What type of short-term hire will work best for your holiday rush?

Many small business owners are all too familiar with the holiday rush. Just as most of the country is starting to wind down and think about how they’ll spend the festive break, many in retail and hospitality are facing their busiest times of the year.

Making the most of the holiday shopping and festive season frenzy often means bringing more hands on deck. And that’s where it can get complicated.

There is more than one way to hire temporary staff. So how can small businesses hire the right sort of help while keeping up with any compliance requirements?

Temps vs casuals: What’s the difference?

Employsure Senior Employment Relations Adviser, Michael Wilkinson, says small businesses need to be aware of the different requirements and responsibilities when hiring temporary workers and casuals.

“When you use the word temp, you need to understand what that actually means,” he says. “It’s usually referring to a temporary contract, meaning a fixed-term employment agreement for a set period of time.”

Employment New Zealand says a temporary employee is someone who is hired for a specific time period or when a particular event occurs, for example, a worker covering for another employee’s parental leave or a person engaged for a seasonal peak to complete a project.

A fixed-term agreement must include a “genuine reason based on reasonable grounds” for the shorter-term contract, which must be made known to the employee. For example, this could be the end of the holiday period or the completion of a project.

On the other hand, a casual worker is one who is employed on an intermittent basis, without regular shifts or the obligation to accept the work.

Under New Zealand employment law, casual workers need to know their work hours will vary and that they’re not obliged to come to work whenever the employer might need them.

By law, all employees – whether casual, fixed-term or permanent – must also have a written employment agreement. This should explicitly state if the employment has a fixed term and why, or whether it is of casual nature with an expectation of varying hours.

Unemployment at historic lows

Employsure’s Wilkinson says small businesses should assess their staffing requirements for the holiday season and the predictability of their work flows, before hiring staff.

He says, amid increasing unpredictability in retail trading, some employers choose the flexibility of casual staff so they can meet fluctuating customer demands.

But if the work flow is predictable, he says small businesses can engage a fixed-term worker to meet demand – provided they have a reason for the role to end.

But he advises employers to consider what they are “locking themselves into”.

“A casual employee you don’t have to roster. There’s no obligation to do that, whereas a permanent or fixed-term employee needs to be provided with the hours guaranteed in their employment agreement.

“There are always trade-offs.”

The time to act is now

Kirk Hope, the CEO of small business peak body BusinessNZ, says there are already many employers searching for workers and finding skilled staff is a “top concern” for small businesses.

“The labour market is currently very tight in New Zealand,” he says.

“Unemployment is around 4% – an historically very low level. There are many casual job openings in retail in Auckland and in horticulture in regional areas, along with other types of casual vacancies, in the pre-Christmas period.”

Wilkinson says given the approaching peak trade for the retail and hospitality sectors, employers should act immediately to recruit and train their additional staff. Finding yourself short of staff during a peak trading period can very easily mean you leave potential profits on the table.

Need to ramp up your staff numbers ahead of the summer season? Talk to Prospa about how a small business loan could help provide cash flow support, so you can meet extra wage demands.

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.

How small business owners can stay on top this silly season

It can be tough running a small business over the holiday period – while everyone around you is planning trips to their favourite coastal town, many small business owners are facing a time of either feast or famine.

Each brings their own challenges, from either organising extra staff and negotiating cash flow over shut down periods to making sure you get paid before everyone disappears for the holidays.

Here’s how you can minimise these common financial stresses for your business ahead of the end-of-year (EOY) period.

Negotiating cash flow strains

Planning ahead to ensure your cash flow over the EOY period can cover holiday pay and other expenses is vital, says Tibor Mackor, Director at Auckland-based Better Business Strategies.

“A lack of cash flow can cause payment challenges where you, as the owner, are not able to pay your staff, suppliers or yourself,” he says.

Phil Holland, Owner and Founder of Tauranga-based Love Your Business, says it’s critical you start planning early.

