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The engine room can’t run on its own banner

ACCOUNTANCY: With Matthew Bellingham, Bellingham Wallace

The engine room can’t run on its own

Matthew Bellingham is a Director at Hayes Knight, an innovative chartered accountancy practice, where he specialises in strategic planning and business improvement. –

Over the last four years the availability of people and skills to fuel Kiwi businesses has become a growing area of concern. This year a staggering 40%* of businesses turning over $1 million identified this as one of their top three issues and, in my opinion, is the one that will have the most impact on their future footprint. So why isn’t the solution as simple as finding the right candidate for the job?

The reality of the situation is that people are often the biggest cost to a business and in today’s leaner economic climate I believe owners are struggling to balance profitability with their role as an employer. In other words owners don’t have the capacity to pay a newbie’s wage now only to reap the benefits of a skilled team member in three to five years’ time, nor can they afford the rising cost of recruiting externally.

I’m all too familiar with the challenge. Every year we have a graduate intake because, as a business, we understand the need to take a long-term approach by recruiting young people now in order to grow and avoid what I call the valley of death. The valley of death is littered with failed businesses that were so focused on reaching their projected growth targets, without making sure they had the infrastructure or resources in place to follow-through. Like most things in business it comes down to careful planning. If we had put a hold on graduate recruitment back in 2008 and 2009 we would have found ourselves in one of two situations now: not being able to get through the work, or effectively being held to ransom by the market as we tried to find someone to plug the talent gap.
Where most business owners fall down is incorrectly believing that to manage costs they must do the work of an employee as well as the employer i.e. working in the business during the day and on the business at night. I believe this behaviour has become ingrained, because unlike the larger corporates many of New Zealand’s privately owned businesses are run by an owner who has, over the years, worked up through the ranks of their industry. They rarely employ a human resource specialist and therefore lack a lot of the essential people management theory and processes necessary to shift this behaviour.
The inability to employ new people or take them through the ranks is also affecting an employer’s ability to retain existing talent. Failure to take on new people will place additional stress on existing employees as they try to keep up with a growing work load – I say growing because that’s what every business should be aiming for. Eventually the stress will become too much and those that are left will hang up the towel. Likewise, making a habit of recruiting externally instead of investing in existing employees and supporting their journey through the ranks is not going to go down well. In both scenarios a negative message is communicated to the market about your societal role as an employer.
Could the part of this behaviour be related to the simple fact the today’s business owners (generation X / baby boomers) are just not overly enthusiastic about employing generation Y? Generation Y (sometimes referred to as “generation y bother) are characterised as self-interested, expect more for less and are not prepared to do the hard yards. I’m sure you can understand why the conflict arises. But for the time being, this is where the next round of employees will come from, so Kiwi business owners need to accept this, look beyond the generalised theories around generations and understand how to extract value from this exceptional group who are masters of technology and whose “want it now” approach is driving consumer behaviour. The alternative is to wait a few years for generation C to hit the workforce and let’s face it- time is money.

Make sure you are prepared and have options. Contact Matthew Bellingham on 09 379 1584.
*ANZ Business Barometer 2012

by Matthew Bellingham