Onehunga FM podcast: Trailer – What’s in a name?
In this local body election, what if we could do a little more than a tick and a prayer?
Tim McCready chats with candidates and commentators throughout the local body elections to tease out people’s visions for Onehunga and the surrounding neighbourhoods.
Trailer: This podcast from Onehunga FM is all about local body politics in the Maungakiekie-Tamaki ward.
The name comes from a significant figure in the region’s history.
Please share the show with your friends and neighbours, and follow along on social media, as we hear from candidates and commentators throughout the local body elections.
Surviving the Bears: Five big capital markets trends to watch
Surviving the Bears: Five big capital markets trends to watch
Just when there was hope emerging that the Covid-19 pandemic was being brought under control and turning a corner, Russia’s invasion of Ukraine has reignited uncertainty and had a wide-ranging impact on the global economy and capital markets.
On top of that, many of the world’s central bankers — including New Zealand’s Reserve Bank — have now turned hawkish, unleashing an aggressive tightening of monetary policy.
This is happening against a backdrop of megatrends that continue to shape the financial services sector.
Companies face myriad challenges, but they also have an opportunity to redefine themselves and remain competitive by embracing ESG principles, prioritising digital innovation, and investing in their people to ensure they retain and grow their capability.
Here is a closer look at some of the most significant issues expected to shape the capital markets over the next year:
1. Central banks tighten
Central banks are having to carefully navigate monetary policy intervention, finding a balance between preventing high inflation becoming entrenched versus slowing the economy and causing pain for those already feeling the crunch from the rising cost of living.
We are acutely aware of New Zealand’s interest rate hikes. The Reserve Bank has steadily raised interest rates to reach a six-year high of 2 per cent and has projected it may need to rise to 3.8 per cent by mid-2023.
This is happening around the world. The UK’s Bank of England has raised interest rates in a fifth straight meeting, sending a strong signal that bigger moves will follow if needed to fight resurgent inflation. Earlier this month, Switzerland’s central bank raised interest rates for the first time in 15 years – also hinting that it was ready to hike the rate further.
Inflation in the United States has hit a 40-year high of 8.6 per cent and the Federal Reserve has responded with the sharpest raise of interest rates since 1994. When that news hit earlier this month, the tech-heavy Nasdaq with its speculative stocks fell over 3.5 per cent.
The S&P 500 index fell more than 20 per cent off its peak and officially hit bear market territory, with JP Morgan analysts suggesting the result now implies “an 85 per cent chance of a US recession.”
Here, analysts expect a short and shallow recession, but there are fears that poor results in global economies may make it worse than anticipated. US Federal Reserve chair, Jerome Powell said “no one knows with any certainty where the economy will be a year or more from now,” making it likely that investor concerns will continue for some time to come.
2. Geopolitical shockwaves test capital markets
Some four months into Russia’s invasion of Ukraine, the extended conflict has resulted in rampant increases in the cost of commodities and energy, ongoing supply chain disruptions, and a tightening of financial conditions.
Soaring inflation around the world and lower global growth are some of the most noticeable economic consequences of the ongoing unrest. Deglobalisation, labour market challenges and housing market factors are expected to continue to contribute to inflationary pressures, while slowing growth in major economies has raised the spectre of stagflation — the combination of low growth and high inflation — becoming a real possibility.
Closer to home, China’s zero-Covid policy and the risk of further outbreaks and lockdowns continue to concern markets about longer-than-expected disruptions to global supply chains and further inflationary pressures. The zero-Covid policy, which tolerates slower economic growth in favour of the elimination of the virus, shows no sign of abating ahead of the 20th National Congress of the Chinese Communist Party later this year in which President Xi Jinping is expected to secure an unprecedented third term.
There are signs geopolitical ramifications could reverberate across capital markets for some time and will test the resilience of the financial system.
Chief economist at the International Monetary Fund, Pierre-Olivier Gourinchas, warns that the world is at risk of fragmenting into “distinct economic blocs with different ideologies, political systems, technology standards, cross-border payment and trade systems, and reserve currencies”.
