Business Plus July

ISSUE 160 JuLY 2018

Building communities

- Timber business turning up the heat – p31

Employment law proposals - old thinking for a modern world Manufacturing must embrace digitisation Good leaders are future-focussed Sell part of your business to grow

P5, 6, 9

...AND MUCH MORE!

P7, 21 P11 P24

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2

BusinessPlus July 2018

On the cover: New chief executive at ITM,

BusinessPlus is published by The Employers and Manufacturers Association (Northern) Inc (EMA) EMA is the major shareholder of national lobby group, BusinessNZ.

Darrin Hughes (pictured), is strategising a serious challenge to competitors in the supply of timber and tools to the building trade. He says ITM’s 92 owner-operated stores also excel at being community-minded.

BusinessPlus is attached to EMA’s fortnightly email newsletter, e-report on July 11.

…..Read more, p31

Views expressed in BusinessPlus by non-EMA staff are not necessarily those of EMA. Editor: Mary MacKinven T +64 9 367 0939 M +64 21 636 089 E mary.mackinven@ema.co.nz Designer: Ripeka Mikaere Printer: SMP Solutions Distributor: Orangebox

ISSUE 160 JuLY 2018

Building communities

Complimentary for EMA members

- Timber business turning up the heat – p31

EmploymEnT law propoSalS - old ThInkIng for a modErn world manUfacTUrIng mUST EmBracE dIgITISaTIon good lEadErS arE fUTUrE-focUSSEd SEll parT of yoUr BUSInESS To grow

p5, 6, 9 p7, 21 p11 p24

...and mUch morE!

“Helping business succeed”

Contents CEO comment

5

EMA’s CEO Kim Campbell on: Please fix the Bill

Advertising sales: Colin Gestro, Affinity Ads, M + 64 27 256 8014 E colin@affinityads.com

Commentary Business confidence dropping under weight of ER changes

6

ISSN No. 1176-4953

Tech trekking across the US

7

EMA Head office – Auckland: 145 Khyber Pass Rd, Grafton, Auckland, NZ Private Bag 92066, Victoria St West, Auckland 1142.

P +64 9 367 0900 E ema@ema.co.nz

Untapped talent: How businesses can employ more young people

8

BusinessNZ CEO Kirk Hope on: Employer concern at employment bill

9

Seen @ EMA events in Auckland

10

Hamilton: EMA/ExportNZ Waikato 103 Tristram Street, Hamilton.

PO Box 490 Waikato Mail Centre, Hamilton 3240.

P +64 7 839 2710

Employment Trend in personal grievance claims bad for employers; but less so for EMA members

11

Legal: Top 10 investigation mistakes, and how to avoid them

12

Tauranga: ExportNZ Bay of Plenty Smart Business Centre, 65 Chapel Street, Bay Central, Tauranga, 3110.

PO Box 13202, Tauranga Central, Tauranga 3141.

P +64 7 571 0600

Leadership is about future thinking

14

Employment Chat - Q&A: Sick, sexual harassment, actually working – yeah, right

16

Hang on to older staff to avert worker shortage

18

AdviceLine: NZ 0800 300 362 AUS 1800 300 362 E advice@ema.co.nz Phone 8am-8pm weekdays for information about employment and more, plus referrals to EMA Legal lawyers and your local EMA consultant in employment relations and/or occupational health and safety.

Make the most of staff: train for the future

19

Educating your future workforce: review of school qualifications Help to digitise manufacturing

21

Visit www.ema.co.nz for owner and staff training programmes, conferences and other events, employer guides and templates, manufacturer services, media statements and submissions, export development and more EMA contacts Chief executive: Kim Campbell Membership manager: Kayne Franich GM Advocacy: Alan McDonald Public Affairs and Communications manager: Val Hayes GM Business Services: David Foley Employment Relations & Safety Manager: Paul Jarvie Finance & Technology manager: Paul Yeo Corporate & Building Services manager: Sheree Alcock Managing Solicitor EMA Legal: Matthew Dearing

X

In business IT: Avert the IT security threat within

22

Innovation: Spinning a tiny revolution

23

Sell/buy: Pros and cons of selling part of your business

24

International trade Time to transition to food safety legislation

25

Congratulations to winners of the Zespri Bay of Plenty ExportNZ Awards 2018

26

True grit: the cider success story

28

Staff profile 29

Meet Jordan Milligan, Membership Territory Manager

Member profile ITM: Timber! Giving competitors a run for their money

31

WINTER MEMBER BRIEFINGS: BOOK NOW!

32

+ Inside

Training Plus insert detailing July training courses

BusinessPlus is free to EMA members BusinessPlus July 2018

3

It’s time to act.

The Government is considering a Bill that threatens to undo many of the gains made in employment relations over the past few decades.

If passed, the Employment Relations Amendment Bill 2018 will not only seriously reduce your ability to engage and develop your workforce, but will also put the brakes on business growth.

Four aspects of the Bill are especially worrying.

1

Employers with 20 employees or more will lose the right to include trial periods in employment agreements.

2

This caused issues in the past. Thankfully, employers and unions today have mutually respectful relationships, and we expect most unions would still provide notice regardless of legislation. So why return the country to an “us-vs-them”, anti-growth mentality from the 70s?

Trial periods have given many employers the confidence to take on people without experience. 80% of employers used the 90-day trial period in the past year. This clause will discourage New Zealand’s larger employers from doing this and make it harder for young people to enter the workforce.

3

Forcing businesses to settle collective agreements even if they don’t or can’t agree.

The right for either party to opt out of the bargaining process is fair and equitable. Removing this right from employers creates an uneven playing field, which is not only unfair but also a recipe for bad agreements created under duress.

Allowing union reps access to workplaces without any permission.

4

Not allowing businesses a choice to opt out of a multi-employer collective agreement (MECA).

This compels businesses to join a MECA against their will. This is at odds with International Labour Organisation conventions which support everyone’s voluntary right to take part in collective bargaining or not. It protects the wishes of unions at the cost of freedom, productivity and growth.

If enough people voice their concern, the Government must listen. The EMA is already undertaking a major press, billboard and public relations campaign to fight for employers’ rights on this issue and asking the Government to “please explain”.

You can add your voice by emailing key members of Parliament with your concerns.

We can fix this Bill if we all act right now. Go to fixthebill.co.nz now, to have your say.

Authorised by Kim Campbell, 145 Khyber Pass Road, Grafton, Auckland.

ema.co.nz

ceo comment By kim campbell

Please fix the Bill - ER campaign

theme: “Old thinking for a modern world” We’re taking our campaign on shaping employment relations to the next level. This month you will see our advocacy efforts turn into activism.

Why? Because this is important for you and New Zealand if we want to have a high wage and high performing economy. We are deeply concerned that what is being proposed in the Employment Relations Amendment Bill 2018, plus a raft of other related legislation in the pipeline, is old thinking for a modern world.

Having just returned from leading a delegation to Chicago to attend the Internet of Things conference and seeing first-hand how US companies are dealing with integrating technology into the workplace, I can assure you the last thing we need is an industrial framework that holds us back. You can read about my trip on page 7.

That’s why we need you to embrace our “Please Explain” campaign and add your voice, your concerns and your company name to our efforts.

On page 4 you will see a version of an electronic note we will send you this month. We’ve made it as easy as possible to action, so that you can actively be part of trying to fix this Bill and then get on with running your day-to-day operation.

The aim of this campaign is to ask the Government to explain to you, the wider business community and New Zealand how the proposed changes will help grow our economy.

Particularly for smaller businesses and those in the regions, where coalition partner NZ First has targeted its policy efforts.

It seems out of kilter to develop the legislative framework, which is the vehicle that enables the Government’s strategic aims to be delivered, before the strategic analysis and discussion has been had.

It seems at odds to gain funding to plant a billion trees on one hand as a way to stimulate the regional economy, when on the other the proposed industrial relations changes seek to take us back to the 1970s. As Government’s coalition partner, NZ First holds the power to modify the most repugnant clauses in this Bill.

The Future of Work Forum has yet to convene. That is the proper forum to nut out the answers to many of the above questions. Therefore it seems out of kilter to develop the legislative framework, which is the vehicle that enables the Government’s strategic aims to be delivered, before the strategic analysis and discussion has been had.

Campaign tactics

That is why we need you. You can act now and implore any Government MP to modify the worst parts of the ERA Bill, and get the conversation back on track for New Zealand businesses.

Keep an eye out for billboards, press and online advertisements which call on all Government MPs to do the right thing by you. We will also be keeping you updated via our regular member communication vehicles, including BusinessPlus, e-report and Winter Member Briefings that are on this month.

Let’s be clear. We are not against reform. But we are against poorly drafted legislation that has been cobbled together in a hurried manner.

What we want is for the Government to pause, consider what the impacts of these changes could be, have an honest conversation around how placing more compulsion into the workplace will drive a modern, nimble economy and reflect on how we can work on this together in a constructive manner.

Bear in mind this is only the first step.

There is a raft of other legislation in the pipeline that will further complicate our industrial relations framework, for no clear gains that I can see. You can read more on this tangent, on pages 6 and 9.

New Zealand has one of the highest growth rates in the OECD and amongst the lowest unemployment rates in the world. Let’s keep it that way, and work together to build the workplace of the future.

Kim Campbell is chief executive of the Employers and Manufacturers Association kim.campbell@ema. co.nz

Kim Campbell is chief executive of the Employers and Manufacturers Association. Email kim.campbell@ema.co.nz BusinessPlus July 2018

5

commentary By alan mcdonald

Business confidence dropping under weight of ER changes The mantra that “Business doesn’t like a Labour Government” seems to be gaining acceptance as the reason for the disconnect between favourable economic conditions nationally and internationally, and lower business confidence in New Zealand.

The Labour Government factor may well play some role in that loss of confidence.

