Being a good employer takes a collective effort. Being nice, inquiring about the kids and genuinely taking an interest in your employees is good but does not a good employer make. Good employers are a result of what the business model allows them to do, and with the levers in NZ all set around price (including within Government) and with few incentives to make investment pay, then a viable way to compete on price, is to not be a good employer.
A good employer can afford to pay wages that reflect the cost of living so that employees can pay the power bills, live somewhere decent and afford the weekly food bill. A good employer is replenishing the talent in the industry, training people to ensure the industry has the talent it needs to thrive. A good employer is investing in innovation and research and thinking about how to sustain the business and make it secure for those that work there and for themselves, a good employer in investing in new technology to stay efficient and get better by design (including encouraging new design to be developed), a good employer offers jobs that use peoples talents, lets them participate, have a voice, and it provides workers with opportunities to progress. A good employer is sufficiently viable to take time themselves to think about the future of the business, to learn new things and to grow and change.
The New Zealand market is not designed for good employers. In NZ if you were to do these things you would likely lose business. While on the margins some employers could be better than they are (pay more, train more etc), there is no incentive and you will not make as much money short-term as someone that comes along and undercuts you.
Research suggests actually that it is viable to run a higher wage model even when the incentives drive the other way, but generally the quick short-term way to make money in this country is pay the lowest possible wages, pinch staff trained by others or use migration to fill gaps, use labour rather than technology and sell products that are lower value than the potential they afford. It also pays to ensure staff are not unionised because a voice may stuff you if your competitors do not have to put up with that sort of nonsense!
When I started work (in a shoe box in the middle of road…), it was at a Mobil Service Station. The owner was a good employer. He was very nice and made the place like a family. But also, we had an award and wages were very good. All service stations were covered so there was an even playing field. He always had apprentices in the workshop. Those that started out there fixing tyres, often went on to get qualified. The levers including the lack of incentive to compete on the price of labour, encouraged it and the Award covered training rates as well. Trained staff were not pinched by others as most garages had trainees and the wages were determined. Mobil was innovative and bringing in new products and services which the service stations participated in and tried out. The collective group of garages provided sufficient scale for this to be worthwhile. The idea of a service station as a retail outlet for example was being developed at that time. Our Service Station was very popular (we did think of it as ours). Its workshop was always full. It competed using the advantage of loyal trained staff who knew the customers and who the customers trusted. We all stayed around for years! The combination of a good employer and a nice employer worked for them.
I am interested in the sheep farmers response to their current struggle to get good prices for their meat. I don’t really understand the industry but part of the problem I hear is both that the wool price has dropped but also that they are continuing to sell a low value product – the incentive encouraged by the structure of the industry, is to kill and ship, lowering the prices of the product available. There is lots of evidence of the meat processors cutting prices of meat to out do their competitors and the result is NZ lamb is selling under its real value everywhere except ironically in NZ where competition is reduced.
And farmers are not good employers. Many are very nice and ask about the family (some of my best friends are farmers), but they pay low wages and have high turnover of staff. Staff work long hours and lots of it is manual. Only a few years ago farmers voted to end the wool levy that was used for science and innovation in the industry. They don’t invest in the development of new meat products and the few meat works that are doing that are now growing a lot of their own meat. The meat works themselves under invest in technology and use low skilled labour instead – it is cheaper and they are all competing short term as there is little to encourage them to invest. Those that do may lose supply if another works that does not have the capital costs offers a bit more for the meat. There is probably not a farm worker in a union anywhere in NZ and the labour force is back filled with migrant labour. They have an extremely poor safety record and little formal training goes on. Little investment is made in developing a highly skilled innovative long term labour force. Farmers are not good employers – many are nice, but to be good they need to collectively be good.
About 1000 red meat farmers turned up to a meeting in Gore two weeks ago. They want more say in the design of the industry. They want a change so the market is not so volatile, that the buying practices of the processing side are not so unpredictable. They have set up a new group to try and work together to make this very important industry more financially sustainable. A cynical person would be amused to see Fed Farmers representative Connor English discussing a “NZ Dairy Board” type model (single desk) or a Fonterra style business. I think the industry needs more than that. They need a “whole of industry” strategy which includes development of the levers that will see the value of the product improve and the workforce model become sustainable. I am glad they have started the discussions, but to build any community support for any legislative change (which it will need), they will have to have a broader vision than the one Fed Farmers or the Meat Processors are promoting which still lacks commitment to investment.
Many of our industries are suffering from the “tragedy of the commons” approach to business. Countries that have levers that encourage “high road” development have better results all round – socially, politically and economically. NZ hasn’t learned from this and the results range from the leaky homes to Pike River, to dead forestry workers and to meat farmers selling their products short. As someone else said today we have a total population smaller then Sydney but we act like we can’t help each other, we can’t work together, and we can’t care about each other – to work together is anti-competitive – and Stalinist. I saw the film NO today – what we actually need is happiness and happiness requires thinking in a new way!
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