New Zealand employers should cease complaining about the increase to the minimum wage and have greater ambitions for their businesses and their people. Indeed, they should view next month's $1.20 increase to the minimum wage and the growing calls for businesses to pay the living wage as a discipline for change.

A strategy that depends on low wages for success is doomed to failure; there is no shortage of people around the world willing to accept lower pay for similar work.

Meanwhile, technology continues to break down the barriers to companies accessing these deep pools of offshore labour.


An obvious way to win new customers and increase profits is to keep a tight limit on staff wages.

But over many years we have plotted a different course. We actively seek to align the wages of our staff with the value we generate for our customers.

We do this by focussing on the areas where we can make a real difference, by being smart with technology and training our staff well.

The strategy has paid off for our customers and our team. Now none of our staff are on the minimum wage and over 60 per cent are earning more than the living wage. We are also aiming to increase our pay rates well ahead of government requirements.

For many years we have faced competition, both here in New Zealand and offshore, from call centres which have pitched for new business with a promise of lowering the cost for each call made into the call centre.

John Chetwynd. Photo / Supplied
John Chetwynd. Photo / Supplied

The backlash on this strategy has been palpable. A New Zealand customer seeking help about a faulty product or electrical fault will adopt a much less charitable attitude if they discover that their call is being answered from a cavernous hall in the Philippines or India.

Customers expect contact centre staff to understand that Grey Lynn is a suburb of Auckland, that 'gudday' means hello and that 'mate' is not always a term of endearment. They want to be treated intelligently rather than being the subject of a crude checklist.

We recruit formally unskilled staff, who are good at listening, adept at quickly solving problems and most important of all are pleasant and engaging.


We take advantage of the internet and social media to improve customer experiences. And we have developed sophisticated knowledge management tools that allow us to carefully capture and curate the stream of customer queries coming into our contact centre.

We are able to triage calls from various channels such as the internet and social media and choose those contacts that are best resolved with a human response. When customers raise the most intractable of issues a sympathetic and helpful ear can often enhance a brand.

Our customers are coming to understand that this service is worth a lot more than the brute force offered by our overseas competitors. More to the point, because we spend less time on the phone, we can often offer this service at a lower total cost.

We are not a special case. Similar options are open to almost any industry you could care to mention.

Only last week I was in Sydney and I was intrigued to see an enormous queue outside a café called Bake Bar. Figuring that such a queue indicated this café was offering something special for breakfast, I went over to investigate and saw what must be one of the best customer service operations I've experienced.

Walking down the line I saw a welcoming and enthusiastic waitress taking orders (and accepting payment) for coffee and pastries using a computer tablet. I joined the line and within five minutes was leaving the shop with what I must say was a very good coffee.

The time spent in the line was incongruent with the length of the line. I have no doubts that Bake Bar was very profitable and, at a minimum, it had the opportunity to share its success with its best employees.

There are many other similar examples. Just look at what Xero has done for the accounting profession. Accountants have been freed from the drudgery of bookwork to focus on what their customers really wants – good business advice.

For time immemorial New Zealand business has reaped the rewards of hiring workers willing to train and learn on the job and we are better off for it. Low wages will never be a route to national prosperity.

- John Chetwynd is the Founder and Chief Executive of Telnet, New Zealand's largest independent contact centre.