But there is a significant roll call of employment law legislative change that is also a significant factor in businesses putting a temporary hold on their hiring and investment plans, including: • The Employment Relations Amendment Bill • Pay Equity • Employment Relations (Triangular Relations) Bill • Equal Pay • Fair Pay Agreements • Contractors as Employees • The Future of Work • Holidays Act review • Hobbit law review Each of these issues is a focus for business, but combined they represent a significant rewriting of the employment relations landscape that has been the platform for New Zealand’s economic performance in the past decade – despite earthquakes and the Global Financial Crisis.

Add in an unknown legal framework for reducing emissions, an electricity pricing review, a tax working group and lingering questions around costing/taxing water, and you can understand why business is hesitant.

However, the current focus for the Employers and Manufacturers

Association (EMA), Business Central, Canterbury Employers and Chamber of Commerce (CECC), Otago Southland Employers Association (OSEA) and Business NZ, is the Employment Relations Amendment Bill and the consequences, intended or otherwise, that we see for business owners and employees alike.

Unwanted consequences In its current form and wording there are several issues our members tell us will have consequences that are neither wanted nor needed by employees or employers. These consequences include: • Passing on new staff member details to a union. According to the Privacy Commissioner this may breach the Privacy Act and raises questions around data security.

• Giving free access to the workplace to union delegates.

Federated Farmers submitted that the workplace for many of its members is the home, so a union delegate can just walk into your house. Police can’t do this and unrestrained access probably breaches health and safety regulations for employers and employees. It’s easy to see this clause also leading to tense standoffs in the workplace.

• Restricting the 90-day trial period to businesses with fewer than 20 employees. This will cost opportunities to get into work for those with difficult backgrounds, marginal skills or no work history.

• Compulsory inclusion in Multiple Employer Collective Agreements (MECAs) and compulsory acceptance of the outcome. A minimal number (two) of

employees in your workforce could force employers into a collective agreement where you must accept the outcome of negotiations.

That last point is at the heart of the system the French are desperately trying to unwind to make themselves internationally competitive and compliant with incoming EU regulation. It also breaches the International Labour Organisation (ILO) conventions on voluntary bargaining ratified by New Zealand’s Labour Party.

Our concern is that instead of looking forward, these proposals are a step back to compulsion, loss of flexibility and a “them v us” mentality that has no place in a future workforce focused on keeping New Zealand internationally competitive.

Labour’s own 2016 report, “The Future of Work”, identified issues such as needing a nimble workforce, continuous retraining, automation and technology, project-based work for multiple employers and flexibility as key to the future workplace.

Add an ageing workforce, skills shortages, the immigration mix and an ongoing focus on turning out work-ready graduates from high schools and education institutes, and the future of work looks very complex.

That’s the environment the recentlyannounced Future of Work taskforce will examine.

Surely it is better to wait for that taskforce to report back and design a workplace legislative framework to match its findings, rather than push ahead with adopting a framework that looks back rather than forward.

Alan McDonald is EMA’s general manager of advocacy. Email alan.mcdonald@ema.co.nz 6

BusinessPlus July 2018

commentary By kim campbell

Left: Kim Campbell on tour in the US, studying digitisation in manufacturing. Here he inspects robotic machine tools at Haas Automation California - one of the largest machine tool makers in the US. Above: An analogue solution to a digital problem: hammers come in handy when robots fail by a fraction!

Tech trekking across the US The words, Internet of Things, artificial intelligence, digital transformation and Industry 4.0 may be known to you, but their meanings for your business might not be obvious.

In June, I represented EMA in conjunction with The Manufacturers Network and Callaghan Innovation to lead a group of 37 intrepid manufacturers to find out how their peers in the US were integrating technology into their businesses.

The delegation attended the Internet of Manufacturing Conference in Chicago and visited technology laboratories and sites that included Trumpf manufacturing, the Haas factory, UniLabs and M Hub incubator for budding manufacturers.

I learned a lot! My key takeaways from this trip, which I believe every New Zealand business can learn from, follow.

1. First of all, New Zealand is not being left behind. In the US we saw companies of all sizes grappling with the same questions we are, such as: how does technology, the Internet of Things, robotics fit into our business now and in the future?

2. We face similar challenges to US companies. A digital strategy for your business is key to surviving and

Left: This is what a lights out factory looks like: the Trumpf metal fabrication factory includes laser welding, cutting, roboticised bending, automatic replenishment and machine learning, and virtual reality maintenance.

thriving in this new world. Our recent Digi_X Conference highlighted this need for a strategy and our US trek reinforced it. Only 15 per cent of US businesses have a digital strategy of any kind, and I am sure this will be similar in New Zealand.

3. There is huge potential to be unlocked. In the next 10 years there will be a 700 per cent increase in productivity. There’s US$100 trillion of value to be generated.

4. This will not create wholesale unemployment. Rather, it will create jobs. I think the key here is that this technology will take over tasks, not jobs.

But naturally, you will need to bring your workforce with you. What we can predict is that jobs that are labour-intensive, repetitive or lower skilled are likely to be replaced by technology – whether that’s by robotics, artificial intelligence or automation.

There will be other jobs that come along, and they will require a higherskilled candidate.

But a major question is how we as a society adjust for this change. This goes to the heart of our education system: how we enable life-long learning and what this means for our young people just entering the workforce, as well as our mature workers who are not retiring anytime soon.

5. The forth industrial revolution is here, now. It was clear from this trip that the much-talked-about Industry 4.0 is here. The growth of digitisation in our day-to-day operations is inevitable.

However, one of the constraints is cyber security. It’s one thing to have the knowledge, it’s another to be able to use it safely without giving away your competitive edge or private information.

Contd on pg25

Kim Campbell is chief executive at the Employers and Manufacturers Association. Email kim.campbell@ema.co.nz BusinessPlus July 2018

7

commentary Byabbie reynolds

Untapped talent: employ more young people New Zealand’s youth unemployment rates are stubbornly high and worrying.

Zealand’s young people in work, and to have a positive impact on social issues.

In March this year, nearly 13 per cent of all 15-to-24-year-olds were NEET – an official term that means “not in employment, education or training”. But nationwide, the total unemployment rate is less than half that, at 4.4 per cent.

We’ve learnt that even small changes to the recruitment process can have a significant social impact. But it’s hard for businesses to quantify this.

The differences between these unemployment rates are a real puzzle.

Many of the businesses I speak to are in a war for talent, and are suffering business-critical staff shortages.

They are finding youth employment is not only an investment in the future of the workforce, but also a demographic that brings fresh ideas and perspectives.

Young employees can help develop services and products for the youth market and boost your business’ reputation, and they often bring local knowledge and technological knowhow.

We have run a “Social Impact” programme, working with members to help them employ and retain vulnerable young people.

You might wonder why a Sustainable Business Council concerns itself with youth employment. Sustainability is often misunderstood as being focused solely on the environment, but the concept is actually much broader and encompasses people, the community and social issues.

Our members tell us they want to work together to support New

We still have work to do to bring sustainability expertise and the human resources functions closer together, to co-create success and measure it.

Tips for hiring Early engagement and relationshipbuilding can really pay off, as you build a positive reputation with young people, and expose them to a job they might not have considered before.

Approach your local school, polytech, marae, church, food market or university, and offer to meet young people in places where they gather.

Talk to them about your business and the kinds of roles you can offer them.

Invite them to an onsite workplace visit and consider offering paid or unpaid work experience.

Or contact your local Ministry for Social Development (WINZ) office.

Case studies Z Energy stations nationwide employ New Zealanders from many different backgrounds and generations, reflecting the communities in which they operate. And in the Hawke’s Bay and Wairarapa, retailer Hamish Waddington believes one of the keys to successful recruitment and retention of young staff is talking.

He suggests business owners and operators talk to them about their expectations, family and background, and help them plan for the future, if that’s what they want. Hamish is currently helping one staffer plan to save for his first car. He says this sort of interaction is always time well spent.

Countdown also employs a lot of young people. One third of its 18,500 staff are 25, or younger.

They say a good way to attract young job seekers is to work with local secondary schools and attend university career fair days to raise awareness of the business, and ensure it is seen as an exciting place to work offering plenty of opportunities and a passion for hiring young talent.

Countdown has a fully-subscribed graduate programme and a range of apprenticeships and development opportunities to support and train young people to rapidly move across or up the business. And Countdown is currently working with an organisation called YESS (Youth Empowerment and Support Services) to provide support and care to young people from complex backgrounds, who are starting out in their first jobs.

Hiring young people can be challenging. But what we’ve learnt is, if you give them time and trust, and show them what’s possible, they will often stick around and your business will reap the rewards.

Abbie Reynolds is executive director of the Sustainable Business Council, a division of BusinessNZ. Visit www.sbc.org.nz 8

BusinessPlus July 2018

commentary By kirk hope

Employer concern at employment bill The planned legislation would make life easier for unions, but not for employers or employees.

Employers need to be informed about a prospective law that we believe will be unhelpful for New Zealand workplaces.

The Employment Relations Amendment Bill, a large, complicated piece of legislation, is currently being scrutinised by Parliament’s Education and Workforce Select Committee.

The Bill contains many parts that would negatively affect workplaces in different ways.

It would prevent larger businesses from using trial periods in employment agreements.

It would require all employees to take meal and tea breaks at the same time.

The Bill would introduce complex rules governing unions, collective agreements and their roles in the workplace. For example, the Bill would allow union reps to enter any workplace at any time without permission. Employers would be required to provide paid time off work for union delegates, and union delegates, rather than the employer, would decide how long they will take off and when. And employers would be required to give details of new and prospective employees to a union, in a breach of their privacy.

Perhaps the most concerning elements of the Bill concern collective agreements.

Collective agreements reign supreme There is a risk that individual employment agreements would not be allowed to include better pay or conditions than a collective agreement contains, at the same workplace.

The Bill would force employers to settle collective agreements, even if they did not agree with the terms being requested. This would be a breach of International Labour Organisation conventions, which state that bargaining should always be voluntary. We think that removing this right from employers would create an uneven playing field – not only unfair but a recipe for bad agreements created under duress.

Employers would be forbidden from opting out of negotiations towards a multi-employer collective agreement.

