Some of the region's CEOs discuss what's in store for businesses in 2022. Photo / Getty Images
The emotional toll of employee burnout, staff shortages, access to talent, and continued uncertainty will become more obvious as the region enters a third year with Covid-19, experts say.
The "highly-fared invader" of coronavirus had caused "unprecedented" stress levels for some businesses but overall the economy was in "reasonable shape" and 2022 promised to be a pivotal year.
Tauranga Chamber of Commerce chief executive Matt Cowley said the growth of construction, manufacturing and professional service industries had been tremendous in 2021.
"Many people have used the disruptions of Covid-19 as reasons to start their own business."
But the rising cost of living in Tauranga was adding risks for the labour force with staff asking for more money as housing and renting costs increased.
Heading into 2022, Cowley said the emotional load on people heading into the third year of Covid-19 will become more obvious.
"We will see how personal matters impact work performance and vice versa. Employers will need to be aware and mindful of employee burnout, particularly in this tight labour market."
It will ultimately come down to how individual businesses look after their people, he said.
"It will become cheaper for some businesses to purchase their competitors to recruit their staff and gain their customers."
There will continue to be uncertainties and disruptions with shipping delays, more Covid variants, staff shortages and unknown government policy announcements, he said.
"Rising mortgage rates will also reduce domestic discretionary spending."
Cowley said allowing business travellers and highly-skilled workers to isolate at home on arrival will help with labour shortages and removing Auckland's border restrictions will benefit domestic tourism and wider movement of skilled workers.
"There are already early signs of young people leaving New Zealand to work overseas, presumably for better money and cheaper living costs."
"Could be worse" were the three words chief executive of economic development agency Priority One Nigel Tutt used to describe 2021.
Tutt said the economy has continued strong, which was a huge benefit for the region compared with others.
"While retail and accommodation have missed out on a bit of business with Auckland locked down, overall we are in reasonable shape – helped a lot by strong manufacturing and horticulture sectors, and the Port of Tauranga."
The regeneration of the CBD was gaining pace and the community will start to see more changes in 2022 with the opening of the new Farmers development Thirty Eight Elizabeth, he said.
But getting staff, managing the uncertainty of Covid restrictions and supply chain shortages, which affected mental health and burnout for many businesses, were some of the biggest challenges.
Access to talent will be an ongoing issue with more competition between New Zealand and internationally, particularly while the borders were closed, he said.
"Businesses will be looking to take advantage of the many growth opportunities out there, staff will be the main constraint to that – so hiring and retention practices will need attention."
Rotorua Business Chamber chief executive Bryce Heard said when Covid hit in early 2020, New Zealand embraced the need for a "short, sharp lockdown in the interests of public safety from an unknown and highly feared invader".
By the end of 2021, Heard said the "short, sharp" lockdown had morphed into a seemingly endless series of weekly reviews and changes of direction for businesses.
"If there is one thing that stresses business, it is uncertainty and we have had more uncertainty in 2021 than I have seen in my long working life."
Heard said the safety-first stance taken by the Government was entirely understandable but was taking a massive toll on business.
The need for vaccination seemed self-evident to most but has proved incredibly divisive and businesses have found themselves responsible for enforcing the rules sometimes at the risk of their own safety, he said.
"All in all, stress levels have been at unprecedented high levels."
The impacts on Rotorua's tourism-based economy have been quite devastating for many, he said.
"We have put on a brave face, and tried our best to support Government, sometimes to our own detriment."
Heard said the first priority for Rotorua businesses in 2022 was to come back refreshed.
"There is a mountain of mahi confronting Rotorua and 2022 promises to be a pivotal year for our city.
"This mahi is already underway ... but it will be a big journey and will require all hands on deck working together, if we are to restore and surpass Rotorua's proud place in New Zealand's manaakitanga history."
Rotorua Economic Development chief executive Andrew Wilson used the words uncertainty, ambiguity, and change to describe 2021.
Wilson said some of last year's biggest challenges for the business sector were
Auckland and Waikato lockdowns, supply chain delays, ongoing cost increases and uncertainty around the international border settings.
Understanding and implementing the traffic light system, alert level restrictions and labour market challenges including talent shortages also challenged the sector, he said.
Despite this, Wilson said they had seen new tourism and hospitality businesses start up, others reinvent themselves and some who have re-emerged from hibernation.
The primary industry, including forestry, wood processing and agriculture, have achieved strong results, residential and commercial construction has increased, and large projects were nearing completion, he said.
Wilson said some of the biggest challenges facing the city's business sector in 2022 will be continued uncertainty that Covid-19 presents, workforce stability, staff retention and skilled talent across all business sectors and continued cost escalations.
But he said the sector could look forward to a return of international visitors, inner-city investment, delivery of more houses and a strong year for the primary sector.
To prepare for the year ahead Wilson said businesses should ensure their businesses are Covid safe, invest in their people, actively pursue productivity improvements and seek support and resources available.
Tourism Bay of Plenty general manager Oscar Nathan described 2021 as "constantly swirling uncertainty".
Nathan said various lockdowns, managing ongoing costs, higher expectations regarding staff wages, the difficulty of forward planning and ongoing border closure were some of 2021's biggest challenges.
There were clear signs of some people no longer playing on the same side as employers are thrown a curveball to interpret, implement and deal with consequences of the traffic light system and vaccination issues, he said.
The new year will mean quickly coming to grips with what the "new norm" demands of a cautiously optimistic domestic market amid an international marketplace at varying degrees of Covid response, trade and political uncertainty, he said.
"It will come down to businesses having the ability to plan, scale, and secure talent and grow versus simply just sustaining."
Nathan said tourism businesses, in particular, should focus on making the most of the summer high season and pent-up demand from Auckland and Waikato.
"The trick will be ensuring the scalability of each offering and having the capacity and staff on hand to deliver."
Understanding how best to capitalise on events in the region will be the next big drawcard ahead of the impending return of the cruise ship sector in September or October 2022, he said.
The animal was euthanised after ripping through a wire fence.