EMA Business Plus October 2012

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Publicatio n o f t h e E m p l o y e r s & M a n u f a c t u r e r s A s s o c i a t i o n Inc

Issue 97 - October 2012

Grass cutting greener in the US for Kiwi mowers

Crowdfunding: New capital raising for startups?

Standards funding under threat

How important is money for recruiting?

In this issue: • W hat’s good for Australia is great for New Zealand

• W ould your IT allow you to work remotely after a crisis?

• A CC offers compounding incentives to reduce injuries

• M ore on managing employee performance

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Contents 1

Business Plus is published by : The Employers and Manufacturers Association (Northern) Inc 159 Khyber Pass Rd, Grafton, Private Bag 92066, Victoria Street West, Auckland 1142 Ph: 09 367 0909 or 0800 800 362 Email: ema@ema.co.nz Website: www.ema.co.nz Chief Executive: Kim Campbell Advocacy Manager: Bruce Goldsworthy Manager, Employment: David Lowe Manager EMA Learning: David Foley Manager EMA Membership & Marketing: Mauro Barsi Whangarei Louise Morrison 09 459 1501 mob 027 6870604 Waikato Denis Quigan 07 823 9311 Russell Drake 07 838 0018

mob 027 203 0694 mob 021 686 621

Bay of Plenty Terry Arnold 07 575 8401

mob 021 662 656

Rotorua / Taupo / South Waikato / Whakatane Clive Thomson 07 348 0334 mob 0274 372 808

Business Plus Editor Gilbert Peterson Ph: 09 367 0916 gilbert.peterson@ema.co.nz Writer Mary MacKinven mary.mackinven@ema.co.nz Published by Mediaweb Project Manager Anthony Stead 021 215 9632 Advertising Sales Colin Gestro (09) 444 9158 colin@affinityads.com ISSN No. 1176-4953

On the cover...

Masport has opened a niche in the US which accounts for 60% of the worlds outdoor power equipment market.

For the full story go to page 27

Advocacy 02 EMA advocacy at work 03 What’s good for Australia is great for New Zealand With EMA CEO Kim Campbell 14 Focus on fair go for business in resource management, local government and emissions trading from Phil O’Reilly CEO BusinessNZ

News 04

04

27

New features for wage survey

04 New premises for EMALegal and EMA Waikato

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05 Confidence expressed in Auckland growth plan 06 Pollution busters at your service 07

Standards funding under threat

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Crowdfunding for startups

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NZ well placed to gain from China

24

Proud Moments - Entec Services, - Fletcher Construction Company - CreativeArch

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ember Profile: Grass cutting greener M for Kiwi mowers

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Advice 08 Employers’ obligations continue during emergency shutdowns 11 ACC’s incentives offer compounding benefits 12 Christmas gifts policy, ‘performance’ and ‘behaviour’ compared - Employment Chat 18 Money just one component of hiring and retention 23

Helping your staff avoid Christmas debt

Technology 16 Can you work remotely during a crisis?

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Our Vision. Your Success

2 Advocacy

EMA: advocacy at work Vision for a smart green economy reen Party co-leader Dr Russel Norman outlined the party’s vision for a smart green economy, at an EMA Policy Forum in Auckland Russel Norman recently.

He said the Green’s vision offers a clear economic plan to create well-paid jobs while protecting our natural environment.

He said the party supports direct government investment including continued home insulation that saves on health spend and creates jobs, building the social housing stock and creating planting jobs for the low skilled to control sediment and phosphate problems; sustainable infrastructure; innovation; support for greening SMEs (small-medium enterprises), including access to government procurers; driving green innovation; brand protection (of NZ Inc); capital market reform including monetary policy that takes a creative approach to adjusting our overvalued currency and managing the exchange rate, that implements a capital gains tax on housing and offers Green Energy Bonds to retail investors instead of selling state-owned enterprises; and making workplaces fairer.

The detail can be viewed on the party’s website. Mr Norman sits on Parliament’s Finance and Expenditure Committee.

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Diplomacy valued but changing n opinion piece in the NZ Herald by EMA’s chief executive Kim Campbell questioned aspects of the restructuring underway at the John Allen Ministry of Foreign Affairs and Trade (MFAT). (The article was reproduced

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Business Plus, August).

In response, MFAT chief executive John Allen graciously agreed to address the concerns raised. He visited EMA to explain the aims and objectives of the proposed changes, as well as reported on progress to date.

He said the proposed changes were in response to changing technology and methods of advancing diplomatic and trade relations, not a diminishing of New Zealand’s highly competent and highly regarded diplomatic corps.

Sir Tipene and MP David Carter visit MA was privileged to host New Zealand academic and company director Sir Tipene O’Regan, founder of Ngai Sir Tipene O’Regan Tahu Holdings Corporation, and Minister of Local Government David Carter for small group discussions.

Sir Tipene discussed at length the review of the New Zealand Constitution, Our Constitution is not all in one document, and it includes crucial pieces of legislation, various legal documents, common law, and law derived from court decisions as well as established constitutional conventions.

Increasingly, New Zealand’s constitution has regard to the Treaty of Waitangi.

The Constitution Act 1986 is a key formal statement of New Zealand’s system of government, in particular the executive, legislature and the judiciary. Minister Carter discussed the Local Government Amendment Bill.

EMA’s views on this are that the jury is still out on whether the Auckland model of an executive mayor has been a success.Therefore changes to the Act should not include executive powers for all mayors until the Auckland experiment has had more time to prove its worth.

Though EMA advocated for an executive

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Business Plus – Exclusive news, advice, learning and networking

mayor when the Auckland Council was established we also wanted mechanisms in place to counterbalance those executive powers, such as an auditor role, but these were not provided for.

New business ministry seeks EMA views MA hosted a two-hour forum for members to meet officials of the Ministry of Business, Innovation and Employment (MBIE) formed in July from the merger of the Ministry of Economic Development, Ministry of Science and Innovation and the functions of the Department of Labour and Department of Building and Housing.

Officials wanted feedback from business on how they could develop and supply better online government services.

Several excellent suggestions were taken on board by the officials who expressed their thanks for the opportunity.

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ealth and safety review must be more H than a band aid.

MA hopes that a rigorous consultation process during the OHS review will identify real, objective and tangible improvements to the way occupational health and safety is managed.

We really want to be sure we get a different and evidence based approach rather than more of the same, or a band aid for New Zealand’s horrible stats on injury and death at work said Paul Jarvie.

EMA is committed to the consultation process and will take this “Safer Workplaces” document to members for their input before we submit our views and ideas.

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Exchange rate meddling no panacea f you think tinkering with monetary policy will improve exchange rates for the New Zealand dollar, be careful what you wish for.

For exporters the AUD has been lower than the USD for some time and most of our trade is with Australia - about 24 % of all merchandise exports, followed by China.

The US buys about 9 %.

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By Kim Campbell, Chief Executive, EMA

Advocacy 3

What’s good for Australia is great for New Zealand I recently attended a conference in Canberra on ‘Winning our Future’, a theme New Zealand might well emulate.

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irst up was Tony Abbott, Leader of the Opposition. With pundits of all casts saying PM Julia Gillard’s days are numbered, we need to be particularly attuned to what Mr Abbott has to say, given New Zealand’s fortunes are pretty well locked into Australia’s.

Two way trade across the Tasman is over $18 billion now. Our exports of skills-rich manufactured exports earn $7 billion of that, not counting dairy products or apples or racehorses. All up our trade to Australia accounts for around 8% of our GDP. Mr Abbott said if elected he would: • Lower taxes and eliminate loopholes; • Reduce government spending; • Implement policies for high productivity and growth; • Speed up Asian integration, a view shared by all speakers; and • Scrap the carbon tax –their projections indicate (as of August 27th) it would cut their GDP by $5000 a person by 2050, a cost by then more than their entire defence budget.

He emphasised the need for Australians to become more culturally literate and Asia relevant. He said a government led by him would encourage more Australians to learn Asian languages, and introduce a two way Colombo-type plan.

Virtually all the presentations from the leaders of Australia’s biggest companies and universities were no less pertinent to New Zealand; indeed they were a de facto list for what we need to do.

To grow productivity it was said Australia needs to continue to invest in and encourage innovation. This includes good management, strong educational institutions, and partnerships with government funded science, their Commonwealth Scientific and Industrial Research Organisation in particular. For

New Zealand, read ‘science’ in general.

All speakers urged the government to reduce corporate tax rates while not weakening their current R&D tax credits regime.

The need for skills development is universal, and the development of hybrid businesses that facilitate more labour mobility by combining offshore and onshore expertise was held to be the way of the future.

“...the development of hybrid businesses that facilitate more labour mobility by combining offshore and onshore expertise was held to be the way of the future.”

The high Australian dollar is accepted as a long term fact.

Of course discussion of China is dominant. China’s growth will drop overtime to 4-5%; by 2018 the size of their economy will overtake the US.The long term outlook is for a co-dependency between the giants (with a theme song Make Money, Not War).

Drive to high wage economy Australia’s need to compete on value for money, not cost, received a thrashing. In the past, and because of its low dollar, Australia has trod the path of cost plus with past depreciation spent, not re-invested. Hence the urgency to change to a knowledge, capital, and service intensive culture.

All of the effort is to drive Australia towards a high wage economy because wage earners are also customers and the more they have to spend the more the

Australian economy can grow.