“If your business does close down over Christmas or it’s a quiet time, make sure you’ve reflected this in your forecast and working capital,” he says.

If you think you’re going to come up short over the EOY period, Holland suggests you:

  • Organise temporary business finance for the holiday season.
  • Chat to your main suppliers about stretching your terms during that period.
  • Get deposits from customers if you’re able to do so.
  • Minimise any unneeded expenses while you’re shut down.
  • Chase up debtors now – don’t wait or try to do it over the holiday period when they’re away.

Meanwhile, to make sure you’re on the front-foot next year, Mackor recommends you build up a buffer throughout the more prosperous times of the year to act as a safety net if needed during the EOY period.

“I usually recommend business owners save 5% of turnover and teach them to run their businesses on the remaining 95% turnover,” he says.

Chasing up debtors before EOY

When it comes to making sure your invoices are paid before everyone takes off on holidays, Holland says the key is communication and setting expectations.

He suggests small business owners:

  • Bring forward invoice dates (and communicate why).
  • Get your invoices out fast to increase the chance of being paid on time.
  • Offer a payment discount or gift if clients pay their December invoice by the due date.
  • If you have a slow payer, get in touch early and have a discussion about paying on time – set your expectations and boundaries.

To help with tardy debtors, Mackor recommends you obtain a 50% deposit on any work to be done for a client, which helps bring immediate cash flow into the business.

He also suggests making sure your invoice terms and conditions are watertight, so that payment happens when it should.

Using accounting software where your clients are regularly reminded about the outstanding amount, can also help speed up payment. “For example, Xero has a facility where you can program the sending out of a statement weekly,” he says.

Coping with extra staffing demands

If you’re a retail business, Carli Saw, Founder of HR consulting firm Strawberry Seed Consulting, who works with clients in New Zealand, says you need to start prioritising your holiday staffing arrangements pronto.

When looking to put on additional staff, she says the first thing you need to do is define exactly what role you need.

“Where most smaller companies fall down on recruitment is, they just say ‘Hey, we need staff, PM us if you’re interested’,” Saw says.

“But they haven’t really got a clear idea of what they can pay or the role they’re offering, before they go to market, and that causes confusion and delays.”

She says recruiting new staff doesn’t need to cost you hundreds of dollars on recruitment platforms such as SEEK, either.

In fact, she suggests posting jobs on Facebook, in relevant local community groups.

“There are a lot of job boards on Facebook that won’t cost you anything. You can even do promoted posts for a very low fee and target specific demographics,” she says.

To stay open or closed on public holidays

Another big financial decision you’ll have to make in the lead up to the EOY period is choosing what public holidays to stay open for, and what public holidays you’ll be pulling down the shutters for.

To assist you in your decision, we’ve created this handy infographic, which runs you through all the costs and benefits to keep in mind.

If the best-laid plans aren’t looking like enough to get you through the holiday period in one piece, talk to one of Prospa’s business finance specialists about how a small business loan might help ease any cash flow strain. 

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.

Infographic: Is it worth opening on a public holiday?

The rest of the country might love a good ol’-fashioned public holiday but it’s more complicated when you’re a small business owner.

Public holidays aren’t all sleep-ins and empty roads – instead you often need to figure out how to maintain adequate cash flow in a week where you miss out on a day of trading but still get the same amount of bills coming in.

It’s part of the reason more and more businesses are trading on public holidays, but making that call for your small business requires weighing up multiple factors. Opening often means paying higher penalty rates, but foot traffic can be unpredictable.

Every business (and every public holiday) is different, so there is no magic formula for determining whether it’s worth your while to forgo the lure of a day off in favour of opening up, but there are some key considerations that need to be factored into your decision.

To be or not to be (open): The public holiday question | Prospa NZ

If you need a little financial help to tide you over during the quiet holiday period, talk to Prospa about how a small business loan might be able to help support cash flow.

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.