As I ease back into work after the Christmas break, I’ve been pondering the year ahead. What challenges are ahead for Bay of Plenty businesses and how will these impact HR practices?
What are the trends to look out for and where should businesses be putting their energy when it comes to recruitment, retention and development in 2019?
There are a few factors already in motion that will likely influence the way things play out this year. First, the employment law changes being implemented by the Labour Government. Second, the labour market itself, and third the changing demographics of the workforce. Each will influence HR practices in 2019.
Employment Law changes
The Employment Relations Amendment Act 2018 restores protections for employees and strengthens the role of collective bargaining in the workplace.
A number of changes were introduced last year, with further changes due from April this year.
The key changes include:
- Reinstating prescribed meal and rest breaks.
- Strengthening collective bargaining and union rights.
- Restoring protections for vulnerable workers, such as those in the cleaning and catering industries, regardless of the size of their employer.
- Limiting 90-day trials to business with fewer than 20 employees.
- The Domestic Violence – Victims’ Protection Bill changes come into effect on 1 April 2019. The new law entitles employees affected by domestic violence to up to 10 days of paid domestic violence leave per year in order to deal with the effects of domestic violence.
Employees will be able to take this leave as needed – similar to the existing sick leave and bereavement leave provisions.
The government is also increasing the minimum wage to $17.70 an hour as of April 1, with further increases to take it to $20 by 2021.
This will have a significant impact on the cost structure of many businesses, particularly SMEs, and just how it will impact the general consumer is a hot topic at present.
As a result, businesses will need to review employment agreements, policies and practices to ensure they reflect these changes.
The tight labour market
Last year was a very busy year in recruitment, but 2019 might be set to top it. With continued economic development and tourism growth in the region and the attraction of the lifestyle, it could well do.
The latest data from Jobs Online, issued by the Ministry of Business, Innovation and Employment, shows a 1.8 percent increase in vacancies in the Bay of Plenty from October to November 2018.
Nationwide, difficulties in finding staff with suitable skill levels are causing major issues for employers.
According to the Employers and Manufacturers Association (EMA) 2018 Employers Survey, 79 percent of employers said it’s “difficult” or “very difficult” to find skilled staff.
Needless to say, attracting the right kind of talent for your business looks as though it will continue to be a challenge in 2019. Skill shortages are likely to continue across a number of sectors.
Gen Z is now joining the workforce in larger numbers with the oldest members of the generation now 23 years-old.
They’re expected to comprise up to 36 percent of the global workforce by 2020.
At the same time, people are no longer retiring in their early 60s.
People are working longer because they can – and in many cases, because they have to due to limited retirement savings.
This presents a challenge for employers. Older employees bring experience and loyalty to the office, while the new entrants are digital natives who are looking to do things differently.
The challenge will be getting the best out of both generations.
Companies will need to adapt their people strategies to ensure that they can attract young talent and retain their top talent – both young and old.
These driving factors highlight the need to focus on four key areas during 2019.
- Policy and procedure – updating to best practice and reflecting the pending changes.
- Recruitment – attracting good staff and paying them fairly.
- Flexible work arrangements – to cater for the needs of an increasingly diverse workforce.
- Employee engagement – to maximise staff effectiveness and ensure key staff are retained.