The Government’s focus on energy, water, sustainability and health is bringing with it a manufacturing renaissance which is seeking out advanced materials, additive manufacturing Kim Campbell systems, sustainability and mobility.

True collaborative innovation is a catch cry since the bar to compete for investment in manufacturing will keep on rising. And to compete, countries must have first class infrastructure, or fail to attract the essentials for moving up the value chain.

These are: • Foreign direct investment (FDI) • Resources • Clean energy • Access to innovation • Availability of skilled human resources • High quality public policy A national plan to attract FDI was called for, with urgency!

It was noted by the Director General of ASIO (Australia’s security service) David Irvine, that the international context is a rising alarm over cyber hacking and data security. In a most fascinating presentation, he said cyber hacking is the single greatest threat to both nations’ and companies’ security at present. ASIO encourages all businesses to implement ongoing cyber vandalism reviews.

Given the importance of the conference theme and the uniformly superb quality of the speakers it was natural for the conference to be held in Parliament Buildings. Many cabinet ministers and MPs from all sides of the House attended.

We should do the same.

I have written here about Australia out of concern for New Zealand. Australia will remain our largest trade partner for many years especially with the currency advantage running in our favour. Where they go in policy terms matters hugely to us.

(Originally published in National Business Review, September 7, 2012).

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4 News

New features for wage survey The popular and respected National Employers’ Wage & Salary Survey has new features this year to make it simpler to complete and more relevant to the marketplace than ever.

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he survey is open to all employers in New Zealand from October 10.

This comprehensive remuneration survey has been run since 1994 as

a joint venture by the four regional employer organisations including EMA. Survey participants input data about the job positions in their organisations (including private, public and nonprofit). The positions are described in detail and are very specific, such as ‘Heavy Fabrication Engineer (Fitter Welder)’, ‘Food Retail Meat Manager’ and ‘Human Resources Manager’.

Once the survey has been analysed, the remuneration figures and practices for each of 216 positions are available

New premises for EMALegal and EMA Waikato EMA is growing and we want to make it easier for members to access our services.

So we have moved our EMALegal team of solicitors specialising in employment law into their own premises – next door to EMA’s headquarters in Khyber Pass Rd, Grafton, Auckland.

EMALegal also has an extra, fourth solicitor, and an office administrator, ready to help solve all your employment concerns, at special member rates.

EMA’s AdviceLine often refers complex cases to them, or members anywhere can contact EMALegal directly.

EMA Waikato has moved into a new building in central Hamilton with offices, a meeting room and a training room to hold courses run by EMA and Export New Zealand. The training room is also for hire.

The Hamilton hub houses a Learning and Export New Zealand executive, an EMALegal solicitor and a membership officer.

to buy, at reduced rates for members of EMA and the other three survey partners. Add a comprehensive ‘Benefits and Conditions’ report that includes pay structure, allowances, leave, superannuation and cars.

The survey is New Zealand’s most comprehensive, employer-focused tool for benchmarking and setting pay rates.

Get the latest on pay and benefits in 216 positions. Live on October 10 at www.nzsalarysurvey.co.nz

The new EMA Hamilton premises at the corner of Tristam and Collingwood Streets

Contact details are: • EMALegal - 175 Khyber Pass Rd (cnr of Khyber Pass Rd and Auburn St), Grafton, Auckland, ph: 09-367 0900 or 0800 800 362 (in NZ), and 1800 300 363 (from Australia). Parking behind building, entrance in Auburn St. • EMA Waikato - 103 Tristram St, corner of Tristram and Collingwood St by the round-about, ph: 07-839 2710

Celebrating long service at EMA Working at EMA for members is so much fun that no one ever leaves (almost).

Each staff of more than 10 years was acknowledged for their long service at a special function last month. Our members can be sure the team has lots of experience and dedication to serving you.

(Standing, l-r) Carol Milne (11 years), Rachel Reynolds (18), Edwina Jennings (11), Raewyn MacKenzie (21), Garth Wyllie (17), Rona Thompson Kawau (15), Bruce Goldsworthy (43), Roger Carson (21), Sean Hanna (12) and Mike Burgess (16); (Front, l-r) Helen Walton (17), Christine Hills (20), Angela Freeth (11), Sheree Alcock (23), Anne Clarke (14), Julie Brough (10) and Brian Cooley (13).

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Absent: Gilbert Peterson (13) and Kenneth Lim (12).

News 5

Confidence expressed in Auckland’s growth

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uckland Council’s strategy for economic development launched last month is commendable and seems achievable but only provided that the resources are made available to carry out the planned actions, says EMA chief executive Kim Campbell.

“Growth projections are modest – to raise exports by 6% above current levels, real Gross Domestic Product (the annual value of the region’s goods and services) by 5% and productivity by 2% annually over the next 10 years,” he says.

“The Innovation Hub is a really good idea. In fact all the features of a world-class city that we want to see are included in this plan.

“But there is too much in there; it’s highly aspirational – so the question is:

where is the funding to carry out the five main goals?”

These are: • Grow a business-friendly and wellfunctioning city; • Develop an innovation hub of the AsiaPacific rim; • Become internationally connected and export-driven; • Enhance investment in people to grow skills and a local workforce; and • Develop a creative, vibrant international city.

Auckland Council’s Harvey Brookes, manager of economic development, visited EMA’s Manufacturers Forum last month to discuss the strategy.

He said the Council’s challenge was to accommodate one million people, provide

at least 1,400 hectares of additional business land and create 300,000 new jobs in the world’s most liveable city over the next 30 years.

But right now, Council is taking actions to develop a more business-friendly culture, including by delivering an integrated transport system especially the central rail link, Auckland-Manukau Eastern Transport Initiative (AMETI) and the East-West Link, and a third harbour crossing on the Waitemata.The Council will also promote and develop the city centre and waterfront as Auckland’s and New Zealand’s hub.

The Council will support industry clusters around food and beverage, finance, specialised manufacturing, marine, ICT, health and film.The full Strategy is on aucklandcouncil.govt.nz

CEO briefs Rosebank Association

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MA’s CEO Kim Campbell briefed the Rosebank Rd Business Association’s AGM last month on what was needed to build a prosperous New Zealand.

He said the real voyage of discovery in modern times is not seeking new lands but “seeing with new eyes”.

We need cash, good people and a dissenting voice asking questions that will lead to new thinking.

Issues for Auckland to sort out are:

roads; rail; city council rates and governance, planning and organisation including the system of council controlled organisations.

He also stressed that manufacturing was key to Auckland’s and the country’s future prosperity citing international manufacturing guru Goran Roos who said “A healthy manufacturing sector is a must for any advanced economy with ambitions to maintain economic and social wellbeing.”

EMA’s CEO Kim Campbell (second from left), with Rosebank Rd Business Association’s Geof Nightingale (treasurer, left), Bob Mackie (president) and Mike Gibson (CEO).

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6 News

Pollution busters at your service Though we all walk or drive past drains every day, and we probably have more than one on our properties, who knows where they all lead? The short answer is to the sea.

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tormwater drains (outside drains) are designed to only drain rain and prevent flooding in urbanised environments. They are connected to a series of pipes in which the water flows into streams, which end up in the beaches and harbours that we all enjoy.

The Auckland Council’s Pollution Response Team has the job of dealing with polluters in the Auckland region. The team deals with up to 1,450 incidents a year. These vary from chemical and fuel spills to concrete slurry discharges into the stormwater system and natural water.

The team educates the public and industry, including at the EMA’s Eco Smart Business programme in Auckland.

It is worth noting that section 15 of the Resource Management Act 1991 (RMA) prohibits the discharge of any contaminants to the stormwater system without consent from a council.

The stormwater system is for rain only.

Enforcement action such as infringement and abatement notices or prosecutions can be a result of breaching this section

of the RMA. If your activities produce wastewater or a by-product, don’t wash it into stormwater drains!

Whether your business is small or large, or you handle or manufacture products, there are simple actions you can take: • Collect wastewater and have it removed by commercial contractors.

There may even be companies that can use your by-product and will pay to remove it. Contact your local council - you may be eligible for a trade waste consent.

• If you have bulk storage of chemicals, store them in a bunded area, and under cover if possible. Having a contained bunded area prevents spills reaching the stormwater drains onsite. Bunding should be big enough to contain 110% of your largest container to prevent it overflowing.

• If there is potential for spills to occur, it may be necessary to have a spill kit onsite, and a spill response plan.

A spill kit should be located close to the liquid storage areas, and have the

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appropriate contents including safety equipment to deal with a spill of the liquids on your site.

• If your company does not have an Environmental Management Plan (EMP), it is recommended that you create one.

This can be a simple document that outlines what environmental risks are associated with your activities, and how you plan to mitigate these risks.

Remember, OUTSIDE DRAINS ONLY DRAIN RAIN. For advice about pollution prevention or emergencies, contact your local council.

Auckland residents can call the 24-hour Pollution Response Hotline: 09-377 3107

www.acepay.co.nz

News 7

Standards funding under threat We take for granted that our internet service, computer, and indeed the clothes we wear are safe and will do their jobs.

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e have this assurance because these items are made to meet manufacturing and logistics standards – often compulsory but sometimes voluntary - that themselves have been devised in painstaking detail by experts in crafting such specifications, says Standards New Zealand (SNZ) chief executive Debbie Chin.

But the continued development of standards is under threat in a Government review due for public consultation this month, and to be reported to Cabinet by February 2013.