3. ESG is tested
Investing within an ESG framework — where environmental, social and governance factors are considered — has become the fastest-growing segment of the asset management industry. However, the lack of standardisation in reporting has brought with it criticism that non-financial metrics might be misrepresented, making ESG investments hard to define and almost impossible to compare data across firms. Cracks in ESG investing are beginning to appear, with an increase in scrutiny by regulators and investors looking more closely at the attributes of their investments.
The US Securities and Exchange Commission is investigating potentially dubious claims made by Goldman Sachs’ asset-management arm about its ESG funds; earlier this month German police raided the offices of asset manager DWS and its majority owner Deutsche Bank as part of a probe into allegations of greenwashing.
The rise of “greenwashing” is resulting in the introduction and tightening of reporting standards which companies will need to grapple with.
In March, the US Securities and Exchange Commission proposed enhanced disclosure requirements for advisors and funds that market themselves as having an ESG focus. This would require disclosure in reporting including information about climate-related risks that are reasonably likely to have a material impact on their business as well as detail on greenhouse gas emissions.
The European Union is introducing its own Corporate Sustainability Reporting Directive, which comes into effect in 2023. This mandates a broader set of disclosure standards compared to the US proposal that sweeps across the environmental, social and governance domains.
New Zealand’s mandatory climate-related disclosures that will apply to around 200 large publicly listed companies, insurers, banks, non-bank deposit takers and investment managers will commence in 2023 — a formal exposure draft of the complete climate standard is due out later this year.
The rapid rise of tech-heavy ESG funds occurred during the bull market run. With that now over, historically good returns will be tested in the coming year and there are already signs that demand for the asset class is cooling.
Financial services firm Morningstar reports that flows into ESG funds globally have slumped 36 per cent in the first quarter. Bloomberg Intelligence has reported a $2 billion outflow from “do-good” ESG-labelled exchange-traded equity funds by investors in May this year, following three years of inflows.
4. Global talent shortage an ongoing headache
Talent shortages are hitting all industries but are being keenly felt in the capital markets.
To remain competitive throughout the “Great Resignation”, companies need to rethink what they can offer employees to attract and retain them.
With worldwide competition for skills, employees have the upper hand in negotiations for the first time in a long time.
The 2022-23 Hays Salary Guide suggests the top factors driving turnover in the accountancy and finance industry across Australia and New Zealand are uncompetitive salaries, a lack of promotion opportunities, and poor management style or workplace culture.
But employees are also increasingly looking to work for companies they can be proud of.
Businesses have an opportunity to stand out in if they can clearly articulate their purpose and provide meaningful jobs that go beyond commercial outcomes — including ESG principles.
Firms are also under pressure to redefine the workplace and how work is done. Successful firms in the capital markets will balance the desire to attract employees back into the office with the expectation from staff for organisations to offer hybrid or flexible working.
Making this work long-term for teams that have varying wants and needs, while maintaining service delivery and productivity, will be critical.
5. Ongoing disruption of digital technologies
Even before the pandemic, digital technologies were reshaping the capital markets sector.
But the Covid-19 pandemic and subsequent lockdowns suddenly — and permanently — altered how companies provide services and interact with their customers.
There is increasing pressure on banks and finance firms to remain competitive, with fintech companies and big tech moving into what was core banking business.
Apple recently announced its “Apple Pay Later” service as the latest addition to its growing financial services suite.
This will allow its United States customers to take out short-term loans directly with the tech giant, sidelining its traditional banking partners.
To remain competitive, businesses are bolstering their teams with specialised capabilities in technology — including data analytics and cyber-security, artificial intelligence (AI) and cloud — all areas that are considerably impacted by the global talent shortage.
Technology research firm Gartner forecasts that IT spending by banking and financial services firms will grow by 6.1 per cent globally this year as they aim to adopt technologies that will make the lives easier of consumers and businesses.
This disruption may well be good news for New Zealand’s tech export sector.
The Technology Investment Network’s (TIN) Fintech Insights Report highlights that fintech’s five-year compound annual revenue growth rate has reached 32 per cent.
