Building Recruitment managing director Kevin Everett says with a slowdown in the economy pretty evident, and more people either looking for a more secure company or being made redundant due to a drop-off in projects,
now is a great opportunity to invest in skill levels across your business.
During the past few years we have experienced a massive skills shortage which has resulted in many businesses placing round pegs in square holes in the hope they will eventually reshape and fit.
We have seen carpenters with no previous experience in project management being thrust into site or project manager roles, resulting in poor project delivery.
And skilled labour has not been as skilled as hoped, and quality of build has suffered.
This is not a poor reflection on those doing that type of work. They have tried to step up, but have been thrown in the deep end without having the proper opportunity to learn on the job.
And you can’t really blame employers as they have had to make do with what skills have been available.
However, the tide is turning which could result in employers now being able to take businesses to a whole new level. People are the most vital part of any business, which is why now is their best opportunity.
Having to make do with inexperienced workers has resulted in lower profitability as more resources are required on re-work. An increase in stress, along with mental well-being issues during such a massive boom, has taken its toll on business owners and employees.
With this slowdown, business owners can now take stock, and possibly look at re-training staff that have been placed in unfamiliar positions.
Employers should have more time to do this but, if not, they should possibly look to replace them with more experienced staff.
I believe that, currently, there is an opportunity to make positive changes, especially when indicators such as the Reserve Bank looking to start cutting interest rates in 2023 are suggesting this could be a short-term slow down.
Employers have two choices — stay as they are and struggle, or become proactive and snap up experienced people who can drive their business forward, close the skills gaps, improve project delivery and increase quality and margin.
To help you identify where to start, look to rate your staff as As, Bs and Cs:
• A — rated as being the ones you cannot do without.
• B — rated as the ones that are steady but not world beaters.
• C — rated as problem workers, unreliable, and do not have the skills or attitude but you need them out of necessity.
Once you have identified who is who in this matrix, plan accordingly.
What would my business look like if I could develop the Bs to As and the Cs to Bs?
Look at those B and C workers and ask yourself what training you can provide that could make them an A or B?
If your business is experiencing a slowing down of the market, take time to carry out that training and invest in your people now while you have the time.
If you feel it’s more about attitude, and training has previously been provided with no improvement, then look at replacement staff.
Online advertising dropped by approximately 3% in November 2022, and finding skilled labour improved by 14% in the same period. I see these numbers increasing through the first quarter of 2023.
Fewer companies advertising and more people looking is the perfect situation employers want to find themselves in.
Another positive for an employer is the drop in salary expectation — so you may be able to upskill your team and not have to pay more in wages/salaries to the people you already have.
What should your concerns be regarding retaining staff?
Some trends we are noticing that you need to be aware of as an employer are:
• Contractor v Wage: We are noticing project managers, site managers and builders who are on contract are feeling very uncertain now. We are seeing more of them approaching us looking for wages, but many companies are not interested in offering them a waged role when the market is so fragmented.
If you are in this situation, ask yourself how you will replace this person if another company takes them from you. Would they be an A or B or C? If an A then you face a huge issue, and even a B could cause you concern.
• Lack of transparency: As businesses are slowing down, it is not always a bad thing. It gives the business time to take stock and review, improve systems and develop training in preparation for the market lifting again.
However, if there is a lack of communication around this then workers may start to add one and one and make five. They will be nervous about losing their job or being put on reduced hours.
Meanwhile, the household costs are increasing and possibly mortgage payments too. This can be a reason for them to look elsewhere and, needlessly, if only there was better communication.
• Overseas work: With Australia offering higher wages and cheaper housing, we are seeing this becoming a more attractive option for Kiwis. You need to look at how you can retain your key staff.
This is more important for keeping your As in the business as they will be the ones being hunted by aggressive Australian companies wanting New Zealand trades and managers
• Mental well-being: Many workers are feeling burnt out due to the demands over the past five years and from Covid. They may feel this is a great opportunity for them to look elsewhere to gain a better work/life balance.
Temp labour v permanent hire
It is worth considering that during these more difficult times we see an increase in demand for labour hire across many sectors. The reasoning is pretty much self-explanatory because it helps with the stop-start workload we experience.
With only a week’s notice you can reduce or increase your staff numbers, depending on your requirements.
With a skill shortage still evident, it would pay to plan accordingly, and book workers with as much notice as possible to ensure you do not miss out.
To top everything off, as a result of the market uncertainty, we are hearing many migrant workers scheduled to arrive in New Zealand have been postponed. This could have a huge negative impact on available skilled labour.
