Take a break NZ—you’ve earned it

It’s that time of year when some businesses prepare for their annual close-down while others juggle work schedules and leave obligations to ensure they can keep operating. Whether you’re winding down for the year or gearing up for a busy summer ahead—it’s a good time to debrief on the year gone by and plan for what lies ahead in 2023.

2022 was an eventful year – the pandemic may have peaked, but the after-effects continue to ripple out, including staff shortages and supply chain disruption. The devastating war in Ukraine shows no signs of ending, and the economic fallout has been unexpectedly global—impacting everything from fuel to fertiliser.?

The Year in Business.

We saw some significant legislative changes in 2022, including Fair Pay Agreements, the Worker Protection bill and proposed updates to the Holiday Act. While hospitality workers, bus drivers and supermarket workers have begun discussions about FPA negotiations—the future of the legislation is uncertain, as National has promised to repeal the bill if elected.

The economic stats for 2022 are quite telling:

• The minimum wage rose in April 2022 to $21.20
• the annual inflation rate as of September 22 was 7.2 per cent,?
• The Reserve Bank raised the OCR to 4.25 per cent in November.?
• The June quarter saw the largest increase in salaries and wages since 2008.??

It’s no surprise that NZ businesses have been under enormous fiscal pressure this year.?

The unemployment rate is currently around 3.2% - its lowest level in the late 1970s. This is good news – but it’s also a strong indicator of the labour shortages that are testing many businesses around the country, and around the world.

It’s hard to believe that it was only in March this year that our international borders fully reopened. The inflows have been a welcome boon for tourism, hospitality and the primary sectors, but we’re still very low on those seasonal workers and backpackers that keep many industries viable.

Working from home (WFH) continues to be a sensitive negotiating point between job candidates and employers. However, there are signs that employers are pushing back on WFH expectations, with some larger organisations limiting home-based work to one day per week.

The Year Ahead

The Reserve Bank has been accused of deliberately engineering a recession with their forecasts for 2023 and further planned increases to the OCR. The recent sharp drop in house prices may be an early sign that inflation is peaking, and hopefully, we’re in for a soft landing.

For job seekers, a relaxation of immigration rules could see more international competition for management and executive positions. Still, worldwide demand for skilled people means we’re unlikely to see the larger immigrant numbers of past years.

As for the year ahead in HR, I believe tighter economic conditions may see leaders focus more on non-financial incentives to retain and attract good people. They’ll also need to communicate any company changes or restructuring well in advance to prepare their workforce for the challenges ahead. Hopefully, 2023 will also see more effort on equal pay initiatives and the fostering of more flexible and inclusive workplaces.

Have an enjoyable break, and cheers to 2023!