A major concern is the Review’s proposal that the development of building standards is taken off SNZ and handed over to the Department of Building and Housing (a unit of the Ministry of Business, Innovation and Employment or MBIE).

“If the Government pulls the plug on us doing this, we won’t survive, ” Ms Chin said. The chairman of the New Zealand Construction Industry Council, Pieter Burghout, agrees.

He stresses that builders want one document containing all specifications for building a house to take on site to do the job, not the current spread of chapters across SNZ and MBIE. He said SNZ is the best organisation to develop and manage this portfolio of standards based on industry best practice. Even if a standard contains variations they all need to be in the one document.

Government should delineate and own the Building Code and focus on more explicit performance based elements eg, ‘build to withstand an earthquake of X magnitude’.

It is not the expertise of a Government minister to inform the standards that fit under the Code, Mr Burghout said. Mr

Burghout is also chief executive of BRANZ. A centralised standards system would also make it easier for BRANZ to undertake and feed in its research.

Standards NZ as an independent Crown entity with 40 staff has no Government funding. Most of its income is from selling standards to companies (its ‘bookshop’), and the rest from clients such as government regulators and product innovators needing a standard to be developed (SNZ’s ‘factory’ side).

“But we don’t sell as many standards as other countries,” says Ms Chin.

How the system works Standards NZ adopts the infrastructure of the Intentional Standards Organisation (ISO) to set standards. Each country’s Government-sanctioned standards body then adapts international standards where necessary to meet local conditions, such as New Zealand’s unique level of seismic activity and UV light (that affects sunglass plastics). Products on the New Zealand market must comply with local standards such as having three-pin wall plugs (for earthing), for our 240-volt electricity, and left-hand road side driving.

“We can go to ISO to initiate an international project or they can invite us to participate in developing international standards – as happened for melamine in milk.”

Locally developed standards are written to comply with international ones, enabling exporters and importers to trade with ease.

“We advise complying with the international standard first, or if not, a regional one, or we can develop a New Zealand standard – which would not necessarily be accepted in an overseas market.”

A lot of regional lead work is done in Australia with New Zealanders nominated to join their standards setting committees.

SNZ takes 12 months on average to develop a new standard.This includes scoping what is wanted, gathering experts such as academics, engineers and regulators to write the product specifications Debbie Chin (unpaid), then consulting with industry.

“If we could, afford to pay standards writers it might make the process faster.”

Amending an international standard takes about three months.

Loss a threat to trade The Review of the NZ Standards Conformance and Infrastructure is looking at the funding model, divesting standards development to organisations other than Standards NZ, and separating standards setting from standards enforcement.

Ms Chin says “We believe it’s fair to have government funding because of our contribution to the public good – people’s safety and the economy.

“Our standards work sees immediate payback for exporter clients –they can immediately sell products embedded with standards.

“Standards are often preferred over patents.”

Standards save money. For example, if all screw manufacturers in WWII England had used the same thread size, England would have saved the present-day equivalent of £55 million.

EMA and BusinessNZ are submitting their views on the standards review.

EMA’s manager of manufacturing Bruce Goldsworthy says New Zealand risks falling behind the rest of the world.

“Business is in favour of the efficient development of effective standards in the interests of safety and the public good.

“New Zealand needs to align with Australia and internationally where that works for New Zealand.”

However, bodies that develop standards should not also police them.

Business Plus – Exclusive news, advice, learning and networking

8 Advice

By Erin Burke, EMA senior solicitor based in Hamilton.

Employers’ obligations continue during emergency shutdowns The only thing that can be predicted about natural disasters is that when they hit, they will usually be sudden, unexpected and cause a good deal of chaos.

A common question in emergency shutdown situations is whether employers need to continue paying employees.

Depending on what is contained in an employee’s employment agreement, employers are required to provide work and pay their employees if they

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n the wake of the Christchurch earthquakes, employers were left in a particularly vulnerable position as many struggled not only with their own problems ensuring the safety of their families and homes, but also with businesses that were destroyed, inaccessible or temporarily shut down.

Once the smoke clears, employers soon realise that the temporary or permanent loss of income is only one headache they will face in the days, weeks and months that follow.

What many employers discover all too late is that although their businesses may have ground to a halt, many of the obligations owed to employees continue. The time to find out what the law requires and what insurance covers is before you the need to know.

“...Asking employees to take annual leave immediately is one option if they have accrued annual leave.”

are willing and able to come to work. This can be challenging, if not impossible, for small to medium size businesses where the company’s income immediately ceases and there is no work for the employees to do.

Asking employees to take annual leave immediately is one option if they have accrued annual leave. However, the Holidays

Act requires agreement between employers and employees. Where there is an absence of agreement over the taking of annual leave the employer is required to give 14 days’ notice. Employees cannot be Erin Burke compelled to take annual leave in advance of their accruing of the leave.

Although the Holidays Act does allow for the compulsory taking of annual leave during close downs, this provision applies only to customary close downs such as during the Christmas and New Year period and cannot be used when the business has been shut down as a result of a disaster.

Not all business insurance covers an employer’s obligations to employees during disasters. Employers would be well advised to find out in advance what is, or more importantly what is not, covered.

Inserting a Force Majeure clause into employment agreements requiring employees to take annual leave immediately if requested during a disaster, is another option. However, this remains untested in court.

Seeking employers for the Ngati Whatua Iwi Industry Employment Programme

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he Auckland central business district iwi, whose community is centred around the Orakei Marae, Ngati Whatua O Orakei, is seeking employers to support its goal of lifting the education and employment aspirations and achievements of its people.

In line with this goal, it has developed an Industry Employment Programme (IEP) with the bold aim of placing at least 50 Ngati Whatua members into training, education, apprenticeships or employment

by June 2013.

The iwi is asking employers to help with apprenticeship positions, cadetships or employment.

By increasing the skill base of Ngati

Whatua individuals, the iwi will be in a stronger position to contribute to the economy and will have enhanced the economic, cultural and social wellbeing of its people.

The IEP is part of its Whanau Ora service that is an inclusive approach to providing services and opportunities to all New Zealand families in need. The service is driven by a focus on outcomes: that whanau will be self-managing, living healthy lifestyles, participating fully in society, confidently participating in te ao Maori, feeling economically secure and successfully involved in wealth creation; and that whanau will be cohesive, resilient and nurturing.

If you have any roles available in

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hospitality, customer service, construction, labouring - actually in anything - and would be interested in developing a relationship with and contributing to strengthening the Auckland CBD iwi, please contact Sarah Lang at email sarah@ ngatiwhatuaorakei.com or phone 021 733 434.

Read more about the iwi at www.ngatiwhatuaorakei.com

News 9

Crowdfunding for startups: Selling the rewards The Wall Street Journal Online (August 18, 2012) has spoken: “Supply and demand, product design and development and marketing, basically everything we know about making and selling goods—Crowdfunding has potentially upended all of it.” David Tomlinson explains.

Crowdfunding – what is it?

Crowdfunding is not new.

It is almost self-explanatory: a method of raising money from many people to help fund an event, a project, person or product – with extra benefits thrown in for the funders. Politicians have been raising campaign finance from supporters like this for years.

There are two distinct forms of crowdfunding: pledge or donation based, typically in return for unique rewards, and equity crowdfunding, which will allow start-ups to raise early stage equity capital.

To date, pledge based Crowdfunding has been used to launch a new product, kick-start a film, or finance a band’s new album.

How does it work?

Here’s an example: In May, crowdfunding site Kickstarter made worldwide headlines. Makers of the Pebble smartwatch, which can communicate information from the wearer’s smartphone, launched a campaign to raise $100,000. For a pledge of $115 or more backers would receive a Pebble Watch, effectively allowing them to pre-order the $150 watch at a discount. Within two hours of going live the project had met the $100,000 target and, incredibly, six weeks later when funding closed, over $10 million had been raised.

Benefits to New Zealand business

Recently, interest in crowdfunding has been further galvanised by the passage of the US Jumpstart Our Business Startups (JOBS) Act, which facilitates equity based crowdfunding by requiring less arduous requirements around disclosure and reporting.

Many think equity based crowdfunding has the potential to be far bigger than pledge based crowdfunding. After all, wouldn’t you to like to have shares in that Pebble watch company?

In the US, many believe that the JOBS Act will transform the way US firms raise capital. There is no reason to think the same could not happen in New Zealand.

Given that the numbers don’t stack up

“...In the US, many believe that the JOBS Act will transform the way US firms raise capital. There is no reason to think the same could not happen in New Zealand.”

for smaller capital raisings, the promotion and raising of capital needs to utilise advances in technology, the Internet and social media to reduce the expense and regulatory hassle.

Furthermore, to a large extent any bad actors will be exposed through the transparency afforded by the power of social networks.

Crowdfunding can help large corporations too. “For big brands, raising money matters less than gaining information about customers or generating good PR,” says Slava Rubin, a founder of Indiegogo; and “Crowdfunding is a good way to test consumer demand,”

says Hal Varian, Google’s chief economist (Economist, June 16, 2012).

Just as John Dillinger robbed banks because “that was where the money was”, if you are going to crowdfund you might as well go to where the crowds are. For this reason crowdfunding is an obvious match with sports and entertainment.

Way back in 2003 racing driver Justin Wilson financed his F1 Minardi drive through a public share offer, raising £1.5m - perhaps one of the first and most successful crowdfunding campaigns.