Given that employers could be joined with the negotiations against their will (following a request by a union), the fact that employers could then be compelled to settle the negotiations would amount to further duress.

Only unions benefit None of these provisions of this new legislation would help businesses or the economy to grow.

The planned legislation would make life easier for unions, but not for employers or employees.

Unemployed people would suffer from fewer job opportunities, with the reduction in availability of 90-day job trials.

Together, these new rules would give more power to unions, discriminate against non-union employees, and make it harder for businesses and jobs to grow.

The sum total of these changes would see reduced trust and flexibility in the workplace.

This may sound like a lot of criticisms of the Bill, but the reality is that it would harm New Zealand workplaces.

What is particularly concerning is the fact that the Employment Relations Amendment Bill is so complex and far-reaching, and very hard to understand. An ordinary person reading the Bill would not be able to get a sense of the large changes that this legislation will effect in the workplace.

There has not been an information campaign to educate the public on what the new legislation would do and why it is needed. Business does not believe the legislation is needed at all.

I hope the select committee considering the proposed legislation will take seriously the concerns of employers and other groups objecting to it.

The Bill is also discussed on pages 5 and 6.

Kirk Hope is chief executive at BusinessNZ. Visit www.businessnz.org.nz BusinessPlus July 2018

9

Seen @ Manufacturers Forum in Auckland

Gareth Evans [Farra Engineering] and Nick Cairns [Shape NZ]

Roland Auret [Contour Engineering] and Paul Binner [Methven}

Marc Simkin [Assa Abbloy] and Ivo Gorny [Callaghan Innovation]

Donna Purdue and Robyn Henderson [Ministry of Business, Innovation and Employment]

Seen @ Employment Relations Conference, Auckland

Brenda Williamson and Thiea Bell [Braemar Hospital]

Claire Drake [City Care] and James Wilson [Oji Fibre Solutions] 10

BusinessPlus July 2018

Russell Holland [Champion Flour Milling] and Peter Elder [EMA]

Cerri Goodwin [BEP Marine] and Lynn Hazlett [Uroxys]

Kelly Hill and Greg Jones [Howard Wright]

Nick Collins [Metals NZ], Heath Bowman [Pics Peanut Butter] and Troy Coyle [HERA]

Scott Simpson [Opposition Spokesperson for Workplace Relations and Safety] and Margaret Gracie

Simon Cooke, Ruth Isaac and Nathaniel Christensen [Ministry of Business, Innovation and Employment]

Mark Lennox [Waitemata District Health Board] and Richard Wagstaff [NZ Council of Trade Unions]

Emma Redaelli [Te Korowai Hauora O Hauraki] and Petra Sutherland [Buckley Systems]

employment

Trend in personal grievance claims bad for employers; but better for EMA members The overall picture of personal grievances cases for 2017 shows a sharp increase in the average award to employees for hurt and humiliation compared to the year before.

Employers’ legal costs also increased substantially.

In addition, the high employee success rate remains consistent with 2016.

But the good news is, EMA members experienced a substantially higher chance of defending a personal grievance (PG) claim, with 41 per cent of successes being members compared with 17 per cent of successes being non-members.

Every year EMA analyses the PG decisions of the Employment Relations Authority to get a sense of emerging trends. More detail follows.

Hurt and humiliation

Employee success rate The number of grievances has remained steady, at 226 in 2017 compared with 229 the previous year.

Employees’ success rate has also remained steady with 70 per cent winning their cases compared with 72 per cent in 2016.

In Wellington, employees had a 46 per cent success rate, compared with Auckland at 79 per cent and Christchurch at 73 per cent.

The most difficult grievances for employees to establish were constructive dismissal, with a 45 per cent success rate; and the easiest to establish were performancerelated grievances with 83 per cent of claimants being successful.

Most PGs occur in relation to the first 12 months of employment, and an employee’s chances of success are highest within the first 12 months (at 83-95 per cent on average).

In 2017 the average national award for hurt and humiliation increased 24 per cent to $8,711.00. Auckland and Christchurch jurisdictions contributed to this increase, up 38 per cent and 15 per cent respectively. The average award in Wellington reduced by 6 per cent compared with 2016.

Cost to win/lose

Hurt and humiliation awards were highest, on average, in cases involving “constructive dismissal” (feeling forced to resign), at $9,839 nationally. At the lower end of the scale were “disadvantage” cases where the national average award was $6,398.

An employee risks losing an average of $18,560 if they are unsuccessful, but stand to gain an average of $17,866 if they win.

Hurt & Humiliation awards

Personal grievances continue to be a lose:lose situation for employers, with an average pay-out to the Authority of $60,665 if they are unsuccessful, up from $50,501 in 2016.

The average pay-out is $24,239 if they “win” (up from $11,781 in 2016).

Average legal costs have nearly doubled for employers, at $31,384 (from $17,269 in 2016), due to a small number of cases with particularly high legal costs.

2017 Average hurt & humiliation award

2016 Average hurt & humiliation award

Auckland

$8,828 (+38 per cent)

$6,415 (+13 per cent)

Wellington

$5,949 (-6 per cent)

$6,325 (+16 per cent)

Christchurch

$9,707 (+15 per cent)

$8,459 (+13 per cent)

National

$8,711 (+24 per cent)

$7,007 (+10 per cent)

X

Employees’ costs have increased slightly to $11,415 (from $10,755 in 2016). Employees stand to recover on average 40 per cent of their costs when they are successful in their grievances, compared with employers who recover on average 23 per cent of their costs when a grievance is defended.

Employer’s cost to lose a PG 2017 Average

2016 Average

Hurt & Humiliation

$8,711

$7,007

Lost wages

$15,954*

$15,470*

Employer Legal Costs

$31,384

$17,269

Employee Legal Costs

$4,616

$10,755

Total

$60,665

$50,501

*Labour Market Statistics Dec 2017 quarter

Employer’s cost to win a PG 2017 Average

2016 Average

Employer Legal Costs

$31,384

$17,269

Less employee contribution

$7,145

$5,488

Total

$24,239

$11,781

Reinstatement A total of eight PG claims for reinstatement (into the company, as a remedy) were made in 2017, with three of these claims actually resulting in reinstatement. In 2016 there were 15 claims, of which 11 were successful.

A recent proposed amendment to the Employment Relations Act 2000 seeks to return the remedy of reinstatement as the primary remedy for a personal grievance. If this law passes, it is likely to have an effect on the reinstatement rate in the future.

For more information or assistance with a personal grievance claim, phone EMA’s AdviceLine at 0800 300 362 (in New Zealand) or 1800 300 362 (from Australia) or email advice@ema.co.nz

BusinessPlus July 2018

11

employment By beverley edwards

Top 10 investigation mistakes, and how to avoid them Bullying. Harassment. Serious misconduct. Workplace investigations are becoming increasingly common due to the growing number of cases arising from allegations of unacceptable workplace behaviour, and due to the expectations of how employers manage those allegations.

Employers must ensure that the process and the outcomes are fair, transparent, legally compliant and defensible. To err is to risk a Personal Grievance from either the complaining employee or the perpetrator.

There is no “model investigative process”, as each situation needs to reflect the allegations, the parties and the employer’s specific workplace.

Employers must ensure that the process and the outcomes are fair, transparent, legally compliant and defensible.

To err is to risk a Personal Grievance from either the complaining employee or the perpetrator.

However, I have highlighted the 10 main mistakes employers make, and need to avoid to ensure that their actions and findings are solid and defensible. Those 10 risky areas are:

1. Not following the process Every employer should have a grievance or complaint policy (and if you do not you should consider drafting and implementing one as a priority.)

12

BusinessPlus July 2018

The best policies avoid mandating that specific steps must be followed, reserve discretion and allow flexibility to cater for different circumstances.

Deviation from the process that is set out in the policy should only occur with sound reasons for doing so, and the consent of those involved in the investigation should be obtained. This minimises the risk of technical objections and challenges on this point at a later date.

2. Failing to plan (planning to fail) Failing to plan an investigation can affect the outcome and defensibility of findings. This planning involves: •

Identifying all potential witnesses;

•

Working out the order of interviews;

•

Working out the mechanics of the interviews;

•

Whether to suspend the alleged wrongdoer;

•

Choosing the right investigator.

3. Not choosing the right investigator The selection of an investigator will depend on the nature and seriousness of the matters and the extent of the resources (time and personnel) required.

An internal investigator may not have sufficient experience nor potentially attract legal professional privilege and confidentiality that a lawyer does.

It may be prudent for an employer to engage an independent third party to conduct a workplace investigation, to establish a process that is perceived as independent and free of bias.

Within the Personal Grievance regime, unreasonable refusal to allow the opportunity for an employee to have a support person is almost indefensible.

4. Confusing investigator as decision-maker The investigator should avoid acting as decision-maker on anything other than very minor matters. Separating the investigation function from the decision-making function is prudent.

5. Relying on “untested” information Information should be tested as far as possible, and if untested information is going to be relied on, the investigator should be able to justify why that reliance was reasonable in the circumstances.

6. Not knowing the role of a support person Within the Personal Grievance regime, unreasonable refusal to allow the opportunity for an employee to have a support person is almost indefensible.

The case law in this area has clarified that a support person’s role is limited to assisting the relevant employee. An investigator has the right to caution or silence a vocal or obstructive support person and, in extreme cases, suspend or terminate the interview.

7. No logical order Whilst it is not fatal to have to reinterview witnesses, having an order to the process will minimise this potential.

employment

This is usually best achieved if the order of interviewees starts with those who know the most. This can also identify additional interviewees or evidence.

8. Morphing the investigation and disciplinary steps The disciplinary process only starts when the investigation findings are finalised and accepted.

The investigator should not conduct the disciplinary hearing, as perceptions of bias and predetermination are hard to rebut.

9. Not dealing with the findings and implementing recommendations (if there are any) An employer who fails to act on the recommendations risks the following outcomes: •

being seen as excusing unacceptable workplace behaviour;

•

undermining the integrity of the complaint or grievance procedure;

•

Personal Grievance claims if bullying or harassing behaviour continues;

•

restricted defence that they took all reasonable steps to prevent the conduct.