In 2021, revenue for the sector rose 24.4 per cent, with employment also lifting 14.2 per cent.
“The continuing online growth of online commerce, accelerated by the Covid pandemic, will only serve to strengthen the importance of the New Zealand fintech sector as more tech companies and investors seek opportunities,” says TIN’s managing director Greg Shanahan.
In a world of ongoing uncertainty, the sector is expected to be an important contributor to the New Zealand economy in the years ahead.
US Business Summit 2022: MC conference close (video)
PRIZE DRAW & SUMMIT CLOSE
Prize draw courtesy of Air New Zealand
Mat Bolland Chief Corporate Affairs Officer Air New Zealand with Auckland Business Chamber General Manager Events and Marketing Natalie Woodbridge
Conference close Tim McCready
US Business Summit 2022: New Zealand Story’s David Downs with Q&A (video)
KIWI VALUES KEY TO NEW NEW ZEALAND STORY
David Downs CEO New Zealand Story
New Zealand Story Group was established to enhance New Zealand’s reputation beyond natural beauty. In a competitive global economy, reputation matters. And it’s important for a country like ours, with an economy that relies on the strengths of its exports, to continue to grow and diversify.
The more we can do to ensure we’re all telling a broad, compelling and aspirational story about New Zealand, that’s grounded in our values and resonates with the world, the greater chance we have of attracting people to all that we offer.
Moderator: Tim McCready
US Business Summit 2022: MC conference opening (video)
CALL TO ORDER
Tim McCready, MC
Project Auckland: Phil Goff on his greatest regret as mayor of Auckland (NZ Herald)
Project Auckland: Phil Goff on his greatest regret as mayor of Auckland (NZ Herald)
After almost six years as Mayor of Auckland, Phil Goff has decided to end to his 41-year political career and will not seek re-election in October.
After two terms leading the Super City, he points to his achievements: Auckland Council has maintained its credit rating through prudent borrowing, it pays its employees a liveable wage, the Central Interceptor is on track to reduce wastewater overflows into waterways, funding is available for transport infrastructure has nearly doubled, and the Unitary Plan has unlocked future housing growth.
“Environmentally, economically, infrastructure-wise, there have been some big steps forward — notwithstanding the difficulty of the environment in which we’re operating,” Goff says.
But it is the pandemic that has been the most dominant factor in his mayoralty, contributing toward his biggest challenges and regrets.
“My greatest regret would be the impact that Covid has had in delaying or holding up the changes that we were busy making,” he says.
“Suddenly it came along and ripped $900 million out of our revenue — and that’s ongoing.”
Auckland Council has warned of its worsening finances. Earlier this month it released a statement indicating the impact of the pandemic on its revenue is a result of a slower than expected recovery in revenue from public transport, events and facilities, and a slower recovery of dividends from Auckland International Airport.
On the cost side, it said payments to staff and suppliers, finance costs and depreciation expenses are all increasing faster than anticipated.
Considerable savings have been made. Last year, the council found $126 million in cost savings and budgeted a further $90m this year and beyond.
“We have sold surplus assets, and we’re looking at what we might do with carpark buildings and various other buildings that aren’t critical to what we do,” Goff says.
“We are going to have to focus on what our priorities are.”
Further mitigations being considered include the deferral of non-critical capital expenditure projects that are not yet subject to contractual commitments, permanent operating expenditure reductions, and fully utilising the $127m in central government Better Off funding associated with its Three Waters reform to fund operating expenditure, and possible future rates increases.
“It has been bloody tough,” says Goff. “And it has meant we couldn’t fully realise the dreams and ambitions we had.”
“But having said that, when you look at similar councils like Tauranga with the same growth problems as Auckland, we have had stable governance, we have got through our business and had clear majorities for our budgets, and the council has been in safe hands.
“There are those things to celebrate — but the job has been really tough because of the environmental circumstances that we face.”
Not enough progress on homelessness
One of Goff’s cornerstone commitments before becoming mayor was to end Auckland’s chronic homelessness. But it will be obvious to anyone that has visited the city centre over the past year that sufficient progress has not been made. The mayor accepts this. But he says Auckland Council’s instruments are limited.
