KEY POINTS:
A third of New Zealand businesses surveyed by Business New Zealand say they have more staff than they need and are planning redundancies and reducing working hours in the face of a worsening economy.
The business lobby group surveyed 647 companies to help inform its recommendations to the
Government's Jobs Summit being held later this week.
It warned the survey was not fully representative of all businesses, but there was a strong number of responses, particularly from small and medium sized firms.
The survey asked about intentions regarding redundancies and 33 per cent said they had more staff than they needed.
Industries with the most surplus staff were manufacturing (42 per cent) and wholesale, retail, accommodation, cafes and restaurants (38 per cent).
Twenty-five per cent of those businesses who believed they were overstaffed were planning redundancies, 38 per cent were planning to reduce working hours and 37 per cent were planning to do both.
"The good news, however, is that many employers (40-70 per cent) would reconsider making staff redundant if the Government provided some assistance by way of wage subsidy, additional subsidised annual leave or other help," said Business NZ chief executive Phil O'Reilly.
The survey also suggested the credit crunch may not be as widespread as thought.
The companies were asked about recent incidents where credit lines were withdrawn, or applications for debt financing or a credit injection were rejected.
Between 8 and 10 per cent of respondents considered the rejection to be unjustified, given their current and likely future profitability.
This was a negative outcome, but not as significant as generally believed, O'Reilly said.
"It indicates that banks and other financial institutions are still seeking to lend, but that more stringent conditions are being attached."
Meanwhile, the survey's news was better for trainees and apprentices.
Of businesses employing apprentices or trainees, 90 per cent said they intend to keep them on, despite the worsening economic situation.
Of the 10 per cent considering laying off apprentices, many said they would retain them if the Government shouldered some of the associated costs.
The businesses surveyed also showed commitment to training, with 58 per cent considering the economic environment provided an opportunity to upskill workers for their future needs.
O'Reilly said the commitment was heartening.
"Our recommendations to the jobs summit this week will pick up on these, with ideas for expanding tertiary education where it is linked with employer and industry needs, exploring support for employers to retain their employees while releasing them for training, and other ideas."
"However it is worrying that 57 per cent of the respondents don't intend to hire any new apprentices. This is an area where the Government needs to think hard, not only at the jobs summit but also in its normal policy development."
Thirty-eight per cent said they currently had a skills shortage in their business.
The survey also asked what would be the most helpful areas of regulatory reform.
Priorities were employment law (including the Holidays Act), extending the 90-day trial periods to larger firms, skills, the Resource Management Act and local government.
O'Reilly said he looked forward to representing the ideas of his members to the Jobs Summit and to the Government's normal policy development processes.
The recommendations include looking at alternatives to redundancies and softening the blow to workers if redundancies are necessary.
NZPA