10. Not learning from mistakes Finally: it is a sensible employer who reviews the investigation once it is completed. Were there lessons to be learned? What were they? For example: •

Was the relevant process easy to follow?

•

Were employees able to access and rely on the policy, or was there confusion?

•

Were there any gaps in the company’s policies, flaws in processes or other failings?

Key takeaways for employers It is important that employers carry out investigations properly, as a failure to do so can compromise how they defend the matter, if it progresses to litigation.

A best practice investigation will be “sound, appropriate and responsive”, and will provide the employee with every opportunity to present their version of events.

There are benefits attaching to engaging an external investigator to conduct workplace investigations, including that participants in the investigation process are likely to be more confident that the findings of an external investigator are unbiased, and accordingly the parties may be less likely to challenge them.

EMA Legal is available to conduct investigations and provide recommendations that are practical and which reduce the risk of litigation.

Beverley Edwards is a senior solicitor at EMA Legal, in the Waikato. Email Beverley.edwards@ema.co.nz

BusinessPlus July 2018

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employment By ralph stock

Leadership is about future thinking An essential quality that distinguishes true leaders within an organisation, is their ability to intuitively look to the future. In doing so, they are able to determine strategies that deal with challenges and spearhead initiatives to ensure commercial permanence, competiveness and growth.

2. Strategist (“Where are we going?”)

The capacity and mindfulness to envision the future sets leaders apart, differentiating high performing leaders from commonplace leaders.

3. Executor (“How will we ensure that we reach our goal?”)

Whether the title of position refers to Manager or Leader, it is important that the incumbent acknowledges responsibility for managing and leading those under their authority.

As a manager they are concerned with the logistics of the now, and as a leader they are a visionary providing future direction.

Warren Bennis, a highly regarded pioneer in the field of contemporary leadership studies, is quoted as saying: “The manager accepts the status quo; the leader challenges it.”

It is widely accepted that those who are responsible for influencing a group of individuals to achieve common goals and objectives, need to be both manager and leader.

In their book, Leadership Code, the authors Dave Ulrich, Norm Smallwood and Kate Sweetman, make reference to the following five rules to lead by: 1. Personally proficient (“How can I continually improve as a leader?”)

Leaders are consistently developing their professional, physical, emotional, intellectual, and spiritual well-being; improving their leadership attributes through personal insight.

Leaders are focussed, and committed to work collaboratively with others to implement strategies that establish initiatives that take their organisation from the present to the desired future.

Leaders understand how to make change happen, assign accountability, delegate appropriately, and make sure that their team members work well together.

4. Talent manager (“How can I attain full potential from the individuals within my team?”)

Leaders engage people to get things done now, and in a manner that generates intense personal, professional and organisational loyalty. They empower people to be the best they can be.

5. Human capital developer (“How can I future-proof the organisation through succession planning?”)

Leaders have foresight and commitment to building the next generation. They make sure the organisation has the longer-term skills, knowledge and behaviours to ensure ongoing and future success.

Key attributes of futurethinking leaders In addition to observing the five rules above, future-thinking leaders have these personal attributes:

bold and calculated decisions, driven by strong vision and commitment to fulfil the organisation’s mission.

• Action-oriented: Realising that vision and ideas are of no use unless collaborative and affirmative actioned is implemented, leaders action agreed strategies to achieve the desired outcomes and future success.

• Solution-focussed: Being solutionfocussed, leaders do not become preoccupied by problems; they put their energy into proactively finding suitable solutions.

• Ongoing commitment: When strategies do not work they admit the failure and commit to moving forward, focussing on their goals, motivating and inspiring their team through displaying confidence and determination to success.

• Emotional intelligence: Developing the ability to identify their emotions and being able to control and evaluate these emotions; being empathetic to the emotions of others and becoming active listeners; and encouraging two-way communication that influences acceptance as they drive futurethinking strategies.

As I observe the behaviour of leaders, I am often reminded of a quote by the motivational speaker and author Brian Tracey: “Leaders think and talk about the solutions. Followers think and talk about their problems.” This quote also defines the difference between those who are leaders and those who think they are leaders.

• Audacity: Being audacious enough to be forward-thinking and goaloriented; taking initiative in making

Ralph Stock is an EMA trainer specialising in leadership. Training courses can be tailored to any business’ needs.

Email tailored@ema.co.nz 14

BusinessPlus July 2018

Business Training At Its Best Whether you need to up skill your managers, get Health and Safety Reps up to speed or help your sales team improve their skills, the EMA has something for all areas of your business and offers business training at its best.

Over 700

Training events presented each year

Over 7000

People learn through EMA courses each year

Over 1000

Companies attended EMA training

Around 35

Conferences & networking events to choose from

For the latest training courses, visit ema.co.nz

employment chat

Sick, sexual harassment, actu Q. It’s school holidays this month and I am expecting a lot of “sick leave” from parents. How can I deal with that? – Gary Dear Gary Are you suggesting that staff lie about being sick and abuse the privilege of sick pay?

Perhaps staff need to be sure they can take sick leave without fear of disbelief. Under the Holidays Act 2003, they may already be entitled to paid sick leave.

Rather than staff having to use their own sick leave to look after their children, which they are fully entitled to do under the Holidays Act, maybe flexible work can be offered and discussed with staff on a temporary basis; this can include altered hours or even their being able to work from home for a period of time.

If you have reasonable grounds to believe that the sick leave is not genuine, you may have the ability to request Medical Certificates under the Holidays Act. The ability to request certificates under the Act, only applies to entitled sick leave provided for under the Act. You may require an employee to produce proof of the sickness or injury for which the employee is taking, or is to take, if the sickness or injury giving rise to the leave is for a

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BusinessPlus July 2018

period of three or more consecutive calendar days. You may also require proof when the employee is away for less than three consecutive calendar days, provided that you inform the employee as early as possible that proof is required and agree to meet the employee’s reasonable expenses in obtaining that proof.

These expectations of yours should be spelled out transparently in employment agreements or policy documents in advance, not made up on the spot.

Or, if someone appears to be taking lots of sick leave that is well above the minimum legislative entitlements and their absences are having an impact on your operations, you may be able to begin a formal process of managing their leave. Call Adviceline for guidance on this process.

Q. A staff member has raised a formal sexual harassment complaint against me, which is total nonsense. I feel fatherly towards her and merely put my arm around her shoulders in an encouraging and friendly way because she is a star employee, who performs a vital role in my business.

Now she makes me feel like a dirty old man, and I’m not; I can no longer feel comfortable around her – should I let her go? – James Dear James The worst thing you can do is “get rid of her”. Imagine justifying

letting a star performer go after she has complained about sexual harassment involving you: the Authority may easily consider it to be an unjustified dismissal in that it was not what a fair and reasonable employer could have done in all the circumstances. They would note that you failed to investigate and respond appropriately to the employee’s complaint and failed to keep her feeling safe in her workplace.

You would be at risk of a personal grievance if you were to terminate her employment.

Restructuring or performance managing her would only attract negative attention to yourself.

Neither of these two options would meet the test of justification in the Employment Relations Act either, and would put you at risk of a grievance, as you yourself say she is a star employee performing a vital role.

You could be facing big fines, big reputational damage for the business and loss of other staff who would not want to work for a “sexual harasser” once they find out about the accusations.

As to putting arms around shoulders: physical contact in the workplace is a no-no because it can so easily be unwanted, or else misinterpreted. In your case, add in the cross-gender factor and the power imbalance (employer and employee, and the

ually working – yeah, right age difference), and you have a recipe for perceived harassment.

Even if your motive was non-sexual, it could easily be perceived as patronising and harassment.

Since this employee has raised a formal complaint, you as the employer have an obligation to formally investigate this process, in accordance with any bullying and harassment policies. Since the allegation is made against you, it would be appropriate if someone else who has authority in the business conducted the formal investigation process. Alternatively, you could get an external consultant. At this stage, it is important to offer an “employee assistance programme”.

This is a tricky and incredibly sensitive situation. We recommend talking to one of our employment relations consultants or EMA Legal team to understand the legalities around this.

Q. We have a staff member who is always on Facebook on our monitored work computer, not doing much work.

We have already advised all staff of our expectations re Facebook use and completing tasks, in the past. We are wanting to take tasks away from her so that they will be completed. How do we deal with this? – Simone Dear Simone You should not be taking away tasks from her. You have to address the problem for what it is, through a proper process.

You should invite the employee to a meeting to discuss your concerns about her performance. Provided you have a policy that allows you to monitor work computers, you may refer to time logs about how much time she spends on time-wasting websites and bring this to her attention in the meeting, and ask for her comment.

You have to be careful that you do not breach her privacy though. At

the end of the meeting, you need to advise her of what she needs to do going forward. She should also be advised that if she continues to go on Facebook and underperforms, that you may have to begin a formal performance management plan.

• By the EMA communications team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional.

You can also find information at www.ema.co.nz such as the A-Z of Employing – a manager’s guide on specific employment topics.

BEST E H EST T YOU WE T R O F ...

The information in this article is a guide only and not to be used as business advice without further consultation.

EMA members can start with our free AdviceLine team at phone 09-367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am8pm weekdays NZ time; or email advice@ema.co.nz

Call 09 966 74 74 www.horizonrecruitment.co.nz

BusinessPlus July 2018

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employment By paul jarvie

Hang on to older staff to avert worker shortage Constantly in the media are the issues connected to a changing workplace such as artificial intelligence and automation (not to mention employment law!). While the detail might not be clear, we do know that what we are doing now and how we are doing it will be different in 5, 10, 15 years’ time.

Compounding all these future changes and challenges is the shortage of skills and labour right now.

The problem is that there is no quick fix for these issues. We can’t simply produce more workers - this takes about 18 years from birth to working age, plus any educational years. Immigration can and does backfill the gaps but the Government has repeatedly indicated this is not sustainable nor their policy.

So what does the New Zealand worker-age demographic look like?