He says a significant problem is the lack of housing — not enough homes were being built when the city was growing rapidly.
Statehouses were sold off, and the cost of housing in Auckland has risen.
There is movement. Kāinga Ora is creating a pipeline of small, medium and large-scale housing developments in Auckland over the next 10 years and the Auckland Unitary Plan allows for 900,000 dwellings to be built within residential areas.
Goff is a big believer in Housing First, an initiative tasked with ending homelessness that he has supported since 2017.
It provides housing to the homeless, but also wrap-around support that addresses the causes of their homelessness and helps to provide stability.
Goff was instrumental in converting council building facilities during the Covid-19 lockdown to help provide meals for the homeless. “But we need to do more of all of these things,” he says. “Because we’re still we’re still a long way from tackling the problem of rising homelessness.”
Working with different governments
In his time as mayor, Goff has worked with three different Prime Ministers: Sir John Key, Sir Bill English and now Jacinda Ardern.
He says his role as mayor is to work for whoever is in government.
“I don’t care what someone’s political background is, as long as they are there and willing to use their integrity, energy and determination to tackle the problems and not simply play politics with it.”
A former Labour MP for 32 years, Goff said the shift from a National-led government to a Labour-led government had some advantages.
“I can pick up the phone and ring Jacinda, I can ring Grant Robertson, I can talk to Michael Wood,” he says.
“That’s not to say that I can ask for something and they’ll say, ‘of course Phil, we will give it to you,’ but at least I can pick the phone up and talk to them.”
When Goff campaigned in 2016 to get rid of plastic bags, he couldn’t make it work with the supermarkets and didn’t have the power to force them. But he was able to speak with the government, and they brought in enforceable legislation which he says has been a huge benefit environmentally.
“That doesn’t mean there hasn’t been areas where I’ve had strong disagreements with government — Three Waters is one of them,” he says, noting that he understands why the government wants to reform water services but doesn’t support the form that reform has taken.
“I’ve argued consistently and strongly — and although I haven’t won the battle, I have been able to talk on a personal level with an understanding and a mutual respect with ministers that I’ve known for a long period of time.”
The job’s not done yet
With six months left on the clock in his current role, Goff says he is not done yet.
In the wake of the latest Intergovernmental Panel of Climate report, he says it is clear that the time to act for the climate is now.
“We are seeing more frequent and severe weather events, we had our hottest year on record last year, and I wouldn’t be surprised if this year exceeds even that.”
Goff’s council has put money into electric buses, is converting its ferry fleet from diesel to electric, is putting money into cycling and walking, and is planting trees to provide shade and increase Auckland’s canopy cover.
But he says this is the start of the solution, and more needs to be done.
“What worse time to try to find funding to deal with the impact of climate change than when you’re dealing with Covid?
“You’ve lost revenue, and your costs have gone up,” he says. “It is easy to say Covid is the big problem at the moment, and we’ll do climate tomorrow.
“But tomorrow is when our kids grow up. If we don’t act, it’ll be harder and more expensive and economically and environmentally more disastrous.”
Goff has proposed a climate action targeted rate of $1.12 a week for a median-value residential property. This is expected to raise $574m over 10 years and unlock a further $471m through central government co-funding and other sources, ringfenced for direct climate action to cut Auckland’s emissions and respond to extreme heat.
“The council we are handing over will hopefully have funding to tackle the problem of climate change, one of the predominant problems that is confronting our city, our country and the whole planet,” he says.
Councillors will vote on the decision as part of the annual budget in late June.
Goff is, of course, just one vote out of 21.
But he says the council has consulted with people, taken submissions and done polling. “I believe there is public support to make this happen,” he says.
“This is something we are doing for the long term.
“Too often people say the trouble with parliamentarians and councillors only think in three-year terms — and too often we do. This has the chance to act with a longer timeframe in mind.”
Taking Sir John’s advice
It was just after Goff’s first month as mayor that Sir John Key resigned as Prime Minister.
Goff laughs that the way Key departed might have inspired his decision to go.