Similarly, my companies ThrillCapital and ThrillPledge are involved in equity and pledge based crowdfunding for sports and entertainment. Our big hairy aim is to be a “kinder, gentler” Goldman Sachs meets IMG meets Facebook; a private, more nimble version of SPARC. We give fans the chance to literally own a “piece of the action”, get some skin in the game and have a great insider, “fly on the wall” experience.

Backers get bragging rights down at the pub and a share in the career of the next Indy 500, US Open contender or up-and-coming filmmaker, while the up-and-coming talent gets the funding he or she needs to take their career to the next level.

While an association with sports and entertainment talent can provide a door opener to NZ exporters looking to showcase their businesses globally, equity based crowdFunding has a far more direct benefit to NZ business.

As EMA’s Kim Campbell says, “Now we need a plan of action to galvanise business investment in innovation as it represents their best chance for making money and employing more people.”

Equity based crowdfunding legislation needs to be a part of that plan.

By David Tomlinson, Managing Director, ThrillCapital™ & ThrillPledge www.thrillcapital.com www.thrillpledge. com

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Our family of partners includes

Being a member of New Zealand’s pre-eminent business association not only delivers vital support and advice to your business but also entitles you to an exclusive range of products and services.

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Preferred Suppliers

Advice 11

ACC’s incentives offer compounding benefits for employers Included in ACC’s suite of products are incentivising tools to assist employers and their employees attain safer workplaces.

T

hese are: 1. Experience Rating – discounts applied to all employers except those in ACC’s Partnership Programme (see below).

2. Safety incentive programmes - voluntary and rely on audits to verify occupational health and safety (OH&S) activity within the business.

There are two programmes employers can participate under: a. Workplace Safety Management Practices; and the b. Partnership Programme (also known as the Accredited Employer Programme).

1. The Experience Rating scheme rewards employers who have good safety records, but offers nothing for those with some accidents and penalises those who have more than the average across their levy grouping: Employers paying less than $10,000 in levy can get a rebate or loading of 10% from their base levy. The calculation is based on ACC claim days within the previous three years.

• No claims – 10% discount; • 1-71 claims - no change in levy; • More than 71 claims – 10% loading on base levy. Note that if a person is off in the week previous to a weekend and continues to be off after the weekend the two weekend days are counted as days off.

Employers paying more than $10,000 qualify for a 50% additional or 50% reduced levy. Under this scheme employers are grouped into like risk groups of similar size. A comparison is then done and depending on the result employers either get a rebate or loading.

Critical to this calculation is whether a claim is more than $500 and the total days off work on weekly compensation.

Prevention pays Two things become obvious to reduce costs: Prevent workplace accidents; and when and if they occur, embark on a comprehensive rehabilitation programme to reduce the days off component. These are easily achieved.

2. The two safety incentive schemes are: a.) Workplace Safety Management Practices: This product is voluntary and requires an audit of the employer’s OH&S systems, policies and procedures to verify their existence and integration into the employer’s wider management interventions. Discounts of 10, 15 or 20% are applied depending on the level of conformance.

Audits are conducted every two years and the discount is applied for those two years. These discounts are in addition to any experience rating discounts applied

by ACC, ie, the effects are compounding. b.) Partnership Programme: This voluntary programme is for large employers who typically have levies in excess of $100,000.

Participating employers agree to self-manage all workplace injury claims and in return receive a levy discount.

Employers must provide the full range of products and services that ACC would apply for workplace injuries, which includes but is not limited to weekly compensation and payment for medical treatment, x-rays, MRI scans, surgery, rehabilitation (for work and social or home related activity) plus transport grants and allowances.

Employers are audited annually and the audits cover OH&S systems (as mentioned above) plus injury and claims management systems. Employers

may engage a Third Party Administrator (TPA) to assist in the administration of injury and claims management. EMA can assist with this.

Discounts are large and depend on the level of risk Paul Jarvie the employers wish to carry.

Typically low level risk equates to between 50 and 59% discounts. Those carrying more risk can expect discounts of around 95% from their levy. The more risk, the more the discount. Employers must also purchase stop loss insurance to hedge themselves in case of an expensive claim.

At the end of the contract term, if the claim is still being managed it is handed back to ACC. ACC will calculate the future liabilities of the claim and will require some further funding from the employer.

Again prevention and prompt rehabilitation are the only ways to make these schemes work.

There are many other benefits as well as financial return. EMA can assist employers understand the schemes, create systems able to be audited, and conduct ACC pre audits or full audits for all discount schemes.

Contact Paul Jarvie: paul.jarvie@ema.co.nz ACC’s no fault, no liability insurance covers treatment and rehabilitation expenses for all injured New Zealanders and overseas visitors.

It also entitles an injured New Zealander to 80% of weekly earnings lost as a result of any accidental injury.

The scheme is compulsory and is funded by account users paying levies. Levies are set to cover historical and expected claims within that account for the life of the claim.

ACC turns over around $1.5 billion per year.

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12 EMPLOYMENT CHAT

Employee ‘performance’ vs ‘behaviour’...

Q. Can you give me a quick heads up on managing employee ‘performance’ versus ‘behaviour’? Do I discipline someone who doesn’t do their job well enough? – Jeff Dear Jeff Poor performance can be disruptive and costly to your company.

Our practical A-Z of Employing guide Performance Management shows you steps to manage employee performance. Active management and early intervention is usually less expensive and certainly less stressful for all concerned.

Performance refers to how well a person does their job according to the requirements in their Employment Agreement and their job description with your business. Without these documents you can’t really measure output or competence. It is obviously important that people are clear on their employer’s expectations.

If you don’t think someone is being effective or efficient, you must raise your concerns with them, consider

why they are not performing and try to help them improve. If there is still no improvement you can instigate a formal ‘performance review’ and put in place a performance improvement plan.You need to provide support and any relevant training and allow them a reasonable

“Sometimes there is a fine line between employee performance, behaviour and misconduct. In case of misconduct it is usually where an employee’s behaviour is unacceptable or they have broken a specific rule..”

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period of time to meet requirements.

You should also advise them of the potential consequences of not meeting performance standards.

Where poor performance continues, disciplinary action may follow in the form of a formal warning, but check for any company procedures that need to be followed. The employee should be advised of their right to bring a representative to any meetings where a warning could be the outcome, and to have real opportunity to respond to any issues raised. Before making any

decision regarding a warning you need to consider all relevant factors including any issues that may be impacting on performance that may need addressing.

Sometimes there is a fine line between employee performance, behaviour and misconduct. In case of misconduct it is usually where an employee’s behaviour is unacceptable or they have broken a specific rule.

The purpose of any warning refers to the employer’s correcting a problem resulting from an employee’s behaviour that is unacceptable: it is not about performance or competency but the other ways they behave at work that have a detrimental effect on your business. They might do something that harms your company’s reputation, or reduces other employees’ morale, for instance. The sort of negative behaviour that needs correcting might be deliberate and malicious, or accidental.

In the latter case, pointing out to the employee their mistakes and providing more training and/or other preventive measures might be all you need to do.

But in the worst case scenario, where the employee’s actions are more serious and clearly not allowed according to policies and/or clauses in the Employment Agreement they have with you, then dismissal could be an outcome of any formal disciplinary procedure.

But a warning: if you get either procedure wrong and don’t act in good faith towards your employee, they could lay a personal grievance claim at the Employment Relations Authority (ERA). That process usually begins with mediation and if that fails, an ERA hearing and perhaps an escalation to the Employment Court.

And even if you do get it right, you could still be forced to defend a personal grievance claim.

Q. We are starting to plan our Christmas gifts and cards for customers, suppliers, etc. Do you have some general tips so we

WHAT EMPLOYERS ARE ASKING ADVICELINE THIS MONTH

13

and should we have gifts policy? don’t offend anyone….with our diverse staff and customers? – Ngaire Dear Ngaire Gifts are a feature of business relationships, but you do need rules.

Cultural differences about gifts may have an impact on your business dealings with some organisations, particularly if your gift policy goes head to head with a custom of gift exchange when business deals are concluded.

If you have concerns about your business relationships in this respect you may wish to seek the advice of either the Race Relations Commissioner or the relevant embassy.

You may also need to consider cultural differences about gifts if you have employees who travel overseas to do business on behalf of your organisation, and make sure you have extended your policy on gifts for these circumstances.

Employees who receive gifts should not become a contentious issue amongst staff. And they should not compromise your business in any way.

Gifts come in many shapes and forms - as objects, a service or an opportunity - but they always provide the recipient with a benefit and your organisation should have discretion as to who enjoys that benefit.

Developing a policy on gifts is a sure

“Developing a policy on gifts is a sure way of minimising most of the problems associated with them.”

guide on Gifts for suggestions on how you might resolve these issues.

One area you may also wish to consider is the management of airpoints earned by employees when travelling as part of their employment. Unless you are willing to allow employees to use them for personal travel it is recommended you consider including the requirement to only use those airpoints for travel associated with their employment.

By the EMA Advocacy team in consultation with EMA Advice, and based on real calls to EMA’s AdviceLine.

way of minimising most of the problems associated with them particularly if the basic principle of the policy is a mandatory reporting of all gifts.

Relying on the integrity of your employees and business partners may not be the most sensible way of ensuring you are getting the best deal in a competitive business environment.

Download our A-Z of Employing

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 AdviceLine team at phone 09-367 0909 or 0800 800 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays.

Alternatively, email advice@ema.co.nz or read or print information such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, at www.ema.co.nz To inquire about becoming a member to gain access to this free AdviceLine service, please contact EMA Membership at the numbers above or through EMA.co.nz.