In theory, age demographics are shown as pyramids, ie, wide bases and a coning top representing a large young population with the normal and somewhat predictable, smaller older population. However, the New Zealand picture is more of a rectangle sitting on one of its short sides, with indentations (narrowing) at the bottom and an increasing ballooning at the top.

What does this mean? Simply that we have fewer children being born and the older generations are living longer. The middle ground is not expanding (flat sides) and could be described as a set number of bodies (or workforce).

If we are to have a growing economy producing more, higher wages and a vibrant service industry (the biggest growth sector), where will the workers come from?

Understanding the wealth of knowledge, skills and experience within your older staff is the first step. Second is to find a way to capture and use this information that suits both you and the worker.

Milking older workers Employers need to start seriously looking at their staff demographics, along with skill sets, future staffing needs and their customers’ age profiles.

An “older worker” according to fellow workers is generally 55-plus, or to recruiters, around 47 or 48 years old!!

Older workers who reach 65 - the age of entitlement for Government superannuation but NOT retirement - will often continue to work. The reasons are many and varied but often come down to the following: 1. They need for financial concerns, 2. They simply wish to continue to contribute to the business and be seen as useful, 3. And to remain part of the team.

Their knowledge, skills and experience are difficult to capture, so when they leave, all that goes with them.

Flexible work times are also very important.

Age-related myths are commonplace, such as “Older workers are not IT savvy.” Yet older people are using cellphones and portable computers more than ever; active on YouTube, Skype and the like. For employers, it’s simply a matter of providing a training plan that reflects older workers’ ages and paces of learning. Using a hi-tech, interactive, jargon-filled program is not likely to work.

Older workers will give the business loyalty, passion and punctuality. They will stay with you, as compared to, say, younger staff who may well leave after two to three years on their quest to become the CEO overnight.

Understanding the wealth of knowledge, skills and experience within your older staff is the first step. Second is to find a way to capture and use this information that suits both you and the worker.

Businesses are well advised to begin discussions with staff early (eg, at performance review times) about the training they need, the training you think they will need to remain employable and their thoughts about older work and flexible work.

In the absence of doing this preparation, businesses will be scrambling for staff and competing with each other for any, including older, workers. You must plan now, as this is a slow motion car crash that has already begun to go wrong.

Turning all that around, employers can utilise the knowledge, skills and experience of older workers in a manner that suits both parties.

We have a perfect storm.

Paul Jarvie is EMA’s manager of employment relations and safety. Email paul.jarvie@ema.co.nz 18

BusinessPlus July 2018

employment By paul jarvie

Make the most of staff: train for the future Staff training is driven by various needs such as for skills or quality, or as a compliance necessity.

However, training staff is often viewed as expensive, timeconsuming and at worst, a complete waste of time and money.

However, under health and safety legislation, training of staff is mandated. It is the PCBU’s (enterprise’s) responsibility to ensure that all staff are trained in the relevant topics to complete their work safely, ie, without risk to themselves or others.

Safety training begins at the onboarding time. The induction process is an incredibly important time for a new employee. It is here they learn, see and feel the company culture, on top of all the other information crammed into the induction timeframe. If the person(s) conducting the induction miss sections out or in some way downgrade the process, the message to the new employee is “standards do not apply here and short cuts and rules-breaking are condoned”.

Find out what is needed All the other necessary skills, safety and quality requirements, visions, policies and systems are programmed for the employee to learn or participate in once they are on board.

Underpinning this should be a training needs assessment that identifies what this person needs, relevant to their position. Training just for training’s sake is not good business.

Training needs analysis should include some component of growth, development and expansion of soft skill sets. Soft skills are going to be required in the coming years as Artificial Intelligence and automation rolls out. The future of work is not known; however, we know it will be different from now.

undertake the task, and, b) either a relevant qualification evidencing the person’s possession of that knowledge, experience and skill or, if the person is an employee, a certificate issued by the person’s employer evidencing the person’s possession of that knowledge, experience and skills.”

Surely, understanding the need to keep and maintain staff going forward is an investment in the future.

The person’s willingness to undertake the activities in accordance with agreed workplace standards, rules and procedures is also relevant.

The next most important task is to keep up-to-date records. This is necessary when and if things go belly-up.

When an inspector is investigating an accident or injury event, his second question is, “Show me your staff’s training records and their supervisor’s records”. If these are not immediately available and in good order this will set off alarm bells to check what else might not be working.

Maintaining training records can be resource-rich but not as hefty as any penalties that may be awarded via the courts. We often see that when times get tough or staff are not replaced, record-keeping is the first to suffer.

The next issue to consider is if the person is competent to undertake the job/task you are asking of them, after their training. Competency is not training. Training, experience, feedback and qualifications are all part of the continuum of competency.

Training systems must also be refreshed and updated; and include retraining schedules.

The whole training system must be integrated into the entire work schedule to avoid taking staff off the line at inconvenient times.

Getting staff to sit around and talk about training is also very worthwhile. In a safe environment staff can often provide useful feedback about topics, presenters, training notes, times, etc. Merely completing an evaluation form on the day of training is shown to have little value. Training is expensive, so getting more bang for your buck is good business.

Remember that within New Zealand the average reading age of employees is between 7 and 12 years old. Can staff even read and understand your training material?

Getting some professional help to define and decide your training needs is very worthwhile.

Worksafe NZ uses the following definition to describe a competent person: “The person has, a) the relevant knowledge and skill to

Paul Jarvie is EMA’s manager of employment relations and safety. Email paul.jarvie@ema.co.nz BusinessPlus July 2018

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Our series of Employer Guides provide accurate advice and guidance on the following employment matters: • ACC

• Discipline & Termination • Diversity

• Drug Testing

• Employees & Technology • Harassment & Bullying • Health and Safety

• Leave Entitlements • Payroll Essentials • Privacy

• Recruitment • Unions

Guides are now only available on USB or on the website for download.

NZ 0800 300 362 AU 1800 300 362 shop.ema.co.nz

ur or yo f T b ay S ra d +G G to 9 B $9 US ly on

Employer Guides 2018 Update

Educating your future workforce EMA is taking part in the Government’s review of secondary school qualifications, in recognition of their importance in developing the future workforce.

We are writing a submission on the review, and want members to let us know what they think about the education system, to guide our comments.

EMA as part of BusinessNZ has also been involved in developing the ideas in the review, alongside the employability skills framework, and ongoing efforts to improve literacy and numeracy of all New Zealanders.

The Minister of Education, Chris Hipkins, has appointed an Advisory Group to come up with some innovative ideas for possible changes to the National Certificates of Education Achievement (NCEA), New Zealand’s main, senior secondary schooling qualification.

The Working Group created six “Big Opportunities” which form the basis for public engagement, open until September 16. Information on these

opportunities can be found at https:// conversation.education.govt.nz/ conversations/ncea-have-your-say/ big-opportunities-he-aria-nui/

Relevant to employers • Big Opportunity 2 looks at potential changes to the literacy and numeracy requirement of NCEA, ie, reading, writing and arithmetic that are considered the basic skills required for life and work readiness.

But what level is required for people to be work-ready, and should the requirement include skills such as digital literacy or citizenship?

This is a great opportunity for employers to let the EMA or the Ministry know what their experiences and expectations are of NCEA graduates. Do you think school leavers have the basic skills required to successfully leave school and start employment, or do the requirements need strengthening?

• Big Opportunity 3 looks at providing an opportunity for every learner to explore a potential pathway to study, training or employment as part of

By Michael burgess

employment their NCEA at levels 2 and 3 (ie, final two years, or the two leaving years, at secondary school).

This pathway could be anything from working at a local business, to studying university courses.

While some students receive an opportunity to get work experience at school, this could be a significantly wider provision. Making this possible would likely require significantly increased partnerships between schools and businesses and industry.

• Big Opportunity 5 looks at how a young person’s Record of Achievement shows them, and potential employers, what they have learned and what they can do.

Currently some find it difficult to understand what someone’s NCEA record says about their capabilities.

Changes could include recognising other learning or achievements, or changing the presentation of the current content in the Record.

For more information and to have your voice heard, please contact Mike Burgess at Michael.burgess@ ema.co.nz by August 15.

Help to digitise manufacturing Manufacturers have help to digitise their businesses, with a new Industry 4.0 Network Guide for New Zealand developed by Callaghan Innovation with support from the EMA and The Manufacturers Network.

The Guide was presented at the Manufacturing and Design Conference during New Zealand’s Tech Week 2018 in May. The conference was one of 540 events held in 24 locations across New Zealand during Tech Week, engaging thousands of attendees on hundreds of topics from Artificial Intelligence (AI) to the future of food.

The three-page Guide is a navigating system through the growing

Industry 4.0 landscape in New Zealand, designed to help users, ie, companies, researchers and others, to find relevant providers in digitisation.

From a technology perspective, Industry 4.0 has become a “container” for a range of digital technologies including sensors, AI, augmented reality, virtual reality, the Internet of Things, and so on.

The Guide is constantly evolving as new information and providers come to light.

Many industries around the world and in New Zealand are facing the challenge of “digital convergence”; how to best integrate the data

in business

into their existing products and processes in order to build a solid foundation for staying in business and to realize growth opportunities.

Keeping pace with all these rapidly evolving technologies is a real challenge, for small and medium sized companies in particular. We hope the Guide helps.

For further engagement on Industry 4.0 please contact Mike Burgess at michael.burgess@ema.co.nz You can download the Industry 4.0 Network Guide for New Zealand at www.callaghaninnovation.govt.nz

BusinessPlus July 2018

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in business By david spratt

Avert the IT security threat within The scary thing about IT corruption or loss is that it’s not the sneaky Russians or the depraved teenage geeks who represent the real threat to most businesses. In fact, it’s often quiet Jane from Finance or good old reliable Mac from sales who represent the real and present danger.

Many of us have watched with concern the ongoing reports of hacking, ransomware (where a hacker locks or encrypts your company data and demands ransom before releasing it) and data theft by outside agencies.

However, the founder and chief executive of Board Dynamics, Henri Elliot, commented to me recently: “It is essential directors take a strong position on all forms of risk.