“He had been in my office a week earlier and I thought, ‘he’s looking remarkably relaxed, what can be causing that?’…
“Maybe he was the role model for me — make sure you stand down while you might still be wanted, rather than waiting to the point where you’re not!”
Reflecting on his time as mayor, Goff says he has been lucky to have had people around the council table that have worked with him on things he has wanted to achieve, and he is grateful for that.
“Because in the end, success is a collective endeavour.
“The mayor might be the person at the top of the heap, but he or she is not the only person there, and it relies on that team.”
To pass his final budget, he will need them on his side.
“It might be the last six months of my mayoralty, but it won’t be the easiest six months of it,” he says.
“I’ll be working out right up to the last moment.”
Project Auckland: Gary Blick on creating foundations for the future (NZ Herald)
Project Auckland: Gary Blick on creating foundations for the future (NZ Herald)
Tim McCready talks to Gary Blick, Auckland Council’s new chief economist about Auckland’s long-term performance and the pandemic’s impact on the city centre.
As Auckland Council’s chief economist, Gary Blick assists Council staff and elected officials to evaluate the economic implications of policy and infrastructure proposals. This means assessing the likely impacts on society’s resources and wellbeing over time – including the financial, social, environmental and cultural aspects.
Originally from Southland, Blick has been in the role since late last year and has lived in Auckland for the past decade. He is particularly interested in the long-term performance and trends of the region and thinks a lot about the wellbeing of Aucklanders now and in the future, and the legacy we will leave them. He says this includes not only those that migrate to the city, but the children and future generations that do not have a voice here yet.
“I often think about the generation I am – what did we inherit? A lot of great things, but then you think about missed opportunities,” he says.
“It is very easy to get caught up with where we are now in terms of the economic cycle and what is happening with housing this month or this quarter, but I am particularly interested in where we have come from, and where we are heading over the long run.”
Getting the foundations right
Blick says for Auckland to be successful in enhancing living standards for residents, including future generations, cities need to get a couple of foundations right.
“For me it is about using our land efficiently and improving accessibility in terms of how we get around,” he says. This means enabling more people to live in locations with good proximity to job opportunities, transport links and amenities. “Many other things matter too, but getting those things right matters a lot because they are the foundations for everything else.”
The Unitary Plan, implemented in 2016, has helped Auckland to take important steps forward with its land use and transport links, including enabling more opportunities to build multi-unit dwellings such as townhouses and apartments.
“All else being equal, having more development opportunities enabled and a more responsive supply of dwellings is supportive of improved affordability over time,” Blick says.
He points to econometric research into construction activity trends that shows, relative to plausible counterfactuals, there was a material boost to supply following the Unitary Plan. He says this likely contributed to the stabilisation of Auckland house prices from 2017 to 2019.
But he acknowledges that events over the past couple of years have complicated the situation, and says it feels like housing affordability took several steps forward with the Unitary Plan, but a step or two back recently with house prices increasing approximately 40 per cent over the past two years.
“The pandemic crisis caused central banks everywhere to head off a drop off in demand and introduce low interest rates to try and stimulate activity and maintain employment. That enabled people to bid a bit more for houses,” says Blick.
“Then with rising case numbers and public health restrictions, we have seen disruptions to supply chains globally, as well as the closing of the borders and a reduction in cross-border labour flows.”
This is problematic because since before the pandemic, Auckland has been losing more residents to elsewhere in New Zealand than it has gained. There were net losses in internal migration in 2019 (11,400 people), 2020 (11,100) and 2021 (13,500), showing that plenty of people judged they would be better off living in other regions and raising a question about Auckland’s overall liveability.
Blick expects the border reopening will see population growth resume as migrants and New Zealanders with needed skills arrive or return to the city, but he cautions that if Auckland isn’t doing as well as it could be then the city may miss out as those with needed skills compare Auckland to other places.
“Liveability and productivity depend on many factors, but it is reasonable to ask whether Auckland can do better on the fundamentals of land use and transport networks,” he says.
Covid-19 hangover in the city centre
The impact of the pandemic has been uneven across businesses.