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14

Fair go wanted for business in resource management, BusinessNZ works on behalf of businesses throughout New Zealand providing research, analysis and advocacy aimed at improving the environment for enterprise.

P

art of this work involves making submissions on proposed legislation that could affect business.

During 2012 BusinessNZ has made a number of submissions on Bills on tax, company law, financial reporting, minerals exploration, standards and regulations, consumer protection, workplace health and safety, minimum wages, paid parental leave and others.

Recent legislative proposals that

particularly affect business are concerned with resource management, local government and emissions trading.

Resource management legislation The Resource Management Act (RMA) has come in for criticism for creating barriers to small and large business, and to economic development generally. Reforms to address this are currently under consideration.

BusinessNZ is recommending the RMA should contain more recognition of property rights, and more marketbased systems for allocating resources and approving consents. Also, its focus on ‘sustainable management’ should be changed to ‘sustainable development’

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to better enable economic development rather restricting resource use.

Another area of concern to business is the judicial approach to the RMA: since many RMA cases involve Phil O’Reilly conflicting environmental and economic objectives, Courts have used a balancing exercise to reach a ‘broad overall judgment’. As the Act’s provisions are largely focused on the natural environment rather than the built or urban environment, a broad judgment approach based on those provisions can result in decisions that do not favour business development initiatives. This broad judgment approach also makes the RMA unpredictable law, rather than law based on clear, transparent principles that can be known in advance. This

By Business NZ’s CEO Phil O’Reilly

15

local government and emissions trading uncertainty around legal outcomes is not conducive to investment and economic development.

BusinessNZ’s recommendations: including a change in focus from sustainable management to sustainable development, greater focus on property rights and use of more market mechanisms would alleviate problems caused by the broad judgment approach as well as problems caused by the RMA itself.

Local government legislation BusinessNZ has lobbied hard to get changes to local government law that has caused significant problems for both large and small business.

The Local Government Act 2002 gave councils a power of general competence which has allowed them to get involved in an extremely broad range of activities, leading to higher than necessary council spending. As business pays the lion’s share of rates, high spending by councils leads directly to unsustainably high business rates.

A further problem for business from councils’ wide freedoms is a tendency for councils to establish enterprises in competition with local businesses.

Councils that set up enterprises like cafes, gyms and cinemas are using ratepayer funds to compete unfairly with small businesses.

The local Government Act 2002 Amendment Bill currently before Parliament is aimed at restricting councils to core activities such as street lighting, traffic signs, parks and reserves, civil defence and so on.

BusinessNZ recommends that the amended legislation should contain a tightly-worded purpose statement to prevent council encroachment beyond core duties. The Bill also provides for fiscal responsibility requirements (eg, around spending and debt levels) to be developed, similar to the regulations imposed on central government under

the Public Finance Act. Among other things BusinessNZ is recommending the involvement of the Office of the Auditor General to help ensure the proposed regulations are transparent and ensure local government accountability to ratepayers.

“...This broad judgment approach also makes the RMA unpredictable law, rather than law based on clear, transparent principles that can be known in advance. .”

Emissions trading legislation The decision by the Government to establish an emissions trading scheme (ETS) ahead of most other countries brought some risks to New Zealand businesses that became among the first in the world to face a cost of carbon.

This reduces New Zealand businesses’ competitiveness compared with businesses overseas that don’t bear the cost of carbon.

BusinessNZ advocated strongly for protections for such trade-exposed businesses, and the 2009 legislation that amended the ETS put in place a number of protections, including a 1-for-2 surrender obligation and a $25 per unit fixed price for carbon.

In 2009 it was expected that other countries would soon follow New Zealand’s lead in beginning emissions trading, and the protections would not be needed for long, so the ETS legislation specified an end date for those protections of December 2012. With that date approaching, BusinessNZ has

been advocating for the legislation to be amended to maintain those protections beyond 2012, given that competitive pressures are largely unchanged, with most countries yet to begin emissions trading.

The Climate Change Response (Emissions Trading and Other Matters) Amendment Bill will accordingly modify the ETS to continue to support New Zealand businesses and the New Zealand economy. BusinessNZ supports the continuation of these protections until there is a more level playing field, with more countries involved in emissions trading.

These are examples of the sometimes complex issues that BusinessNZ engages in to promote a better environment for New Zealand business. Analysts working on these and other issues keep in touch with BusinessNZ members including EMA’s members to ensure our advocacy is focused on the areas that most affect business.

You are welcome to contact us on any issues requiring advocacy for business: Employment & industrial relations: Paul Mackay pmackay@businessnz.org.nz 04-4966553 Tax, regulation, research: Stephen Summers ssummers@businessnz.org.nz 04-4966564 Economics, local government, water, waste: John Pask jpask@businessnz.org. nz 04-4966563 Infrastructure, energy, environment: John Carnegie jcarnegie@businessnz. org.nz 04-4966562 Manufacturing, exporting: Catherine Beard cbeard@businessnz.org.nz 04-4966560 Skills, training, trade: Carrie Murdoch cmurdoch@businessnz.org.nz 04-4966566 Sustainability: Penny Nelson pnelson@businessnz.org.nz 04 4966 285 Legal and international: Barbara Burton bburton@businessnz.org.nz 04-4966561

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16 Technology

By Andrew Charlesworth

Can you work remotely during a crisis recovery?

Part II: Understanding Business Continuity….Take the journey.

In Part I (September issue) I explained the difference between Business Continuity and Disaster Recovery. We also explored the role of data and backups as part of any continuity plan.

time objectives) and RPO (recovery point objectives) with the business.

Even if you are confident that you can recover your data, the next question is what will you do if your IT systems have failed or they are not accessible and/or staff cannot get into the building?

W

hen an event impacts your business’ critical systems, your office or both, how will you continue to work and provide service to your customers?

To remind, Business Continuity is not Disaster Recovery. As the name suggests Business Continuity involves the everyday tasks that keep your business running with minimal impact or down time, all the time, whereas Disaster Recovery is what happens after an event.

Following on from our last article, we hope you have investigated your backups and are confident they are complete and robust, and that your data can be recovered. It’s also important you have agreed acceptable RTO (recovery

“...But how would your staff get home or to an alternate site? What would they work on?

Who has the Business Continuity plan?”

Things that could impact your business Contrary to popular belief, earthquakes and tsunamis are not the things to worry about. Below is a list of some of the real and Andrew Charlesworth more common events that businesses encounter: • Power failure • Flood or fire • Air conditioning failure • Building certificate/warrant – non compliance • Internet service disruption or telecommunications failure • Computer viruses or hardware failure • Impact from staff changes, resignations, sickness or leave • Industrial action • Renovations or relocations – new site not ready on time • Crime scene incidents There is a range of common approaches that businesses take when a crisis occurs. Whilst in theory many of these approaches are viable, in practice they fall well short of a solid Business Continuity plan.

The table on the next page highlights the considerations and factors that will impact what, in theory, might otherwise work.

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Technology 17

Sites Loss

Loss of IT systems

Typical Idea

Factors and considerations

Work from home

Do staff have remote access to your systems and do you have sufficient concurrent logins?

Get replacement infrastructure

How long will it take to get and rebuild infrastructure?

Do staff have access to appropriately spec’d computers?

If using their own computer, is their security up to date and comparable to your company’s minimum requirements?

Repair

Is the home internet connection the correct plan and speed?

How will you divert phones and DDIs, and replicate your switchboard/ IVR? How do you meet with clients and staff?

How do you minimise interruptions and maintain productivity levels?

Work from another branch

Work from a hotel

Is suitable stock held in your area?

Most IT hardware is not held in NZ and is ordered from overseas.

Can you get parts?

How long will it take and will the repair work?

Bring systems up on balance of infrastructure

Are there spare desks, computers and phones?

Do you have sufficient unused capacity to bring systems up?

Will the network have capacity for additional people?

Will this compromise other systems due to load?

Phone diversions as above.

Will this impact system speeds?

Can you get suitable space?

Do you have the resources available to do this?

Cost – internet and phone calls are very expensive.

Will you have desks, chairs, and computers?

Consider how you will transition back.

Staff and client parking?

Challenge your recovery plan to make sure it will work.

When you are reviewing your plans, all of the above points need to be considered. As a test, next time you have a fire drill step back and adopt a view that this is a real event that denies access to your office.

Look around at your staff and see how many have cell phones, laptops and car keys – usually cell phones are what you will see. But how would your staff get home or to an alternate site? What would they work on? Who has the Business Continuity plan?

In terms of system failure, enquire with

your team how it would be addressed and how long it would take.

In our final article next month we will focus on assurance – testing and proving.

To find out more about developing a Business Continuity plan that works go to www.plan-b.co.nz/ema

Case study: Farmside After a big Christchurch earthquake Farmside’s staff tried working from home, but that didn’t work out as expected.

Farmside is a rural telecoms provider with head office in Timaru and another office with 10 staff in Christchurch.

Two weeks after being ousted from the Christchurch office its team moved into Plan-b facilities that provided them with everything they needed to keep business running smoothly.

“None of our customers even realised we were not in our regular office,” said Graham Henshaw, Farmside logistics manager.

Chief Operations Officer Ron Goodfellow has always been a firm believer

in business continuity planning. “We have revenue to protect. I just consider it as if you’re buying insurance.”

Site loss had been part of the thinking from the outset. However, when the crisis struck they tried working from home and meeting occasionally in coffee shops as needed.

