Bay of Plenty Business News November/December 2016

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4 BAY OF PLENTY BUSINESS NEWS November/December 2016 Record off-season sets up bumper summer in Rotorua From page 3 staff to handle the influx of visitors. “We are currently interviewing candidates and plan to take on an extra 15 temporary employees, some of which will retain permanent roles, to ensure that we continue to provide a fantastic customer experience over the busy periods,” says Mr Hemana. “This year we will take on more summer staff than ever before because early signs indicate that this could be a record season for OGO.” Rotorua Canopy Tours managing director James Fitzgerald says his company is looking for an extra 16 staff for the summer season including guides, front office and operational staff. Skyline’s Alison Kirkland says the business is expecting a big summer season. Skyline currently employs 224 people and this number will rise to about 260 until school and university students go back in late February. “We have quite a lot of school and university students on our books. We definitely take on more staff during summer to host large numbers of guests. There are more daylight hours and we have twilight luge rides.” But business being so good Skyline is also recruiting for permanent staff. Right now Skyline have employed an additional HR person and are seeking an electrician, a gondola engineer and a property maintenance manager. Rotorua’s busiest time generally starts in December and goes through to March although events like Crankworx in April which this year drew 10,000 visitors and was worth $8 million to the economy, help extend the season. Capacity issues particularly for accommodation are inevitable during the busiest periods. Mr Walsh says that at Easter there were 25,000 people staying in Rotorua each night. “There are only 15,000 beds. Straight away you can see there’s a deficit at peak times.” Similarly at Labour Weekend the Rotorua iSite was having to send visitors who hadn’t booked ahead for accommodation to Turangi. He says there are plans for more hotels in the city which will obviously help. Michelle Templer says some of Rotorua’s commercial accommodation will Rotorua Canopy Tours is looking for an extra 16 staff for the summer season. reach capacity over peak periods this summer, so holiday makers should consider booking well in advance. “Last year Rotorua iSite staff reported having to refer visitors to peer-to-peer accommodation sites like Air BNB or book rooms in neighbouring regions after all of the rooms in Rotorua had already been allocated. “As visitor numbers continue to increase, so too does the attractiveness around the business case for a new 4.5 to 5 star hotel development in Rotorua,” she says. Rotorua’s record off season is all the more remarkable given the amount of wet weather. Rotorua Visitor Centre and iSite assistant manager Kyle Kydd says the wet weather during the September school holidays did not dampen visitor bookings for Rotorua attractions and activities. “Visitors are realising that regardless of the weather, Rotorua always has something to do,” says Kyle. “Some outdoor activities that were previously thought of as weather dependent are now proving popular regardless of the weather.” Growth in Rotorua’s visitor activity is being driven by both the domestic and international markets, according to Rotorua Lakes Council lead advisor for economic growth, Andrew Wilson. “The Famously Rotorua domestic marketing campaign has helped to raise Rotorua’s profile among domestic visitors, while improved air connectivity into New Zealand continues to open up and reinvigorate Rotorua’s international markets,” says Andrew. Data released by the Ministry of Business, Innovation and Employment (MBIE) illustrates how the direct flights by US airlines have impacted Rotorua, with US visitor expenditure in Rotorua for the month of August 2016 increasing 36 percent (versus a 13 percent increase nationally) during the previous year. Strong positive growth from the North American market was also reported in the APR Consultants Rotorua Attractions & Activities Monitor for the same period There are more businesses coming to town and more jobs being created.” Outgoing Rotorua Chamber of Commerce chief executive Darrin Walsh. A better shoulder season helps smooth cash flow and enables businesses to retain staff.” Destination Rotorua chief executive Michelle Templer. Job growth is across the board.” Talent ID Recruitment director Kellie Hamlett. with visits by North Americans up 2100 visits or 43 percent to 7000 visits.