“Risk should be on the Board’s agenda each month and should be appropriately categorised. For example, is [the problem of] a staff member taking a list of clients, a company policy issue? An HR issue? An IT security issue?

“In truth it is all of the above and directors need to take a holistic approach.”

If you think I am being a bit dramatic (and my wife would agree with you), think again. Here’s a few startling truths that should raise employers’ blood pressure: •

Nearly two thirds of employees surveyed, who leave an organisation voluntarily or involuntarily, say they take sensitive data with them.

That is a real wakeup call when you consider that your staff will almost inevitably have access to sales and customer records, design secrets and new product plans.

Next on the threat list for most small-to-medium businesses is that convenient friend, the USB stick.

•

Nine out of 10 IT staff surveyed indicated that if they lost their jobs, whether through redundancy or by firing, they would take sensitive company data with them.

Techies are extra smart, often socially inept and prone to impulsive behaviour when stressed. Just because Jason the geek is a bit dishevelled doesn’t mean he is incapable of revenge served cold.

So how does Jane, Mac or Jason walk out the door with your most valuable secrets? In truth they probably don’t. Your worst enemy is email. More than a quarter of data thefts have been as simple as attaching a file to an email and sending it home or to a friend.

Next on the threat list for most small-to-medium businesses is that convenient friend, the USB

Just because Jason the geek is a bit dishevelled doesn’t mean he is incapable of revenge served cold.

David Spratt is a director of Total Utilities. Email david@totalutilities.co.nz 22

BusinessPlus July 2018

stick. In many cases these data downloads start quite innocently with your trusted person downloading files, so they can work from home. It’s only when they are preparing to leave the business that the true value of the customer list they downloaded becomes clear.

I can dwell on other ways you can lose your company data, but this would make you overly fearful.

Instead let’s look at a couple of the signals that your data may be at risk.

Risk signal: negative work events Laying off or firing staff for any reason should be a signal that your data is at risk. A huge proportion of internal security failures come from a desire for revenge.

If you are planning to terminate a staff member it is important you monitor that person’s behaviour.

A surge in large data files being downloaded or emails being sent to an unusual address should be a huge red flag.

Risk signal: complacency In many cases data security failures are just a case of staff members, managers or owners not understanding that data is valuable.

The signals of complacency are often clear, such as people violating simple security policies like not keeping passwords protected. It is the company who will pay and the staff who end up with their jobs at risk if you ignore knowingly irresponsible behaviour.

in business

Spinning a tiny revolution Revolution Fibres company hit the headlines recently for its collaboration with fishing business, Sanford, to produce an anti-wrinkle treatment made from discarded hoki skins.

But the Henderson (Auckland)-based nanotechnology firm is doing more than making beauty products.

Its flaghip “actiVLayr” face masks are made by electrospinning liquid collagen extracted from fish skins into nanofibre.

The collagen nanofibre is combined with bioactives such as fruit extracts which provide the cosmetic benefit.

When the sheets are exposed to wet skin they dissolve rapidly, releasing the treatment deep into the pores.

The uses for actiVLayr’s unique delivery system will go far beyond the cosmetics counter, says Revolution Fibres chief executive Iain Hosie.

“The one we’re most proud of is in the medical area, with the ability for drug compounds or medicines to be added to the actiVLayr formula.”

Applications for nanofibre technology in general are practically endless, he says. Revolution Fibres has created products that are used in everything from sound control and fishing rods to Formula 1 cars and anti-allergy bedding.

“You might think nanofibre and textiles are not relevant to your technology, but I bet I can find a use,” Hosie told a gathering at Tech Week’s Manufacturing and Design (MaD) conference.

So far the company has made nanofibre textiles from over 30 different polymers. Half are biopolymers, and a third come from recyclable material.

Innovating One of the exciting things it’s working on is using nanofibres to

carry functional materials, Hosie told the conference.

Iain Hosie

“Think about aerogels, think about carbon nanotubes, think about graphene, all these materials which are incredibly useful but they’re essentially microdust; they’re very hard to put into production processes.

“But if you can embed them into a textile, all of a sudden they can be a lot more useful,” he says.

Revolution Fibres has developed a platform technology which can disrupt multiple markets, he says.

That then presents the challenge of how to structure a business model.

The company noticed that whatever it developed, it would always get clients seeking a customised solution. “We had to create a model that embraced that platform,” Hosie says.

While nanofibres are an extremely innovative space, there is a gap between what industry wants and what the research community is doing, he says.

Revolution Fibres is aiming to plug that. It doesn’t need a big research and development (R&D) function; academia is doing that work.

What it needs to do is turn the innovation into manufacturable products, he says.

“Effectively we run a non-recurring engineering business model where clients come to us, they say, “Look, I’d like a membrane for my clothing, is there any way it can achieve these objectives?”, and then we can start to pick the right polymer, the right application and merge the two together.”

Through proving such partnerships early on, Revolution Fibres is at the cutting edge and ready for the next wave of adoption, he says.

Callaghan’s involvement Callaghan Innovation’s Business Innovation Adviser Digital and Health, Andrew Clews, says the agency has been with Revolution Fibres along its journey, assisting with project and student grants, and providing wide-ranging advisory support.

Callaghan Innovation supported the collaboration between Revolution Fibres and Sanford, and is assisting the companies with R&D. Says Andrew, “We’ve worked with Revolution Fibres on both the technology and developing the machinery to deliver it.

“Our solutions have been tailored to the company’s needs, supporting them in areas as diverse as business strategy, capital raising, product performance and preparation for engaging with offshore markets.”

Ask Callaghan Innovation how it can support your business, at email info@callaghaninnovation.govt.nz

BusinessPlus July 2018

23

in business By michael fokkens

Pros and cons of selling part of your business Whether you own a small importexport company or a large manufacturing business, keeping up with the needs of a company isn’t always easy.

Cash flow needs and businessrelated debt rest squarely on your shoulders, even if the money doesn’t technically flow from your own pocket. And you might find it difficult to strike a true work-life balance if you can’t find support staff you trust.

One answer to these struggles is to sell part of your business to a partner.

If you simply want to increase cash flow, you might offer small shares of your business to one or more individuals. In exchange, they might want some basic oversight or voting rights on big decisions, but they wouldn’t likely step in to handle day-to-day management or tasks.

Selling a larger share such as 30-50 per cent to a single person might gain you a true partner. You could then split the management responsibilities with that person.

A second benefit of bringing on a partner is that you have someone else invested in the business.

Unlike staff, who work for a pay deposit, this person is interested in the growth and stability of the company. That makes it easier to trust them and leave business decisions to them when you can’t cover everything yourself or you want to take some time off.

A third reason to take on shareholders or partners is to distribute the risk among other people. If the business has a difficult season or doesn’t perform as expected, the cash flow from selling shares helps keep it afloat without you investing any more of your own money into it.

Disadvantages of selling art of the business The biggest problem with selling part of your business is that you are no longer the only one at the helm. Even if shareholders aren’t involved in the day-to-day activities, you do have to answer to them in some way, and that means you aren’t able to make all the same decisions you might make alone.

Creating a Shareholder or Partner Arrangement

Benefits of selling part of your business

It is possible to sell a share of your business to someone else. You can sell half of the business, making someone an equal partner in the endeavour, but you can also sell a number of smaller shares and create shareholder agreements with individuals who might like to invest in your company.

The first reason business owners sell parts of their companies is to increase cash flow. Divesting yourself of ownership shares in a business can create cash balances on either your company or personal accounts, depending on how ownership is set up and how you conduct the sale. That cash influx can help with personal debts, let you fund needs for your family or help you invest capital in business infrastructure.

The type of agreement you enter depends heavily on your goals and needs.

A fully-fledged partner creates an even more complicated relationship, so it’s important to pick someone you know you can work well with if you decide to sell someone a large percentage of your company.

Selling part of your business can be a lucrative, positive experience.

To mitigate any disadvantages, work closely with brokers and other professionals to ensure a clear, comprehensive agreement.

Michael Fokkens is a business broker at LINK Business Broking. Email michaelf@linkbusiness.co.nz 24

BusinessPlus July 2018

international trade

Time to transition to food safety legislation If your business was an early adopter of the new approach to food safety, you have been operating under a Food Safety Programme or a Voluntary Implementation Programme.

You can continue to use the same programme for now, but the time for every food manufacturer and processor to complete their registration under the Food Act 2014 is coming soon.

When the Food Act 2014 came into force (March 2016), your Food Safety Programme became a “deemed Food Control Plan”, but this deemed status only lasts until 28 February 2019.

After that, you’ll have to meet the new Food Act requirements.

The Food Act 2014 is different from earlier food safety legislation, and provides a range of registration options based on the risks

associated with what you make, how you make it, and how you sell it.

This means you may have a choice about how (or in a few cases, even if) you register to operate your food business. Depending on your food activities, you may be able to register under one of the following: •

A national programme – a simple option for lower-risk businesses;

•

A template Food Control Plan – pre-approved and suitable for most food service and food retail businesses; or

•

A custom Food Control Plan – which can be based on your existing, deemed food control plan, but needs to be evaluated

by New Zealand Food Safety.

a web page titled “Businesses with a deemed Food Control Plan” at www.mpi.govt.nz/food-safety/ food-act-2014/businesses-with-adeemed-food-control-plan/ to help explain a bit more about each of the different types of plans, and what you need to do to get your registration sorted.

Registration may take some time.

Don’t get stuck without a registered plan — it’s best to start your planning early and apply to register your business before 30 November 2018.

If you have further questions, or just need some help, you can email foodactinfo@mpi.govt.nz and New Zealand Food Safety will help you work out exactly what you need to do.

Because you may have options, New Zealand Food Safety has developed

New Zealand Food Safety is a business unit of the Ministry for Primary Industries. Visit www.mpi.govt.nz/nzfoodsafety

Contd from pg7

Tech trekking across the US For New Zealand, the question of latency is significant. This refers to the delay from when the data is gathered to how it is turned into useable information. For example, geography naturally pushes us out to the edge of the world and will always be a logistical consideration, but in the past decade or so, we have overcome some of these challenges as technology infrastructure has enabled faster delivery at lower costs. And we can expect this to be enhanced in the future.

