New Zealand’s unemployment levels have reached their lowest in a decade – sitting at 3.9 percent. In addition, the employment rates, which have increased to 68.3 percent, are the highest we’ve seen since the series began 30 years ago.
The plummet in unemployment figures took economists by surprise after forecasting a figure of around 4.5 percent.
The latest Xero Small Business Insights (XSBI) paints a slightly different picture for small business hires, which are down 0.3 percent on August figures – the third month in a row that has seen a decline.
Of course, a decrease is not what we want to see, but the nature of the sector means it’s not uncommon for SMEs to go through peaks and troughs – and this would be the case for any sector that grows at the speed small businesses have been.
While our latest figures show a drop in small business hires, it’s still promising to see that the metric is in fact up 0.17 percent compared with this time last year.
We also witnessed a dip in small business hiring from May to June of this year, with a reduction of approximately 1.3 percent - likely to be the impact of seasonal work. This slight drop in September is nowhere near as significant and should instil some positivity as we head towards Christmas.
In terms of industry figures, despite a tough year, it’s great to see hiring numbers improving for the construction industry, which has seen a 4.2 percent increase in the number of employees hired compared to August.
September was a noticeably poor month for the transport, postal and warehousing sector, where hiring numbers fell by 4.5 percent, and the education and training industry, which dropped from -0.9 percent to -1.9 percent. Noting the talent shortage within New Zealand’s education sector, these results were definitely not unexpected.
The crux of the issue is our skills shortage, which continues to make hiring tricky for both small and large businesses, hampering their ability to grow. But small businesses aren’t helpless, providing they hire for culture and talent, while leveraging the diversity of thought of their present and future employees. Many small businesses around the country are looking at the sort of benefits they offer, and have either amended them or are in the process of doing so, to attract employees of the right skill and cultural fit, setting themselves up for future success.
One example of this can be seen by Curtis Bailey, CEO and Founder of Tradify, who has started to offer benefits beyond cash, such as working from home, and an employee share option scheme. It’s changes like these which will make small businesses more appealing to work for in the eyes of both graduates and experienced workers.
Recruitment Agency, Randstad, recently compiled a list of the top 10 things workers want from their employers. Findings showed that although the fast-growing small businesses may not be able to compete on salary with the big players, some Kiwis believe it’s worth taking a pay cut to get hired by a company they really want to work for. This is not a change we expect to see overnight, but over time, perks such as better work-life balance, work atmosphere and career progression, should position small business employment above the rest for employees.
Overall, the soft dip in New Zealand businesses’ hiring trends is not a cause for concern given the numerous factors small business employers have been faced with this year. With Christmas around the corner, we expect to see an increase within this area, as we have done in previous years.
This article was prepared by Xero using Xero Small Business Insights data, for the purpose of informing and developing policies to promote small business in New Zealand. It contains general information only and should not be taken as taxation, financial, investment or legal advice. Xero recommends that readers always obtain specific and detailed professional advice about any business decisions.