Dealing with slow payers A common issue that many businesses face especially this time of the year is not getting paid by customers. To a certain extent slow payers can be tolerated, but with Christmas fast approaching, action needs to be taken now. It is a period when surplus cash is traditionally required to cover the costs of what can be an unproductive time for many businesses – yet the bills still need paying such as rent, debt servicing, wages etc. To ensure there is enough in reserves to carry the business through, and to prevent any slow payers continuing to abuse the good nature of business people into the New Year, there are some actions that can be taken. To start with, prevention is always better than cure. So the easiest way to avoid customers using your business as a bank is to ensure you have better systems in place through implementing the following: • Improved credit application procedures so credit is not given to unworthy recipients. • Reduce what is at risk by: - Getting paid up front for part, if not all, of the project or sale. - Improving the progress payment schedule for longer term contracts. - Getting paid in advance for supplies needed from external suppliers. This ensures that the only thing at risk is your time if the customer does not pay. • Ensure you have terms of engagement that clearly establish the cost of the project so this is agreed before the project starts. This document also clearly states payment terms and if interest will be charged on late payments. However, if you do happen to find yourself in the position BAY OF PLENTY BUSINESS NEWS November/December 2016 5 where you are bank for your customers then: • Act sooner rather than later. This may require you initiating contact with the customer in case they take the ‘Ostrich’ approach. There is nothing more frustrating that a customer who does not give you the courtesy of a phone call to keep you abreast of their position. • Define a point at which further action is required and will be taken, i.e. getting a third party involved. Third MONEY MATTERS > BY STEPHEN GRAHAM Stephen Graham is director and managing partner at BDO Rotorua, Chartered Accountants and Advisers. To find out more visit bdorotorua.co.nz or email rotorua@bdo.co.nz party involvement could be as simple as including your accountant or lawyer in an email string or other correspondence to the customer. A letter could be sent from your solicitor and your final option would be debt collection. I certainly understand the challenges and difficulties associated with making this final decision to call in a third party. The overriding fear is of upsetting the customer relationship. However, the reality is that any slow paying customer has already compromised the relationship through not paying for time, effort, goods and/or services they have received, all provided in good faith. This is compounded when the customer has not initiated discussion. Ultimately, businesses are best advised not to let someone else’s cash flow problems become theirs. Indeed, it would be preferable not to get the business in the first place than to actually run at a loss - or worse, cause business collapse. Variable pay: a share of success Some leaders believe that introducing an incentive scheme will enhance company performance but, experience suggests that the solution isn’t so clear-cut. No guarantee As remuneration and reward specialists, we are often asked by organisations to design incentive schemes that will remedy performance issues. We advocate that carefully designed and implemented variable pay schemes can improve workforce productivity. But, it is important to understand that incentive pay alone will not guarantee business success or drive all behavioural change desired. In fact, there are a number of things variable pay does not do. For example, don’t attempt to introduce incentive pay as a measure to shore up structural deficiencies, poor morale or bad client relationships as it is unlikely to address the underlying issues. Rewarding good organisation outcomes Introducing variable pay does not reduce fixed pay or remove an organisation’s systems around increases, rather it gives employees the opportunity to share in the organisation’s success. When exploring incentive schemes our view is that • Incentive pay is about rewarding good organisation outcomes with a financial reward. Except in specialised roles, it is not about motivation. • With a deeply embedded entitlement culture in New Zealand, having a variable component to pay adds a refreshing reality check as to how an organisation works. Good employers, particularly those with good performance management systems, will be most capable of introducing such systems of variable pay and will be most likely to reap the rewards. Talk with us Variable pay, if implemented well, can be a useful tool to reward performance particularly in times of relatively low salary movement. However, if you are considering implementing a scheme it is worth talking with a remuneration specialist as poorly designed schemes can be problematic and will not produce the desired outcomes. Nigel Murphy, based at Waikato Innovation Park in Hamilton, and Cathy Hendry in Tauranga are your local consultants in Strategic Pay’s Northern Region team. They are available to discuss an incentive scheme for your organisation or review your existing scheme to ensure that it is adding value to your organisation. Cathy Hendry Senior consultant Strategic Pay Tauranga + mob 027 498 9812 + cathy@strategicpay.co.nz Nigel Murphy Consultant Strategic Pay Hamilton + mob 027 403 1242 + nigel.murphy@ strategicpay.co.nz www.strategicpay.co.nz CREATE SUCCESS BY REWARDING PERFORMANCE Strategic Pay provides innovative solutions to organisations for their strategic remuneration, performance development and performance improvement needs. We help improve your overall performance by ensuring employee effort, remuneration and rewards are closely aligned with business objectives. Talk to us about: + Remuneration and Reward + Executive remuneration and performance advice (including incentives) + Organisational Structure and Design Contact us for your complimentary remuneration audit 100% LOCAL Strategic Pay Limited Auckland | Hamilton | Wellington | Christchurch | Dunedin | www.strategicpay.co.nz | info@strategicpay.co.nz Helping organisations succeed through the performance of people
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Bay of Plenty Business News November/December 2016

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