Our “tech trek” was a timely reminder that business owners cannot stand

still. You need to keep undertaking a competitive analysis and look for your next opportunity. It is also noteworthy that the manufacturing workplaces we saw on this trip were certainly productive, flexible and agile – all commendable attributes. They also paid well.

Given the debate around industrial relations we are currently engaged in with the New Zealand Government, and the fact that technology will replace dirty, dangerous and low skilled jobs, people and culture at your workplace will become more crucial. Now more than ever, we need

Government, unions and employers working together to build a workplace framework that enables you and New Zealand to actively participate in the economy of the future. You can read more about EMA’s campaign to achieve this outcome, on page 5.

But my biggest outtake from this trip was inspiration for the opportunities that technology presents, rather than seeing challenges. I recommend businesses get their digital strategies sorted and move forward.

Kim Campbell is chief executive at the Employers and Manufacturers Association. Email kim.campbell@ema.co.nz BusinessPlus July 2018

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international trade

Congratulations to winners of the Zespri Bay of Plenty ExportNZ Awards 2018 Exporters from across the Bay of Plenty region celebrated the finalists and five winners of the Zespri Bay of Plenty ExportNZ Awards 2018, last month.

The Awards’ head judge, Barry Squires who owns Golden Acres Orchards, says, “It is fantastic to see so many successful Bay of Plenty exporting businesses doing so well on the global stage. Export awards judging is very rewarding and enjoyable!”

Read below about the winners’ businesses and the judges’ comments on why they won.

BeeNZ: Winner of YOU Travel Best Emerging Business Award BeeNZ is a family-owned and operated business based in Katikati.

What makes BeeNZ exceptional is that it manages the entire journey of the honey from hive to bottle, overseeing the apiaries, extraction, processing and export.

In 2015 David and Julie Hayes built a new honey processing facility with the latest processing and packing technology.

BeeNZ’s investment has seen spectacular sales growth in international markets.

• Judges’ comments: “BeeNZ are very engaged, exceptional at building relationships and have a very positive can-do attitude.

“Their factory/facility has been built to a very high standard with the future in mind. To have the vision, belief and confidence to build a facility of such high quality so early 26

BusinessPlus July 2018

on demonstrated a huge belief in the future, which has now paid off for them.

“Both Julie and David complement each other and they are focused on building a strong, diversified and sustainable business while supporting everyone around them.”

Genera: Winner of the Page Macrae Engineering Excellence in Innovation Award Genera is at the forefront of sustainable biosecurity services in New Zealand, Australia and the Pacific, providing biosecurity treatment of stored grains and produce, phytosanitary compliance, and pest management services.

Genera was established in 1975 by Mark Greenwood, who was awarded an Order of Merit in 2016 for services to biosecurity.

Genera remains a 100 per cent New Zealand, family-owned company and is New Zealand’s largest biosecurity treatment provider.

• Judges’ comments: “The processes Genera has developed and followed ensure sustainability in an innovation sense.

“They have outstanding commitment and investment by senior management and the board in such a crucial industry to the prosperity of the Bay of Plenty.

Without this investment and innovation, the very industry itself may well be compromised.

“Mark and his team deserve every accolade for such a focused and goal-driven approach to solving worldwide issues, with sustainability,

environmental protection and health and safety as compelling drivers.”

Ziwi: Winner of the Sharp Tudhope Lawyers Best Medium - Large Business Award Ziwi is a premium pet nutrition company using 100 per cent New Zealand meats and seafoods in the food it makes for dogs and cats.

Established in 2004 as ZiwiPeak Ltd, the company has recently rebranded to Ziwi while also expanding its scale and operations this year, to a second Christchurch facility.

Judges’ comments: “Ziwi has undergone significant growth in the past couple of years and is well positioned for further growth.

“With a clear and well thoughtout strategy this is a business well worth keeping a watch on. The business is in a strong growth phase, and commensurate investment is being made in people, relationships, markets and capital expenditure.

“Overall a very impressive business in terms of performance, strategy, the focus on staff wellbeing and the general ethos adopted by management.”

Stuart Hazeldine at Sequal: Winner of the Beca Export Achievement Award At the forefront of the lumber company’s export growth approaching $50 million annually, has been sales manager, Stu Hazeldine.

For the first five years of 10-year-old Sequal he was solely responsible for all sales.

Award-winner Stuart Hazeldine

Stu is a pioneer who has been relentless in his pursuit of value-add export opportunities in markets where New Zealand wood products previously had no presence. His dedication has often resulted in a significant level of self-sacrifice and grown the company’s markets to 25 countries.

• Judges’ comments: “Sequal’s primary markets before the Global Financial Crisis in the late 2000s were in the Middle East where customers ceased purchasing construction timber. Sequal had to quickly develop new markets or face going out of business.

“David Turner, executive director of Sequal, credits Stuart with saving the company through his persistence and ability to develop long term relationships with customers.

“He described Stuart as a pioneer.

Stuart’s dedication not only to understanding his customers but supporting his team in New Zealand to understand their role in serving customers, was very clear. Stuart shows a fantastic team player attitude, spending time in the mill when not on the road.

“His travel commitments are very demanding, requiring a great deal of resilience.

“His enjoyment of creating new opportunities for export was apparent. A strong and inspiring contribution to export growth and achievement - taking on big challenges and succeeding through

knowledge of the product and genuine passion in developing sales.”

Greg and Mandy Jarvis of Bluelab Corporation: Winners of the ExportNZ Service to Export Award Husband and wife team Greg and Mandy Jarvis of Bluelab Corporation have been huge givers who have been said to help any exporter or business if and when needed.

In 2000 they bought NZ Hydroponics, which they re-branded as Bluelab in 2004. Its product range of alkaline/ acidity meters and controllers, and nutrient meters and controllers, measure parameters such as pH, conductivity and temperature for managing crop health. The products are used worldwide in applications from home-based hydroponics to commercial food-growing environments.

The couple quickly became part of the business community and worked hard at growing the team and developing the brand.

They were also involved in the Rotary club, ExportNZ, and Icehouse. Since then they have also contributed to their Lean Manufacturing Cluster, Priority One and Instep, PlantTech, local schools and more; often flying under the radar.

The judges say that as a team the two complement each other: engineer-qualified Greg, chief executive, as a thoughtful and caring leader and a strategic thinker; and nurse-trained Mandy, operations manager, organised and methodical,

Award-winners Mandy and Greg Jarvis

creating an operational environment at Bluelab that is absolutely best in class.

Core to the growth of Bluelab is the people. Both Greg and Mandy have always encouraged contribution from across the team and valued input.

This approach is reflected across the entire business worldwide and it’s also reflected in the way customers interact with the company and its people.

Being not afraid to ask for help is one of the reasons they likely got ahead. And this works the other way too, with Greg and Mandy both known to be only too happy to help and support the exporting and wider business community, as well as the local community in general.

They have given of their own and their staff’s time, helping with teacher professional development, donating equipment for school science laboratories and sponsoring science resource kits that are used constantly in Western Bay of Plenty primary and intermediate schools.

Greg has been a strong supporter of ExportNZ Bay of Plenty over many years and a member of its executive committee, becoming co-chair in 2008-2009. He is still on the committee to this day. And Mandy stepped into the ExportNZ role of executive officer in 2006 which she job-shared with Maggie Hope.

Sharing their knowledge, learnings and time has been integral to who they are as a couple, to the benefit of the Bay of Plenty export community.

BusinessPlus July 2018

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international trade By catherine beard

True grit: the cider success story When I spoke to the chief executive of Zeffer Cider, international awardwinning New Zealand cider makers, he was busy playing host to leading Chinese craft beer brands.

Those two Chinese brands, Nbeer and Glass Hammer, are a significant milestone in Zeffer’s international growth. I discovered that Zeffer, New Zealand’s largest independent cider producer, is about to make huge inroads into the Chinese market through collaboration.

Says Zeffer chief executive, Josh Townsend, “We’re making two collaboration ciders to launch in the Chinese market, co-branded under the Zeffer name.

“I was in China last year talking to these brands about how we could integrate more closely with the Chinese consumer from a cider perspective, and I suggested they come to New Zealand and we make a collaboration cider, to launch on tap in their brew and craft beer bars throughout China.

“The idea was really well received, and earlier this week we had a leading craft brewer from Shenzhen over [here] to make a collaboration cider.”

While China is Zeffer’s focus at the moment, Josh says they’re conscious of how quickly that market can move and that it is a risky place to do business. So Zeffer plans to build up two more export markets over the next 12-18 months – quite likely Australia and the US, but it’s not been decided yet; the company is still learning and researching.

Do not rely on the feedback from a distributor about where the opportunities are.

You need to go and find out for yourself.

Josh says every experience is feeding into what they do. He has learnt as a young exporter that before you send any product to a market, you need to immerse yourself in that market. “You need to do in-market visits to explore what’s happening in the market, the distribution options, potential consumers and customers – for Zeffer that was the bars.

“Do not rely on the feedback from a distributor about where the opportunities are. You need to go and find out for yourself,” says Josh.

“Find out if there’s an opportunity, and then if that distributor is the best partner to help you capitalise on that opportunity.”

Timing is everything Zeffer first spoke to its current distributor about market entry more than four years ago and was advised entering would be too early. Then about two years ago, a university MBA team did a project on Zeffer’s path to market into Shanghai. At the same time, the distributor called to say, “We think the time is now right for cider in China.”

Catherine Beard is executive director of ExportNZ. Email cbeard@businessnz.org.nz 28

BusinessPlus July 2018

Josh then went to China six times last year to make sure Zeffer had the right people on the ground; to get the pricing strategy right; and to get a real feel for the market, especially when he was operating from New Zealand.

