21 November 2013
The government has designed a Job Support Scheme for larger companies that is decoupled from training, so what might work as a practical alternative for smaller businesses?
With over 1 million employees in companies with less than 100 employees, there is a huge need for government support to prevent redundancies.
One clear option must be to retain the original proposal of a training link, as the incentives will then be there for all parties. The government (read taxpayer) will stump up the cash to help support workers while they train, but in return will have lower costs associated with paying unemployment benefits, and will have both a more skilled workforce and more money circulating in the economy. The employers will probably have to bear some of the cost and certainly have an administrative cost of co-ordinating this, but will save on redundancies, future recruitment costs and again have better skilled workers. And the individuals themselves may well have to take a small decrease in pay, but that is less of a challenge than the prospect of being made redundant and losing it all!
There will obviously be no mandatory 9-day fortnight imposed by government; otherwise companies that are not affected by the downturn would have to increase staff by 11% in order to stand still – a cost that would not easily be absorbed. Where positions within companies will still be needed full time a 9-day fortnight would need to be applied just to certain individuals. But for Small Businesses so much is done as a team that it is difficult to envisage this happening. Instead it is likely that the company will simply shut (all or a part of its business) for one day a fortnight. More than that, I see a need for customers and suppliers to work together in scheduling these days as “teams” often transcend corporate borders. So we can look forward to sectors closing on the same day.
But without the training link it is possible that employees won’t accept any such proposal. So put yourself in the shoes of the trainers. This will create large potential demand for training on one particular day in each fortnight. This is not something that current training supply is geared for, and so will create a fantastic business opportunity for those in the right place. Given that the need for this is now and may (hopefully) last no more than this year, it will be a great test of training organisations and in particular of Industry Training Organisations (ITOs) to see how fast they can arrange suitable programmes to provide the skill development that people will be seeking. The NZQA should also gear itself up for a significant increase in accreditation applications – as they could be needed very quickly indeed.
So, what advice can I offer to small business owners? At this stage it must still be ‘watch and see’, but as responses will be needed quickly once the government confirms its initiative, I suggest you do some scenario planning. Ask yourself some simple questions: “How easily could we run the business on 9 days in a fortnight?”; “Are there some positions that we need to keep manned 5 days every week?”; “What skill sets do we need to develop in our employees?”; “Who would I contact to arrange the training?”; “Do I have some people that may require special consideration – like part-timers already working 6-day fortnights or working 10 4-hr days?”
I believe that employers who already know what they want will be the most likely to influence the training provided – the others will follow behind having to take what is offered.