Small biz battens down the employment hatch

Randstad chief executive Deb Loveridge

Small to medium businesses in New Zealand are focusing on surviving the economic downturn, with an employment intention survey showing a 27 per cent drop in businesses looking to increase staff since 2008.

The research, conducted by recruitment and HR company Randstad, found that last the number of small and medium sized enterprises (SMEs) planning on increasing headcount had halved from 51 per cent last year to 24 per cent."

"Despite these figures and the intense pressure on local SMEs to reduce costs to survive the economic crisis, it is encouraging to see that small to medium sized employers are not making rash decisions to cut their workforce," said Randstad chief executive Deb Loveridge.

While there is not much prospect of expansion for small businesses, the number thinking of cutting staff has risen, but only to a low level. Those looking to reduce numbers rose from 2 per cent in 2008 to 9 per cent this year.

The large majority - 67 per cent - planed to maintain employee levels over the next 12 months, said the report.

SME workers are fairly optimistic though - 78 per cent believed they would receive a pay rise over the coming year. Of those, 37 per cent thought it would be an increase of 5 per cent or more.

Employers surveyed believe that attracting talent is no longer the priority it was last year, with only 13 per cent viewing it as "their number one" priority.

"This significant shift in outlook reflects the changes we are witnessing in the New Zealand economy and suggests SMEs are focussing on more pressing concerns, such as managing internal change, people and productivity and human capital costs, rather than attracting and retaining talent," said Loveridge.

The research, which was an 'opt-in' survey which drew its participants from a database of the recruitment company's clients, also found a divide between large and smaller businesses about the value of hiring workers from different backgrounds.

It asked questions of 2,682 businesses in Australia, New Zealand and Singapore. 135 of the participants were New Zealand small businesses.

One set of questions asked small and medium sized companies about the benefits of having a more diverse workplace.

While 91 per cent of larger New Zealand businesses taking part in the survey thought hiring people from diverse groups benefits their organisation only 76 per cent of SMEs agree.

Loveridge said she did not think this was due to "the particular views of SME owners".

It suggested, instead, that more work was needed to demonstrate the benefits of a diverse employment strategy to organisations of all sizes.

"There is a misconception that hiring people from diverse backgrounds can be costly and time consuming. In fact, the complete opposite is true and having a willingness to employ people from a wide range of backgrounds could be the difference a business needs to succeed.

"A diverse workforce can boost creativeness, productivity and overall staff morale. If this can give an SME a competitive or efficiency advantage over their competitors, then it can translate into boosting the bottom line."

-NZ HERALD STAFF