Just in the past month, Zeffer employed a market manager in China to be permanently on the ground there, and to give the market the time and attention it needs. They chose a Kiwi with strong business development experience, who’s fluent in Mandarin and integrated in the Chinese culture after living there a long time. “It’s a nice weight off my shoulders,” laughs Josh.

Point of difference How did Zeffer get to where it is now, from selling its first batch at Matakana Farmers Market just a few years ago?

The answer, says Josh, is: “Grit.

“Like any small business we’ve had challenging times and could have given up at several points. But belief in our product, determination and hard work is paying off.

“Next we want export to grow 20-30 per cent by 2021, and we see China being 20 per cent of our total sales by then. We’re currently conducting a capital raise through Snowball Effect to allow further focus on our Chinese market opportunity.”

staff profile

EMA staff member Jordan Milligan introduces himself to members.

3. Questions I am commonly asked

1. My role at the EMA

• “As a small business, how can the EMA help me?”

I’m based at EMA’s Auckland office as the Membership Territory Manager for the Auckland central business district and central Auckland metro regions such as Newmarket, Parnell, Greenlane and Ellerslie.

My role is to work with our members, both new and existing, and connect them to the many membership services the EMA offers. If you would like to talk about your business, the EMA’s member services, or your membership of EMA, you can reach me at: · Jordan.milligan@ema.co.nz · 021 0284 6956, or · Connect with me on LinkedIn. 2. In my role I enjoy …

The process of on-boarding businesses into the EMA membership of 4000 enterprises is really enjoyable. New Zealand is full of great businesses, of all shapes and sizes, doing great things both locally and internationally. I enjoy helping businesses with their membership, understanding their challenges and aspirations, and feeling that in our way we are helping their businesses succeed.

I explain that 42 per cent of EMA members have fewer than 10 staff, and after speaking with many small businesses, it’s clear that what they really require is affordable, tangible and practical support that can have an immediate impact in their business. Business owners often wear multiple hats, juggling various operations such as strategy, sales, service and staff; often, having an “HR department” is a distant dream.

The EMA’s AdviceLine often fills that gap, and can solve this need for small businesses by providing clear and practical human resources advice. You can call them 8am-8pm weekdays at 0800 300 362 in New Zealand or 1800 300 362 from Australia.

• “Staff retention is a major headache for us. What do you recommend?”

My answer is that EMA members have access to member-only rates for more than 700 courses and other training and networking events we hold each year. We provide training on a variety of topics, as well as offer in-house and tailored solutions, halfday toolkits, and networks that can help to upskill staff, and importantly, make them feel valued. These events

Jordan Milligan

all offer opportunities for members to mix with other like-minded business people.

I sympathise with the many businesses that have told us that attracting and retaining good staff is difficult and can be a major challenge. In fact, our last Employers Survey found that 72 per cent of our members experienced the same issue.

I look forward to hearing from you.

- Jordan

Membership Referral Programme Refer a friend to our membership programme and reap the rewards!

For more information email membership@ema.co.nz

BusinessPlus July 2018

29

EMA highlights from the past year 1200+

members attended 25 FREE forums and advocacy briefings

915

ExportNZ Auckland, Waikato and Bay of Plenty teams engaged meaningfully with 915 member companies

874

courses, conferences and events were delivered by the Learning team

10,578

people attended a course, conference or event organised by the Learning team

1214 People people chose the webinar option to “attend” our member briefings

2227 Members

took advantage of EMA Consultancy or EMA Legal service this year

15

submissions were made to central and local government to ensure members’ voices were injected into the development of public policy

35

per cent

reduction in carbon footprint

125

students graduated with a Youth Employability Certificate to help them become work ready

7402 People

attended briefings and employment events organised by the Enterprises team

30,064

member calls and emails answered by the AdviceLine Team

Millions of readers, viewers and listeners made aware of key business issues via media commentary

65 score

was the overall Net Promoter Score awarded by course and conference attendees

85%

of members who used EMA Legal services rated them overall as very good or excellent

11 issues

of BusinessPlus packed with news and commentary to keep members up-to-date

member profile

Timber! Giving competitors a run for their money Timber is ITM’s bread and butter, but its people make the business tick, says chief executive Darrin Hughes.

and tools – everything needed by builders to construct homes, or commercial or industrial buildings.

Darrin has held the role for seven months and the first thing he noticed when touring all 92 ITM stores nationwide, starting on his first day in the job, was the store owners’ connections with their local communities.

ITM wholesales timber to builders, and preassembles [wall] frames and [roof] trusses for houses at 23 of its sites nationwide.

“As owner/operators, all our shareholders are extremely passionate about their customers, which translates to very high levels of customer engagement. Most of our customers - tradespeople - like to deal face-to-face with an owner who is the decision-maker in the business, ie, business owner to business owner.

“We also have very strong community involvement, which is respected by our customers, who are active in those same communities.

“Every time I drove into a small town I saw signs saying ITM was the proud supporter of junior rugby or the bowling club, or had donated materials to build a fence in the community parking area.

“Our stores are always doing things in their local communities, over and above employing people, without creating a lot of noise because their customers are building these same communities and our people are invested in the area, as they are locals themselves. If I went to a café with them [store owners] they knew half the people in there.

Darrin says the cooperative, Independent Timber Merchants Cooperative Ltd trading as ITM, is made up of 70 owner-operator private companies, therefore exact revenue figures for the group are not available. But estimates are close to $900 million. The number of employees is in the vicinity of 2,000.

operate. This new, third phase is a serious challenge to the market (in particular, to Carters and Placemakers).

“Our business is the second largest supplier in New Zealand to the trade.

But our network of stores covers every corner of New Zealand, giving us the best breadth of trade stores in the market.

Challenges and trends When asked about automation, Darrin says this is a challenge in certain respects, but it is no threat to the people who run their ITM businesses.

“Weighing on us more is the Government’s position on social housing (building an extra 6,300 houses over the next three years) and the extra 100,000 houses over 10 years for Kiwibuild. The stretch on the sector to provide the resources, including labour, will be a challenge.

“There are challenges in pre-building and for innovative methods or materials for faster and cheaper builds.

“So some automation improvement with machinery helps our truss and frame sites, but bigger issues are around pre-fabrication and affordability [of houses].”

“Compared with corporates, having owner-operators locally, the money stays in the community where it is generated.”

For Darrin himself, the biggest thing to happen in the business is that he has started as CEO: “Personally this is momentous for me!

The largest product group that ITM sources, by value, is timber, most of which is pine that is grown and processed in New Zealand. Its other main products are building hardware

“And we are heading in a slightly different direction after starting as a buying group 27 years ago, towards solidifying our brand with consistency and discipline as we

Darrin Hughes

Life in business “The good thing about doing business in New Zealand is that New Zealanders still value relationships in business dealings. While price is always important, people still want to deal with people they like,” says Darrin.

“But it’s hard to get skilled staff with the right attitude. Skills as much as attitude, looking after customers and doing a good job every day; the soft skills as much as anything else.”

To those in their first year of business he recommends: “Be prepared to adapt your plan as you learn more about your chosen market or product.

“And have a very strong understanding of your cash flow requirements.”

BusinessPlus July 2018

31

Winter Member Briefings 2018 Day/Date

Time

Venue

Auckland Mon. 2 July

9.30am - 11.00am QBE Stadium, Level 1 North Lounge, Stadium Drive, ALBANY

Mon. 2 July

3.00pm - 4.30pm

Tues. 3 July

9.30am - 11.00am Rainbows End Conference Centre, Clist Crescent, MANUKAU

Tues. 3 July

3.00pm - 4.30pm

Weds. 4 July

Function Centre, Gate B, 9.30am - 11.00am PukekohePark 222-250 Manukau Road, PUKEKOHE

Thurs. 5 July

9.30am - 11.00am Butterfly Creek, Tom Pearce Drive, MANGERE

Friday 6 July

7.30am - 9.00am

EMA, Room C, 145 Khyber Pass Road, GRAFTON

Friday 6 July

2.30pm - 4.00pm

EMA, Room C, 145 Khyber Pass Road, GRAFTON

Mon. 9 July

9.30am - 11.00am Titirangi Golf Club, Links Road, NEW LYNN

Mon. 9 July

3.00pm - 4.30pm

Tues. 10 July

Fair Way Conference Centre, (Behind North Shore Events Centre), 7A Silverfield, WAIRAU VALLEY Ellerslie Event Centre, Guineas 3, Ellerslie Racecourse, 80 Ascot Avenue, REMUERA

Waipuna Conference Centre, 58 Waipuna Road, MT WELLINGTON Centre, Limelight Rooms, Level 3, Mayoral Drive, 9.30am - 11.00am Aotea AUCKLAND CITY

Webinar Tues. 10 July

2:00pm - 3:00pm

Webinar: www.gotomeeting.com

Northland Thurs. 12 July

9.30am - 11.00am Turner Centre At Kerikeri, 43 Cobham Road, KERIKERI

Thurs. 12 July

1:30pm - 3:00pm

Distinction Whangarei, 9 Riverside Drive, WHANGAREI

Waikato / BOP Mon. 16 July

9.30am - 11.00am Thames War Memorial Civic Centre, 200 Mary Street, THAMES

Mon. 16 July

3.00pm - 4.30pm

Tues. 17 July

9.30am - 11.00am Eastbay REAP, Reap House, 21 Pyne Street, WHAKATANE

Tues. 17 July

3.00pm - 4.30pm

Weds. 18 July

9.30am -11.00am Rydges Rotorua, 272 Fenton Street, Glenholme, ROTORUA

Weds. 18 July

1.30pm - 3.00pm

Thurs. 19 July

9.30am - 11.00am FMG Stadium Waikato, Gate 5, Seddon Road, HAMILTON

ASB Baypark, 81 Truman Lane, MT MAUNGANUI Suncourt Hotel & Conference Centre, 14 Northcroft Street, TAUPO Central Kids Kindergartens, 6 Glenshea Street, PUTARURU

FREE for all EMA members | To register call AdviceLine on 0800 300 362 (from NZ), 1800 300 362 (from Australia) or email advice@ema.co.nz Visit www.ema.co.nz