However, they found that was disruptive and difficult.

He said, “We’re a tight-knit group. By working from home, the interaction between people wasn’t happening.

Phoning is not as easy as poking your head over the cubicle. We need to feed off each other’s creativity to keep business flowing.

“Also, we’ve been through a stressful event, so wanted to keep people

together and provide support to each other.

“Two weeks after the quake I rung up Plan-b and said we wanted to move in. They said, no worries, turn up tomorrow.”

Farmside just wanted office space and Internet connectivity as well as a professional place for meetings.

“We were given codes to get into the building, shown to our space and away we went. We made ourselves at home.”

They stayed there three weeks till returning to their own building.

“When you’re in a state of trauma, the little things matter – the ability to make coffee, all those things,” Henshaw says.

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By Mary Mackiven

18 Advice

Money just one component of hiring and staff The very nature of employment is the exchange of work for pay.

Withdraw the money and you have no staff!

F

rankly if your business model can’t afford to pay well, it’s time to turn the lights off and try something different, said EMA chief executive Kim Campbell at the Business Intelligence workshop series in Auckland on the topic: “Driving Human Performance - Does Money Matter?”

Strategic Pay director Jarrod Moyle said: “Does money matter? Absolutely! Is it the most important thing? Definitely not.”

But how important is money relative to all the other factors driving an employee to take a particular job, perform well and stay in the organization instead of flitting off to greener pastures? And how do employers set remuneration to attract, develop and retain the best people?

The issues were considered at the content-rich breakfast workshop hosted

by Lowndes Associates lawyers in partnership with the EMA and sponsors.

Workshop MC and senior associate at Lowndes Associates, Kerri Dewe, said it’s generally recognized that people are a business’ most important asset, but when the going gets tough priorities can change.

Surveys show that for employees, factors such as satisfaction, respect from peers and supervisors, and work-life balance are also vital to staying in a job.

In fact the workshop’s catchword became ‘engagement’.

Jarrod Moyle talked about the part money plays in the components of effective incentivisation.

Referring to the book, Drive – the surprising truth about what motivates us,

by Daniel H Pink Mr Moyle said that for simple, straightforward tasks, financial incentives work well. But for complicated

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tasks where conceptual, creative thinking is required – incentives don’t work.

“People aren’t animals.”

For best results, forget the bonus, he suggested. Workers respond to: • Choice –participating in making decisions about what they do; • Collaboration —working together in effective teams; and • Content — having a good job to do.

Mr Moyle said it’s difficult to incentivise creativity and innovation – environment plays an important part – and intrinsic motivators are far more important.

“Think more about creating an engaged workforce, than providing incentives.

“ three most important drivers of engagement for a person are being treated with respect, having worklife balance and enjoying the type of work they do.

Old school management is based on compliance/control while new management focuses on engagement/purpose.

Employee engagement has been described by Kenexa/JRA as the extent to which employees are motivated to contribute to organisational success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organisational goals.

Mr Moyle said, “You can motivate someone with a threat or reward but they might still be unengaged. Highly engaged people remain motivated when there are limited resources and in adverse circumstances.”

Drivers of employee engagement are: • Alignment and purpose, ie, when the employee has a sense of “common purpose” and belief in what the organisa-

tion is trying to accomplish and has a sense of personal achievement; • Inclusiveness and belonging, ie, the employee has a sense of belonging in a fun place to work where her contribution is valued; • Learning and growth, ie, where her knowledge and skills are used fully, she is encouraged to try new ways of doing things and receives helpful feedback and coaching; and when she has • Confidence in leadership.

Specifically, the three most important drivers of engagement for a person are being treated with respect, having worklife balance and enjoying the type of work they do.

How much pay is enough?

People need to feel they are treated fairly compared to others in the organization but global research shows only 53% of people feel fairly paid.

The best basis for deciding pay levels is output or performance, Mr Moyle said. Not equality, tenure or skills and qualifications.

While the base salary might be the main driver for attraction and retention (followed by job security and advancement prospects respectively), leadership and a balanced workload are top for achieving sustained engagement, he said, referring to a global workforce survey.

Courting a CEO Kim Campbell spoke about organizational development and creating a shared vision within the workplace. He said achieving this includes building a balanced team and finding the right chief executive officer.

First, firms must decide what they want to accomplish. “Companies often don’t know their needs. First describe your organization accurately! Be very honest with yourself; there’s often a lot of internal hypocrisy.

“Write it down, work it out then challenge that: can you get it done?”

Advice 19

retention

Kerri Dewe, Jarrod Moyle, Kim Campbell, Gráinne Troute

“Tell [CEO candidates] the truth; if you have problems, say so.”

Executive candidates are typically found by advertising or using a search firm, and there is a time and a place for both.

Mr Campbell advised when using a search firm to get close to the individual searching so they understand you and your values well. This increases the chances of them producing a candidate you can get along with, not just someone who can ‘do the job’.

“The best candidate is not always looking for a position and the search person will search them out. It costs you to have someone making poor decision so a search firm’s costs soon pay for themselves.”

“I look for people who are honest, selfaware and confident in their own skin; not making themself look good above their team.”

Look for relevant experience, which may not be essential but in technical or specialist roles qualifications matter.

Look for goals orientation: can the candidate gather up the people in the organisation and take them with him/her,

not just look like they can complete tasks?

Mr Campbell said internal candidates are a good bet if they exhibit 50% of the required credentials; or failing that option, give the job to an external candidate who shows a 70% fit. If someone seems to be a 100% fit they will probably move on.

Imperfect science Every business grapples with pay setting because payroll is a significant cost for most enterprises, said Gráinne Troute, general manager group services and human resources at SkyCity.

“But there are no absolutes in aiding motivation and engagement.You can never say, ‘my work is done’. All remuneration schemes are imperfect because not all variables are determined logically.”

Mr Moyle said total transparency was not necessarily a good thing. “But you need to be able to show your clear, deliberate thought about pay setting – not necessarily to show where someone sits in the pecking order but to show it is not some random thing – though it often is!”

Mr Campbell said salaries have been

driven up since public companies have had to report salary bans. “It’s nobody’s business what you are paid, like the color of your underwear. People are entitled to confidentiality.

“Believe in your organisation’s value and that you can attract good people.”

Ms Troute said remuneration is specific to each individual on their career path – talk to them once a year about their job and prospects. One size does not fit all.

Incentives differ for long-term and short-term outcomes; their purposes must be clear; and targets and budgets must be realistic.

Incentives are not guaranteed to be received/achieved therefore are not perceived as part of remuneration by employees. And complex systems are a turn-off when hiring. A badly designed scheme can be worse than none, even rewarding bad behaviour or punishing the good.

The fourth and final workshop in the 2012 series is “The Big Debate: That You’d Have to Be Mad to Be a Company Director”, on October 31.

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Find out more Call us on 126 or visit telecom.co.nz/find to find a Telecom Business Hub near you Telecom terms, conditions and charges apply. Early termination charges or repayment of some of the mobile subsidy may apply if your plan ends early. 1Excludes special chargeable numbers. Must have a minimum of 3 mobiles under the same account number. 0c calling to Frequently Called Numbers applies to all national calls made from a mobile under the same account number on the Business Association Zero plan. Customer must be a current member of an eligible Association.

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NZ well placed to gain from China dominance China is more committed to market forces than any other economy. Though led by one party it has a single aim and new leaders coming through, said David Mahon, expat Kiwi living in China for 29 years and founder of Mahon China Investment Management Ltd. He was speaking at a seminar in Auckland organized by ExportNZ Auckland.

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hile more complex to analyze than 10 years ago, China is a force that New Zealand needs to consider more deeply, he said.

He confronted the audience with a number of insights: China doesn’t want logs, it wants cut lumber and addedvalue; high end jobs will increase with closer relations. Funding is likely to come from China for the Auckland Councils bold plans for Auckland.

Currently with economic leadership waning in the US and Europe, Asia will be the world’s economic engine – with China, Indonesia and India particularly strong and China the key driver.

New Zealand is in a solid position to gain from this, he said.

New Zealand has the benefit of being one of the few developed, non-aligned nations with a mutual commitment to China and an egalitarian open culture (although racism can be a problem).

Mr Mahon warned New Zealand to consider hard a drift towards the US. Fonterra and Fisher & Paykel have played key roles in building bridges with China. But there are new kids on the block such as Gung Ho Pizza started by two Kiwi guys with a good sense of the market, operating three outlets and voted the best takeaway in a city of 200 million people.

Closer to Indonesia Thanks Murray! than any other SE Asian nation The comments from Indonesian government representative at the Indonesia Forum 2012 in Auckland about breaking red tape and commitments to eradicate corruption were very refreshing, said chief moderator Tony Nowell,Tony formerly lived in Indonesia for 10 Members of the ExportNZ Bay of Plenty executive committee met recently to honour Murray Hill, a member for 25 years who has just stood down. In years. the photo are: Andy Cameron [Oasis Engineering], Murray Hill [Sharp Tudhope “Five to 10 years ago Lawyers], Ian Macrae [Page Macrae Engineering], Angela Wallace [ExportNZ BOP] and Barry Folster [BNZ Partners] these discussions would have been difficult, so play cricket or rugby, directness is not to see a senior official usually a virtue in a person, the legal system [keynote speaker Gusmardi Bustami, is based on the Napoleonic code and the director general for national export population is mostly urban. development in the Ministry of Trade] talk about this is very refreshing,” he said.