“The city centre is home to many large professional services and financial services firms that have big office-based workforces with perhaps more flexibility to adapt and adopt remote working,” says Blick.
“Often their customer base is not foot traffic on the street, it is with other businesses and may involve exporting services to elsewhere in New Zealand.”
Even so, GDP – as the measure of the economic output of all businesses in the city centre – decreased by 4.6 per cent for the year to March 2021 – more than the decrease of 2.8 per cent for Auckland as a whole.
But it is the hospitality, retail and events-focused businesses that have borne the brunt of the loss in visitors to the city centre. Heart of the City data last month showed that city centre spending was down more than 40 per cent on the same time last year, and pedestrian counts were almost 50 per cent down.
“Household spending has held up well, but the city centre has lost out as spending has been reoriented to other locations, whether that is online or other centres of Auckland,” says Blick.
While employers and workers have become more comfortable with remote working, he doesn’t expect this to have a permanent devastating impact on the city centre.
“Having that choice may suit some workers and it may mean there are fewer visits on a daily basis from people in the near term relative to before,” he says. “But not all jobs lend themselves to being done remotely on a permanent basis, and people joining the workforce and those starting in new roles may seek in-person collaboration and opportunities to build up their connections.”
The city centre is comparatively very accessible, Blick says, and the concentration of people and businesses in proximity can deliver productivity gains known as agglomeration benefits.
Proximity promotes ease of access, lower transport costs, and knowledge sharing, and a higher population density enhances proximity benefits by supporting deeper labour pools and specialisation among suppliers. As a result, cities can offer higher-paying jobs, as well as more choices in consumption and leisure.
It is this that Blick says will stand Auckland in good stead for the economic recovery post-Covid.
“There’s a good case that the reduction in visits to the city centre will be made back over time, because of its long-run trend growth in density, economic activity and jobs.”
Dynamic Business: Trends that matter in 2022 - NZ Herald
The business climate has been anything but predictable over the past two years.
The Covid-19 pandemic has caused upheaval and seen companies scramble to adapt to a rapidly changing environment — the most visible changes have been the rapid uptake of digital technologies and the rise of remote and hybrid working.
That unpredictability looks set to continue, but there are several underlying trends for businesses to keep in mind as they navigate the year ahead.
A new era of geopolitics
In response to Russia’s invasion of Ukraine, the US and EU have cut selected banks from Swift and closed airspace to Russian planes. Further sanctions have been imposed on Russia’s central bank, aimed at preventing it from accessing reserves.
While the crisis might be on the other side of the world, the economic impact will ripple through the global economy and reach NZ shores.
Russia is the world’s second-largest exporter of crude oil and refined petrol, and the world’s largest exporter of natural gas. Global crude oil prices have already reached their highest levels since 2014, and it is expected that prices will go even higher as the conflict persists. This will impact fuel, supply chains, and the cost of goods in general.
Businesses should also brace for cyberattacks, which many predict Russia will use in response to sanctions. NZ’s National Cyber Security Centre (part of the GCSB) recently released an advisory encouraging nationally significant organisations to consider their security, exercise readiness, and monitor for relevant cyber security developments.
Closer to home, the South China Sea and China’s increasing influence in the Pacific continues to cause fractures in the relationship between China and the United States.
Just prior to the Beijing Winter Olympics in a joint statement, President Xi Jinping and Russian President Vladimir Putin denounced interference from the United States in their affairs and opposed further enlargement of Nato.
While New Zealand has so far managed to carefully navigate its relationship with China, we will face increased pressure as Australia, the United States and the UK make stronger statements about China’s behaviour. At last year’s Apec CEO Summit, President Xi warned Asia-Pacific nations to not “relapse into the confrontation and division of the Cold War-era”.
Prime Minister Jacinda Ardern noted at last year’s China Business Summit that differences between NZ and China were “becoming harder to reconcile” as Beijing’s role in the world grows and changes, and that “managing the relationship is not always going to be easy and there can be no guarantees”.
With geopolitics entering a new era, businesses must walk a geopolitical tightrope and be ready to respond as events occurring elsewhere in the world impact their own operations, relationships, and people.
