The changing landscape of the economy, the global situation, and rising inflation are just some of the obstacles business owners had to face in 2022. Businesses face endless challenges, and 2023 will not be any different.
We did a round-up of some of the upcoming trends of 2023 for businesses. Now, we are covering the potential challenges you may face as a business owner in 2023.
Difficulty reaching summer targets
The increasing cost-of-living pressures can stop New Zealand small businesses from making their summer sales targets. Australia, New Zealand, and the United Kingdom are experiencing the highest inflationary rates in more than 30 years. Consequently, small business owners and their employees are experiencing inflationary shock previously unheard of.
Managing increased wages and the cost of new supplies and equipment will also hinder business owners from reaching their summer targets.
Skill shortages
Accurately called ‘The War for Talent,’ employers are battling for skilled labour in New Zealand. Companies have gaps in their skilled labour that they desperately need fill. This can be done by opting to re-skill or upskill their workforce.
75% of employers globally are having difficulty finding talent. The current shortage of workers in New Zealand is expected to continue as the demographics change and fluctuate. The pandemic also pushed employees to evaluate their work environment and priorities, leading to mass resignations in several industries.
Public Holiday Survival Guide
The issue of public holiday pay for employees, including who is entitled to what rate and the impact of any leave, is a complex one for employers.
Seasonal slowdown
More than 9 in 10 businesses experience at least one month of negative cash flow each year. 1 in 4 businesses is cash flow negative for more months than cash flow positive.
For many small businesses, the seasonal slowdown can be a significant challenge. Kiwi small businesses receive almost 20% less annual revenues over January and February. Coming off a busy holiday season and the summer rush, this can be exceptionally hard for businesses to navigate. Business activity is slower, leaving employers with expenses but insufficient income to keep up with them.
Performance management
If your employees return from a long break, they are probably feeling the holiday blues. There can be cases of presenteeism, and a drop in productivity is expected.
If your employees have worked through the festive season, they may be experiencing burnout. Hospitality, retail, and travel employees will have worked long hours and dealt with excessive workloads. Healthcare and medical professionals would be overburdened too. They would be struggling to manage expectations or perform to their capacities.
It can get tricky to monitor and judge employee performance.
Changing regulations
The last few years have brought new regulations, changes, and obligations. 2023 will be the same, with employment law changes on the horizon for small business owners. Small business owners and employers are strapped for manpower and capacity to keep up with the changing regulatory system of the country.
Retaining staff
Small businesses can’t compete with multinational corporations or bigger businesses when it comes to attracting talent. They can’t offer perks or benefits like hybrid working or remote working.
They are forced to seek staff and talent within their geographical radius, enabling a heavy reliance on local manpower. Employers are competing for a rapidly shrinking talent pool, thus making retaining staff a hurdle.
Scale Your Business in 2023
It can be easy to lose hope with obstacles all around you. Peninsula has worked with 30,000 business owners across Australia and New Zealand, supporting them at every step of the journey.
We understand the troubles you face as a business owner. Our 24/7 Advice Line is available to answer all your questions and concerns.