticeship.
He knew other sectors were facing similar struggles. While the border had fully opened this week to all visa holders, he believed requirements such as the need to be vaccinated should be dropped.
Jarvis had been working seven days a week and said he had previously been able to hire travelling butchers, which helped during busy times.
He said he did not foresee any positive change for the next four or five years.
"I don't know how we can get past it."
El Mexicano Zapata Express owner Eduardo Diaz did not participate in the survey, but agreed that both inflation and staffing issues were of concern.
But he said these challenges were being felt globally, not just in Rotorua or New Zealand.
For example, the cost of oil for 20 litres sat at $45 before the pandemic but now cost $80.
"We can't blame anyone, it's a worldwide crisis."
People needed to be clever about it, he said.
Diaz was optimistic about the near future, particularly with the border having fully opened this week.
Migrants were the "core" of the hospitality industry and played in to the staff shortage. But he said there were always ways of going about it, including cutting open hours or days.
He expected lots of CVs coming through as more visitors headed to the country.
"Going forward, I can only see good things happening. We've got to be positive, we need to be on board about Rotorua."
He was also positive about the offering in the city, saying it seemed with every one business that closed, another two opened up.
"I think the outlook for the future is bright."
Waimarino Group operated across the region and director Blair Anderson said there had been one financially positive month in the last two years.
"Your enthusiasm gets dwindled."
Staffing, inflation and interest rates were all of concern, he said. It was hard to plan and it was hard to budget.
Despite this, the future was looking good, he said, but he did not know from when that would be.
"I would like to see New Zealand's old number one earner come back to some form of its former self."
The first of its kind in Rotorua, the Rotorua Business Pulse survey involved 79 business owners, chief executives and general managers sharing their views on their own, the city's and wider economic situation.
It was a joint initiative between RotoruaNZ and the Rotorua Business Chamber, and will be conducted every six months going forward.
Its findings reflected local businesses were handling issues felt globally, nationally and regionally, as well as some city-specific.
The survey results were released at a launch last month and RotoruaNZ chairman John McRae said Rotorua businesses negotiated a lot of uncertainty over the past two years.
He said some challenges such as rising costs, inflation and retaining skilled staff were shared, but the survey results also showed a strong belief in the potential of the city and a desire to make things better.
The majority of business leaders indicated a positive view of the next 12 months.
"Most businesses are sustained by a strong pipeline of work ahead and are feeling optimistic about the future, with a commitment to investing capital into the business and hiring more staff."
McRae told NZME business leaders were very positive about Rotorua, and this was reflected in the survey.
Challenges highlighted in the survey included the emergency housing situation and business sustainability.
"There is a direct interplay between the social challenges surrounding emergency housing and the ability for Rotorua businesses to feel confident in their city.
"This results in an inability, perceived or real, to attract high-quality staff and be proud of the destination they are selling."
Pennington Consulting owner Liz Pennington contributed to the survey and shared her experience walking through the city after 10 years away and getting a "big shock" seeing people intoxicated, others unwell and people experiencing homelessness.
"Where we are opening our doors and welcoming people we need to look at this and ask ourselves what we are able to do as a community and collective of people."
The survey report on the relationship between social challenges and business confidence says respondents suggested there was an element of 'perception being worse than reality'.
"We need to promote Rotorua to people looking to move to regional New Zealand. That will attract a more skilled workforce to town."
The report says there were about 600 family units and 2000 people in motels in the city.
"As a direct result, the city has suffered considerable reputational damage, particularly given the mixed-use providers, and we will all need to work hard to turn this around. It will take a community-wide approach to change the narrative."
But the issue of most concern was inflation and the cost of goods and services; about 71 per cent of respondents said they were fairly or extremely concerned.
Finding skilled staff was of high concern at 68 per cent, and regulatory and policy challenges at 52 per cent.
Business journalist Rod Oram spoke at the launch and noted there had been excellent responses with "real insights there".
Commenting on the results of the survey, he said there was greater confidence in participants' own businesses than the wider economy.
Concerns around inflation and recruitment were unsurprising, he said.
Noting the concern around the skilled staff shortage, he warned the business community should not "default" to hiring more people.
Instead, he said businesses should invest more into developing their people and their business.
Speaking about the impact of the pandemic on businesses, he said adaptability and flexibility had been crucial.
In his presentation, he showcased the findings of this year's World Economic Forum Global Risks Report, which reinforced that many of the challenges the local business community faced were felt by others on a global scale.
The report listed risks that worsened the most since the start of the pandemic, and at the top of list was social cohesion erosion at 27.8 per cent. Livelihood crises and climate action failure were close behind.
Debt crises was high on the list at 13.8 per cent.
Looking to the future, Oram said there were "abundant opportunities" for those who were strategic.
"The businesses that can spot them and nab them are in a powerful position."
Tauranga Business Chamber chief executive Matt Cowley said, generally, businesses across the country were facing the same challenges of filling staffing issues, ongoing disruptions, and battling against rising inflation in a cooling economy.
"Most businesses have plenty of work on at the moment, while also preparing for a tough 12 to 18 months ahead with increasing geopolitical volatility and tightening consumer spending."
Looking ahead 12 months, a net 92 per cent expected costs to their business to increase, while a net 67 per cent expected the price of their goods or service to increase.
In Infometrics July forecasts principal economist Brad Olsen said New Zealand's economy might just be able to avoid a recession this year, but the bulk of the economy will feel like it is going through a contraction anyway.
The impending revival of the tourism sector would aid economic growth, but profitability for domestically focused businesses will be heavily eroded by continued cost pressures and a drop-off in revenue as consumers go into their shells.
"Households are coming under massive pressure from rising interest rates, a housing correction, and an inflationary squeeze on their budgets," he said.
Business consultancy firm Business Changing's State of the Nation survey released recently revealed Covid-19 is no longer the main concern for Kiwi business, falling bottom to the list of issues keeping them up at night.
Small and medium-sized businesses were feeling the pinch of a tight labour market and immigration policy, with getting adequate staffing the biggest issue they are facing right now.
The survey of 200 business owners conducted in the first half of July found for every 12 employees they have right now, they have one job vacancy.
The biggest issue business owners expected was shoppers being cautious with spending, followed by rising costs driven by staff and suppliers, government decisions and policies, alongside recruiting and retaining staff.
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