Increased employee turnover becoming harder to prevent
Since the start of the pandemic, the “Great Resignation” has gained momentum. The pandemic has shifted the mindset of employees, and seen them leave their jobs in search for a better work-life balance, remote work opportunities, increased flexibility or higher pay. In some cases they are moving to organisations that provide a better sense of purpose and meaning, with values that align with their own.
In order to remain competitive and attract and retain workers, companies have to rethink the benefits they offer and clearly articulate their purpose.
This is particularly true for knowledge sectors — those industries significantly reliant on the use of technology and human capital. The tight labour market around the world has seen those workplaces that don’t offer the flexibility and purpose demanded by their employees hindered by increased turnover in a market where good talent is hard to find.
But remote and hybrid has introduced new challenges for business.
The removal of a commute dramatically increases the pool of potential companies for employees. Someone living in Taranaki can now apply for remote working roles in Wellington or Auckland that might have previously been unobtainable to them.
It also limits the social ties that employees make with colleagues.
We have all been to staff farewells where we are told by the departing employee “it is the people here that makes it so hard to leave this job”. These connections that might have once encouraged employees to remain in their job have become weaker and will see the great resignation becoming a sustained challenge for business to grapple with.
Four-day work week gaining momentum
As an alternative to negotiating remuneration with employees and becoming drawn into a bidding war with other workplaces, there has been a rise in companies offering a shorter work week as a bargaining chip.
One example of reduced hours is the four-day work week, which is gaining momentum around the world.
NZ’s Perpetual Guardian trialled a four-day week in 2018 — a world-first for a privately held company.
The eight-week experiment measured productivity, motivation and output, with staff paid the same amount for working fewer hours. It discovered productivity improved 20 per cent, and employees were more creative, committed and less stressed. It has since made the move permanent.
Perpetual Guardian founder Andrew Barnes says the four-day working week is “not just having a day off a week — it’s about delivering productivity, and meeting customer service standards, meeting personal and team business goals and objectives”.
More companies are now beginning to trial shorter work weeks.
A four-day week pilot in the United Kingdom begins in June, with 30 companies signed up so far. The pilot is run by 4 Day Week Global, an organisation that advocates for the shorter week. It says similar programmes are set to start in the US and Ireland, with more planned for Canada, Australia and New Zealand.
Wellness on the way up
Covid-19 has put significant strain on the workforce. Uncertainty around job security, lockdowns, social isolation and limited social contact all contributed to the mental health crisis and exacerbated stress, anxiety and depression for both employers and employees.
The challenge of retaining good employees has seen businesses and business leaders prioritise health and build a culture of wellbeing in the workplace that openly supports mental health.
Many organisations have introduced wellbeing programmes, which include partnerships with mental health providers, subscriptions to mental health apps, fitness classes and additional days off. Last year, Westpac New Zealand introduced five days a year of wellbeing leave, and NZX-listed Vista Group introduced half-day Fridays for all its staff.
Research conducted by the New Zealand Institute of Economic Research last year on behalf of Xero showed investing in employee wellbeing can help to make a business more profitable.
It estimated that for every dollar a small business invests in company-wide wellbeing initiatives for staff, it can expect to see a return of up to 12 times within a year.
The impact of Omicron (and future variants)
Overlaying all these trends, Covid-19 remains present. While the world welcomed the news that the highly transmissible Omicron variant is associated with less severe disease than earlier variants, a pattern of new variants around every six months has emerged.
Since there is a risk of the virus mutating each time it reproduces, the greater transmissibility from Omicron brings with it an even greater chance of new variants emerging.
It was hoped by many that the vaccine rollout would bring an end to the pandemic, but it looks increasingly likely that Covid-19 — in one form or another — is here to stay.
New tools like antivirals, antibody treatments and new vaccines are coming on board this year, which will help us navigate Covid-19 as it becomes an endemic disease.
These will be important as 2022 (hopefully) becomes the year that businesses, employers, employees and government finally reach post-pandemic normality. In a year fraught with challenges of all kinds to navigate, that is something that should bring hope to us all.