26 June 2017

Business confidence high in Southland, but staff recruitment remains a challenge

Southland businesses are reporting increased sales and confidence, but challenges in recruiting and retaining staff remains a challenge for employers.

An online survey of 401 Southland businesses, conducted by Venture Southland, has revealed staff recruitment is the biggest challenge facing Southland businesses for the fourth year running.

Businesses are responding in a number of ways.

“Fifty seven per cent are planning to invest in staff training and up-skilling and 36 per cent are planning pay rises,” the 2017 survey report says.

The report says 48 per cent of Southland businesses are having challenges recruiting the right people, up from 38 per cent in 2014.

More than half of the businesses surveyed believed attracting staff was the top issue likely to affect them in the next year, with broadband quality the second biggest issue.

Businesses were beginning to think about how to change the way they worked to recruit and retain employees.

Despite the recruitment and broadband challenges, the survey reflected a positive vibe in the business community.

More than 90 per cent of businesses reporting increased or steady sales, up by 11 per cent on 2016.

Just eight per cent of businesses were experiencing deceased sales, a record low when compared to 19 per cent in 2016, 14 per cent in 2015 and 12 per cent in 2014.

Other key findings from the survey were:

- Nearly 80 per cent of businesses are positive about the Southland economy and business environment - up from 59 per cent in 2016.

- 87 per cent of Southland businesses are positive about their own business - up from 78 per cent in 2016.

- The most confident sectors are tourism and the accommodation and food sector.

- 82 per cent of agricultural businesses are optimistic about the environment, and 86 per cent are optimistic about the future of their business.

Venture Southland business and strategic projects manager Steve Canny was upbeat about the survey results.

“In a doom and gloom scenario businesses batten down the hatches, but what we are seeing clearly from this year’s survey is that businesses throughout Southland are quite optimistic and the economy is quite strong.”

Businesses were no longer getting out the chequebook to buy skills, he said.

“They are having to invest in training ... and they are having to think long and hard about succession plans.”

Many businesses were seeing the value in young people who had digital skills, he said.

Southland Chamber of Commerce chief executive Sheree Carey said increased confidence in the dairy and tourism industries was encouraging, as were rebounds in optimism.

Southland businesses had shown resilience through the dairy prices drop and it was great to see confidence coming back up, she said.

“This is flowing through to increased sales.”

The confidence around service industries associated with tourism was particularly pleasing to see as visitor numbers to Southland continued to climb, Carey said.

It was also pleasing to see the need for digital marketing recognised by Southland businesses.

In response to the challenges around recruitment, she said it was encouraging to see the number of businesses focused on staff training and ensuring remuneration levels were where they needed to be.

However, policies and plans which encouraged people to move to the region – such as the Southland Regional Development Strategy – needed to be pursued vigorously, she said.