Small firms to restart hiring

Adding one staff member to a small business can make a big difference. Photo / Thinkstock

Small businesses are set to increase staffing levels with 22.5 per cent of them planning to raise their permanent headcounts before the end of the year.

Hudson's Employment Expectations Survey of 1089 employers found South Island businesses even more confident with 38.6 per cent of small businesses planning new hires.

"It's a promising indicator," said Hudson New Zealand executive general manager Roman Rogers. "We probably want to see another quarter or maybe two of similar sentiment among the small to medium-size organisations to get a sense if there's a trend."

This quarter's survey showed sentiment rise half a percentage point over the previous quarter. About 95 per cent of New Zealand businesses have 20 or fewer employees. Rogers says these small business owners are also thinking as consumers, which means the survey is not only a positive indicator of business sentiment but a reflection of improving consumer confidence.

The most optimistic industries and economic sectors are construction, engineering, manufacturing, property and information technology.

More than half of these employers said they intended to increase the headcount in their business before year's end. That trend is set to continue through to next year because the large-scale reconstruction of the Christchurch CBD is yet to get under way.

"There is a shortage of available talent that can match the requirements of the Christchurch rebuild."

Information technology workers in the lower North Island shouldn't have much trouble finding work, with 58.6 per cent of businesses needing project directors and managers.

Hudson showed less demand for workers in Wellington but Rodgers says that's typical given the uncertainty in the lead-up to a general election.

The telecommunications sector in the lower North Island nose-dived with the worst sentiment in the survey. Some 47.4 per cent of employers there plan to cut headcounts.

The demand for temporary or contract workers dipped 2.8 per cent with a net 12.4 per cent of employers planning to increase the size of their contracting/temporary workforce.

Hiring intentions for contracting/temporary IT workers is at a six-year high. Some 43 per cent of employers in this sector are planning to increase headcounts before the end of the year. But about 10.5 per cent of employers will be reducing their contracting/temporary staff numbers.

"Even after the first quarter of this year, many businesses haven't achieved the growth or performance they were hoping to achieve," says Rodgers.

That's left staff numbers low and workloads high, particularly at the smaller businesses. Rodgers says one additional staff member can make a big difference. "If you have a smaller scale and your people get under pressure and are working at breakpoint, increasing your headcount by one person in a team of 20 is a reasonable improvement ."

However, business owners are still focused on quarter-to-quarter results rather than taking a long-term view to hiring. Unless there is a significant uptick in 2012, businesses are likely to stay in a holding pattern.

"If they haven't seen significant increases or improvement in performance I think we'll probably go to back to what we've seen this year, which is more about steady as she goes."

Contact David Maida at: www.DavidMaida.com