Covid 19 coronavirus: How Tauranga small businesses saved jobs during crisis

A new survey found 92 per cent of Tauranga's small businesses did not make anyone redundant following the fallout of Covid-19. Photo / George Novak

Small businesses in Tauranga managed to keep their staff in the turmoil of Covid-19 and national lockdown, according to a new survey.

The Government wage subsidy helped many get through and business leaders say it reflected an optimistic mood for the future.

But they warn the scheme will end soon and may have an impact on job security.

A Priority One, Tauranga Chamber of Commerce and Tourism Bay of Plenty survey at the end of the level 4 lockdown found 92 per cent of the 451 small businesses in Tauranga that responded did not make anyone redundant.

Nigel Tutt, Priority One's chief executive, said the statistic reflected an optimistic mood for the future despite the obvious short-term disruption.

"The wage subsidy would have helped this, with 80 per cent of the businesses we talked to receiving it."

But Tutt warned the 12-week scheme will end in the next few weeks, depending on when businesses applied.

"The scheme provided a payment to contribute to wages in exchange for businesses keeping specified staff employed, so when the period finishes so does the obligation to keep staff employed."

Tutt said employers could apply for an extension if they were in really bad circumstances but how businesses were affected now depended on their market, location and size.

Small businesses were more at risk in a recession, Tutt said, because they generally had lower financial resilience.

Priority One chief executive Nigel Tutt. Photo / File

"We have around 7500 businesses in the region, with around 80 per cent of those employing fewer than 10 staff. Again, the positive signs following lockdown should help those businesses recover."

There was also a fair amount of uncertainty for the future and the desire to embrace changes, he said, whether those were digitisation or working arrangements.

"We expect that to still be relevant for months to come," he said.

"On the positive side, consumer spend in the region has climbed back up to pre-Covid-19 levels which will help many employers return to normal."

Tauranga Chamber of Commerce chief executive Matt Cowley said the wage subsidy allowed employers to retain most staff and "hit the ground running" through levels 1 and 2.

"It is an expensive process for employers to let staff go, just to recruit and train new staff once the economy opens up again. Then there is a risk that the new staff are not as good of a fit as the previous staff."

Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / File

Cowley said the sectors less likely to retain staff were the ones most impacted from the lockdown: construction, retail, tourism and entertainment.

Stratus Blue general manager Mike Bell said the IT service business had to alter its focus rapidly to support its customers as the lockdown hit and their workload shifted almost overnight to remote maintenance and support.

"Some customers had to put large projects on hold. As with many New Zealand businesses we were negatively impacted financially as some key revenue streams dried up."

Bell said it was "absolutely imperative" to retain his 13 full-time staff and two contractors.

"Primarily because they are the lifeblood of our business. We wanted to do everything we could to enable our team to be able to continue to support themselves and their families at a time of great uncertainty."

Bell said his team also wanted to give their customers confidence by keeping the familiar faces and "provide continuity at a time of great change".

"On a more strategic level, we had done a lot of work to build our business with the right roles to deliver our services and the right people to fill those roles.

"We didn't want to lose the investment and impetus gained from doing this work and implementing these structures."

Bell said monitoring data about the company's position and operations allowed it to make informed decisions as circumstances and Government directions changed.

"We had contingency plans in place for best, likely and worst-case scenarios."

Bell said they applied for the wage subsidy because it was obvious income would drop significantly despite being able to trade through the lockdown period.

"It was important to have that buffer to enable us to support the staff even if we were faced with the worst-case scenario – which, thankfully we weren't."

Bureta Physiotherapy and Wellness co-owner Blair Jarratt said he adapted the business in order to retain his staff. That included introducing telehealth.

"Like a lot of New Zealand, we had about 48 hours to close our business down."

Jarratt said his team already had the tools to be able to deliver their services online but his team had to adapt to a new mindset.

The team went from a predominantly personal service to interacting via video links and online, he said.

"We got a lot of research out to the team to show them the effectiveness of telehealth."

Although he had concerns that the numbers of injuries declined during lockdown, by using telehealth the team was able to pick up new referrals and stay connected with clients.

"[Telehealth] has opened up new avenues for the ability to interact with people elsewhere in the country too."

Jarratt said it was important for him to be able to retain his staff.

"We are a service-based industry. We need our staff. It would have been very sad to have to lose any of them," he said.

"The people aspect of our business is the most important. We don't sell product, we sell a service."