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Minimum wageMarch 7, 2019
New Zealand has one of the highest minimum wages in the world, and was the first country to introduce a minimum wage. As of April 1, 2019, more than 200,000 New Zealand workers will benefit from an extra $48 a week in their pay packets thanks to the most significant increase to the minimum wage since it began. Yet it’s also a big cost for New Zealand small businesses to absorb.
The minimum wage has risen from $16.50 an hour to $17.70, affecting small, medium and large businesses alike. So, where does that leave you as a business owner, and how do you prepare for these new expenses?
Firstly, your business needs to forecast and adapt to the changes and factor them into the way you do business. There is no way to escape wage increases. The only thing you need to worry about is how you keep your business running smoothly with the extra expenses. Although many employers don’t have financial resources to incentivise their best workers, in one way or another, your business will need to spend money to make money.
One of the most important things to remember that might take away a little bit of the stress is knowing you are not alone. It isn’t just your business that is trying to adapt to these changes; your competitors will also be experiencing these wage increases. Keeping your best staff happy and loyal is crucial to the success of your business, and a great team is the best investment your business can make to prepare for the coming changes.
The best way to prepare your business for any increased costs is to employ better employees and retain the best ones you have. On average it costs around a fifth of an annual salary to train a new staff member. Keeping that figure in mind, it is undoubtedly better for your business to retain employees than hire new ones.
Another way is to run an expenses audit on your business. Can you lower the overheads in any way to balance the wage increases? Can production costs be decreased in any way? Are your suppliers the cheapest option? Are your vendor contracts the best for your business position? Can you streamline your time-consuming workflow with an automated investment? Cloud-based software and automation can make things much easier on the time-heavy parts of your business.
Spend money in the right areas of marketing to boost your revenue. Offer new customer incentives or introduce new up-selling techniques to every order. Instead of stressing about how much a wage increase will cost your business, work out ways to get more customers, or introduce new ways to increase customer spend.
Considering that it is very costly to train new staff, you need to do what you can to keep your good workers on board. Offering flexible working conditions is a common way to keep your team happy. It may cause some minor inconveniences at times, but it is a cheap and extremely effective way to make people happy without adding excessive financial pressure to your business.
Setting goals for your employees will help them to know where they stand, and what they are required to do. It helps to set boundaries, as well as letting them know they have a purpose in your business.
Another truly great way to make your employees happy is to appreciate them, recognise their efforts and reward them for good work. Recognition keeps people motivated. Positive reinforcement is one of the best ways to boost employee morale, and it costs nothing. Not only does it make them happy, but it will give them more incentive to be an ambassador for your brand and become an active contributor to the expansion of your business.
Many employees are reluctant to spend money on further training for their employees out of fear the employee will leave once they have received their developed skills. Sometimes this can happen, but more often than not, employees who receive development and training required to increase their skill-set within their industry will stay within the business for a more extended period. Not giving your employees further training can hold your business back and make your business less of a rival to your competition. Employees who are continually developing new skills within their field will be far more likely to be happy within their role. Investing in professional development can be a smart business move.
Instead of hiring new employees every time someone leaves, offer the role to someone who already works for you. Whether the position is similar or completely different, your other employees will be happy knowing they have the option to move about within your business and might even work harder with the ambition of being promoted the next time a position comes up. It will also save money and time on new staff training.
Meeting with your employees regularly for a one on one chat not only lets them know you are interested in what they have to say, but it can also give them a chance to offer insight into how you can improve your business. Follow each suggestion up with recognition, and your business can become one big happy family.
The first step should be to find out what your employees want. Ask them what will make them happy. Each person will have a different answer, but it will give you an idea of what they are after. Assess the current workplace culture and see if there are any ways you can adjust it to create a better environment.