Salient facts on Indonesia: Tony encouraged CEO’s to attend the • Population 240 million, mostly urban, APEC CEO Summit in Bali, Indonesia, on 4th biggest country by population October 5-7 next year.

• More than 50% under 30 years Other highlights of the forum included • Largest and fastest growing middlePresident Susilo Bambang Yudhoyono in a class in South East Asia video saying the Indonesian government • Second biggest Facebook users (46 would consider using Private Public million) after the USA – mostly via mobile phones (not computers) Partnerships to develop sectors such as food • Texting (SMS) more prevalent than and beverage and science and technology. email Indonesian business consultant Noke • GDP growth of 4.5% in 2009, 6.1% Kiroyan, president and director of Kiroyan in 2010 and 6.5% in 2011 – the Partners strategic communications and upwards trend continues business solutions company, said it was • 15th largest economy in the world; 7th important for New Zealand exporters largest by 2030 to use a local partner and conduct due • The Rupiah is the best regional diligence before signing any contract. performing currency after Japan’s “Unless you are a big company, you • Official language is Bahasa Indonesia; need a local partner. Not the first one who English is the language of business speaks English.”

• Government: Presidential republic, democratic He sees opportunities for New Zealand • Anti-corruption commission exporters of agriculture, aviation, consumer established in 2005 with commitment products, infrastructure, natural resources to eradicate corruption in 5-10-15 and education. years But challenges include that New Zealanders and Indonesians don’t know much about each other, Indonesians don’t

Speakers’ presentations can be found at www.indonesiaforum.co.nz Business Plus – Exclusive news, advice, learning and networking

Advice 23

By Diana Crossan, Retirement Commissioner

Helping your staff avoid Christmas debt A

s employers we all know how those last couple of months in the year suddenly disappear in the Christmas rush. It’s a busy time as we’re driven to complete projects and meet deadlines before the summer holidays.

The same thing happens in people’s daily lives, and under pressure, attention to finances may get overlooked.

At the Commission, we’re acutely aware that when people return to work in the New Year they often face significant bills from the holiday period.

It really means that many people are starting the New Year on the back foot financially.

The reasons for it are easy to understand: as well as the last minute Christmas rush there’s a lot of pressure to put on a great Christmas for family – and that doesn’t just include expensive presents.

You might be wondering what this has to do with being an employer.

Employees facing stress in their personal lives, including money worries, are likely to carry that stress into their working lives, making them less productive in the workplace.

You can help your staff have a great Christmas where they’re less stressed in the lead up, and return to work in the New Year without massive debts to pay off.

Here are three questions that you could feature in a communication with staff that encourages them to think about Christmas, how much it costs and to plan for it: 1. Have you worked out how much you’ll spend this Christmas?

2. Have you got that money saved up, or are you still saving?

3. What are the ‘must-haves’ for you and your family to enjoy Christmas?

And what are the things you could do without?

Diana Crossan

You could even link to Sorted’s event planner on your intranet, so they can make their own plan for Christmas and start the New Year better off.

Visit sorted.org.nz/calculators/eventmoney-planner.

The Commission for Financial Literacy & Retirement Income is an autonomous Crown entity, and we provide free, independent and impartial information about money matters.

Our vision is for all New Zealanders to be financially sorted. The relevant website is called Sorted.

Business Plus – Exclusive news, advice, learning and networking

EMA MEMBER PROUD MOMENTS NOTICEBOARD

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Entec appointed to service GE’s gas engines in New Zealand

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ecoming the distributor and service provider for General Electric’s range of gas engines is likely to see Entec Services Ltd grow staff numbers – again.

Entec is specialist generator of electricity from gas from landfills and biogas from waste water treatment plant digesters. It has doubled staff to 52 in less than two years. Further growth is anticipated with the new product line, says Bob Weston, managing director.

Entec is wholly New Zealand owned; it has distributed GE’s Waukesha engines for 30 years. ”We are extremely excited about being associated with a prestigious and

respected company such as GE. Our enhanced product range provides our customers with more options and local support from a wholly New Zealand owned company.”

The new gas engines can operate not only on natural gas, but on a range of alternative gases such as biogas, landfill gas, coal mine gas, flare gas and sewage gas. Solutions include Combined Heat and Power (CHP), gas compression, and waste heat to electricity generation in industries ranging from oil and gas to agriculture – on site.

Entec now covers all three product

Gas engine for creating electricity from a range of gases.

lines in both power generation and gas compression.

Entec supplies and services gas engines, generators, compressors, pumps and associated equipment, as well as offering products and services to detect gas in the power generation and oil and gas industries on and offshore.

Fletcher in first PPP building: the Wiri prison

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letcher Construction Company Ltd, a subsidiary of Fletcher Building Ltd, is part of the SecureFuture consortium that has contracted to build New Zealand’s first Public Private Partnership project (with risks and funding shared by the private and public sectors).

The consortium has entered into a contract with the Department of Corrections to design and build the Wiri prison in South Auckland, as well as own, maintain and operate it for 25

years.

SecureFuture is made up of Fletcher Construction to design and construct the prison; Serco that runs Mt Eden Prison to operate it; Spotless Facility Services responsible for maintenance; along with equity participants John Laing, InfraRed and the Accident Compensation Corporation. The consortium is advised by Macquarie Capital.

Design and pre-construction planning has progressed throughout the preferred

bidder stage with construction beginning immediately and a construction duration of approximately two and a half years.

The value of the design and construction contract is approximately $300 million, with completion due mid-2015.

The 70% British ownership of the consortium meant Overseas Investment Office approval was needed to acquire the land, according to Fairfax NZ News, 9/11/2012.

Four wins in architectural awards

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rchitectural design business Creative Arch has, as usual won a number of categories in the annual awards run by Architectural Designers New Zealand Incorporated, a professional body of over 350 architectural designers and architects.

The company won the following 2012 category awards: • Sumar Coastal: ADNZ Regional New Home up to 250 sq m, • Sumar Coastal: ADNZ Regional Interiors, • Best Pacific Institute of Education: ADNZ Regional Commercial/Industrial, and • Selwyn Ave: ADNZ Regional New Home over 250 sq m.

The ADNZ commercial/industrial design win was for a facelift to transform and update a building that caters for both a Private Pacific Education Centre and a WINZ office on the ground floor - within a tight budget and including robust weather-tight detailing.

The finish is a combination of Polynesian flavour with low maintenance primary metal cladding.The existing entrance façade was enhanced with a ‘Fale’ effect.

The Sumar Coastal win was for a client who wanted a relaxing, functional holiday home combining timeless design with hardwearing, low maintenance materials; with merged indoor/outdoor living while providing breakout zones for privacy.

Winning holiday home design

Business Plus – Exclusive news, advice, learning and networking

26

Spring Briefings Schedule - 2012 FREE for all EMA members EMA To register: Call AdviceLine on 0800 800 362; or email AdviceLine@ema.co.nz

Waikato / BOP

Mon. 15th Oct. 9.30am - 11.00am Thames War Memorial Civic Centre, 200 Mary Street, THAMES Mon. 15th Oct. 3.00pm - 4.30pm Trinity Wharf, 51 Dive Crescent, TAURANGA Mon. 15th Oct. 5:00pm - 6:00pm Trinity Wharf, 51 Dive Crescent, TAURANGA - EXECUTIVE BRIEFING Tues. 16th Oct. 9.30am - 11.00am East Bay REAP (Upstairs), Reap House, 21 Pyne Street, WHAKATANE Tues. 16th Oct. 3.00pm - 4.30pm Huka Falls Resort, Huka Falls Road, TAUPO Weds. 17th Oct. 9.30am -11.00am The Holiday Inn, Rotorua, cnr Froude & Tyron Streets, ROTORUA Weds. 17th Oct. 1.30pm - 3.00pm Central North Island Kindergarten Association, 6 Glenshea Street, PUTARURU Weds. 17th Oct. 5.00pm - 6.30pm St Johns Hall, 11 Kakamutu Road, OTOROHANGA Thurs. 18th Oct. 8:00am - 9:00am Kingsgate Hotel Te Rapa, 100 Garnett Ave, Te Rapa, HAMILTON - EXECUTIVE BRIEFING Thurs. 18th Oct. 9.30am -11.00am Kingsgate Hotel Te Rapa, 100 Garnett Ave, Te Rapa, HAMILTON

Auckland

Thurs. 18th Oct. 2:30pm - 4:00pm Bruce Pulman Park, Teamsports Centre, Walters Road, PAPAKURA Fri. 26th Oct 2:00pm - 3:00pm Webinar Mon. 29th Oct. 8:00am - 9:00am Harbour Function Centre, Gate A, Carpark A, Stadium Drive, ALBANY - EXECUTIVE BRIEFING Mon. 29th Oct. 9:30am - 11.00am Harbour Function Centre, Gate A, Carpark A, Stadium Drive, ALBANY Mon. 29th Oct. 3.00pm - 4.30pm Bruce Mason Centre, 1 The Promenade, TAKAPUNA Tues. 30th Oct. 8:00am - 9:00am Crowne Plaza, 128 Albert Street, AUCKLAND CITY - EXECUTIVE BRIEFING Tues.30th Oct. 9.30am - 11.00am Crowne Plaza, 128 Albert Street, AUCKLAND CITY Tues. 30th Oct. 2.00pm - 3.30pm Waipuna Conference Centre, 58 Waipuna Road, MT WELLINGTON Tues. 30th Oct. 4.00pm - 5.30pm Waipuna Conference Centre, 58 Waipuna Road, MT WELLINGTON Weds. 31st Oct. 9:30am-11:00am Counties Inn, Rata Lounge, 17 Paerata Road, PUKEKOHE Weds.31st Oct. 3.00pm - 4.30pm Greyhound Function Centre, Manukau Sportsbowl, Te Irirangi Drive, MANUKAU Thurs. 1st Nov. 9.30am - 11.00am Titirangi Golf Club, Links Road, NEW LYNN Thurs. 1st Nov. 2.00pm - 3.30pm Ellerslie Events Centre, 80 Ascot Road, GREENLANE EAST Fri. 2nd Nov. 3.00pm - 4.30pm EMA 159 Khyber Pass Road, GRAFTON Mon. 5th Nov. 7.30am - 9.00am EMA 159 Khyber Pass Road, GRAFTON Mon. 5th Nov. 11.00am - 12.30pm Butterfly Creek, Tom Pearce Drive, MANGERE Mon. 5th Nov. 2.30pm - 3.30pm Webinar Tues 6th Nov. 9.30am - 11.00am The Trusts Function Centre, 65-67 Central Park Drive, HENDERSON

Northland Weds.7th Nov. 3.00pm - 4.30pm The Northerner, Corner North Road & Kohuhu Street, KAITAIA Thurs. 8th Nov. 9.00am - 10.30am Scenic Circle Bay of Islands, Seaview Road, PAIHIA Thurs. 8th Nov. 1.30pm-3.00pm Kingsgate Hotel Whangarei, 9 Riverside Drive, WHANGAREI

Business Plus – Exclusive news, advice, learning and networking

IN OUR REGULAR SNAPSHOTS OF EMA MEMBER COMPANIES WE DESCRIBE THE BUSINESS OF MASPORT BASED IN AUCKLAND

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Grass mowing greener in US for Kiwi icon New Zealand outdoor power equipment and lifestyle products brand, Masport, has cracked the US market in a period of unprecedented global growth.

M

asport NZ Ltd has increased its New Zealand and Australia-based sales, engineering and administrative staff numbers by almost 50%, to more than 90 in the last five years, to cope with growing overseas demand for high-end lawnmowers.

Entering the US market has been no mean feat for the century-old business but it should be a lucrative one - as 60% of the world’s outdoor power equipment market.

Masport sold over 1000 walk-behind lawnmowers in its first season trading in the US and 150,000 lawnmowers in 42 countries throughout the world in the last financial year.

General manager Steve Hughes is expecting sales to jump by a further 30,000 mowers in the next four years thanks to demand generated partly by being recognised as a quality and reliable New Zealand brand.

He visited the US recently to assess the company’s entry in a market where three manufacturers alone each produce more than a million mowers a year.

“We’ve found a niche in America by designing and engineering a range of high-end lawnmowers specifically for their market conditions. We’re also doing tremendously well in Australia where we’ve trebled sales in

General manager Steve Hughes

“...“Each market also has a completely different set of safety standards. This means we’ve had to create three entirely different product ranges”

the last five years,” he says.

“Being designed and engineered in New Zealand is one factor allowing us to enjoy continued growth. Our two distributors in the US tell us being a Kiwi brand sets us apart.

“Masport’s agility in meeting the specific demands of unique markets in the US, Europe and Australasia has also given the company a leading edge.

“Americans cut their grass longer, Australasians shorter and the Europeans are somewhere in the middle.

“Each market also has a completely different set of safety standards. This means we’ve had to create three entirely different product ranges and over 200 different models of machines.” Mr Hughes says.

Masport predominantly services highend US customers wanting beautifully

landscaped lawns.

“We spent years planning how we would enter the US because we like to take a long-term approach and the lawnmower market is extremely competitive globally, especially with the growing emergence of the low wage economy countries. Masport competes on quality.”

The company’s range of cylinder mowers and tillers is also being sold in the US on a smaller scale.

Masport’s commitment to research and development and a growing engineering division forms a backbone of the company, says Mr Hughes.

Masport’s Mt Wellington headquarters employs 70 staff with more than 20 staff in Australia.

The company started as a family-owned business in 1900s Auckland, established a solid base in the farming industry. It produced its first hand mowers in 1930 and New Zealand’s first petrol powered lawnmower in 1938.

“In recent years we have repositioned the company to better service New Zealanders and now the world,” Mr Hughes says.

Business Plus – Exclusive news, advice, learning and networking

Out & About Indonesia Forum 2012 in Auckland

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| 1 Karen Rolleston [Limestone Risk Management], Paul Oei & Raymond Morse [Igenz] | 2 Farib Sos [Asia Forum] | 3 Lester Khoo [Wise Counsel], Sofia Budiman [Colwall Property Investment] & Mary Camp [Education NZ] | 4 Simon Hegarty [NZ Horticulture Export Authority], Kevin Faure [GNS Science] 11 12 | 5 Catherine Lye [ExportNZ Auckland], Stuart Walbridge & David Catty [ASEAN NZ Combined Business Council] | 6 Barry Hellberg [NZ Retailers Association] | 7 Noke Kiroyan [Kiroyan Partners & NZTE Beachheads Indonesia] | 8 Jafar Davari [Chemrecovery Industries] | 9 Fiona Natusch [Asia: NZ Young Leaders Network], Laura Young [Ministry of Foreign Affairs & Trade], Jo Douglas [Wintec] | 10 Surinda Ogra [ASB Bank], Tim Robertson [NZ Export Credit Office] & Alastair Cullwick [Wallace Corporation] | 11 Ian Clark [Villa Maria Estate] & Trevor Elia [Kiwi Fresh NZ] | 12 Eric Greenop [Asnet Technologies] & Graeme Squire [Dulux Powder Coatings]

ExportNZ Bay of Plenty’s Business Evolution breakfast

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| 1 Angela Thomas [KPMG] | 2 Arthur Jordan [formerly FIL], Alan Bougen [Comvita] & Greg Jarvis [Bluelab] | 3 Kylie van Heerden [Sharp Tudhope] | 4 Julie Carlson [Puma Dart Products] | 5 Darren McGarvie [BNZ] | 6 Traci Haupapa [THS Associates & FOMA] | 7 Irwin Munroe [IRL], Angela Wallace [ExportNZ BOP] & Cameron Hill [Mainfreight]

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EMA Alert

OCTOBER

The Ultimate Sales Professional

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This programme will take you on a developmental journey that will help you become a high performing sales professional. It is run one day a month for 10 months and due to popular demand, we have added new course dates.

26

24-25

Over two days, understand the key processes and concepts of recruitment, to select and build a more robust workforce, to help achieve your organisation’s goals.

Admin Professionals & PA’s Conference

30

A day out of the office learning all those important tips and secrets of how to make the office hum sweeter!

15th Annual Credit Management & Debt Recovery Conference

Auckland | Karen

Recruitment

31

This conference will help you brush up on all the latest essential skills required for you to be a successful Administrator/ PA and improve everyone’s performance around the office.

People are the key to any business, finding and employing the right ones can be a tricky business. Join us for this half day focused on giving you all the tricks and tips you need to ensure your new recruits are the best they can be!

Auckland | Lucila

Auckland | Karen

Auckland | Karen

NOVEMBER

New Customer Service staff will learn the importance of providing top quality services, how to continuously improve customer satisfaction and be a top performer.

Health and Safety Representative Training - Stage 3

1-2

Review and build upon the competencies developed in previous stages and increase your knowledge, skills and confidence in the role as a Health and Safety Representative.

Practical Hazard Identification and Control

15

The first and most crucial step in any safety programme is a method for the systematic identification and control of hazards within the workplace.

Auckland | Craig

Dealing with Difficult People

Procedural 21-22 Fairness Conference This two-day conference explores procedural fairness issues in employing. We focus on practical tools and important employment law obligations that will ensure you are current with ‘best practice’ and all the necessary and practical developments in the field.

Auckland | Karen

5

Difficult people do exist at work and can cause untold damage to people’s productivity and well-being if not addressed. Dealing with these types of people is an essential component of management.

Auckland | Deborah

Hamilton | Craig

25

EMA recognizes the crucial role that credit management has in the financial management and security of your organization. Slow receivables have a negative effect on cash flow and the overall working of your capital needs. The basics of debt management have not changed, but with legislative and technological developments come a range of new issues.

Auckland | Deborah

Auckland | Deborah

Delivering Service Excellence

Recruiting the Right Person

Did you know, EMA Tailored Training can deliver a wide range of workshops fully customized to reflect your workplace… at your workplace?

Contact Rhonda Spence rhonda.spence@ema.co.nz Mobile 021 664 321

Problem Solving and Decision Making

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Be able to confidently address problems in the workplace by knowing how to define them and develop optional solutions, which you can then evaluate and make effective decisions upon.

Auckland | Deborah

Conference Contacts Karen Joe | 09 367 0959 | conferences@ema.co.nz Training Contacts Lotta Bryant | 07 839 2710 | lotta.bryant@ema.co.nz Kevin Chambers | 09 367 0958 | kevin.chambers@ema.co.nz Craig Garner | 09 367 0907 | craig.garner@ema.co.nz Deborah Law-Carruthers | 09 367 0947 deborah.lawcarruthers@ema.co.nz Lucila Marquisio | 09 367 0961 | lucila.marquisio@ema.co.nz

www.ema.co.nz | learn@ema.co.nz