90-day trial creates jobs

16 Oct 2015

Compliance making employment more difficult

The 90-day work trial appears to be creating more employment opportunities in the SME sector, according to the latest nationwide MYOB Business Monitor survey of business owners and operators from around the country.

Almost two thirds (63%) of small businesses (6-19 employees) and 16 per cent of micro businesses (1-5 employees) have employed a new staff member on a 90-day trial in the last year. Meanwhile, just 13 per cent of small businesses and 5 per cent of micro businesses have dismissed a staff member within their trial period over the 12 months to August 2015.

MYOB New Zealand General Manager, James Scollay says that, while it may attract opposition, the 90-day trial legislation is extremely popular among local SME operators.

“Local businesses see it as the opportunity to minimise some of the risks of employment, enabling them to create jobs that otherwise wouldn't exist, while ensuring they have the right fit for their organisation,” says James Scollay.

“As a way of stimulating employment opportunities in the sector, it appears to be effective, with a far greater percentage of SMEs taking on new staff with a trial period, than those who have used the provisions to dismiss an employee.”

Employment growth in the sector will be significant this year, with 9 per cent of SME operators planning to take on more full-time staff and 11 per cent expecting to employ more part timers. Twenty per cent of all SME operators are also intending to lift pay rates in the next 12 months.

Although the 90-day trial provisions are being widely used, not all legislation is as popular with employers, says Mr Scollay.

“After the ability to actually find staff, compliance concerns are the biggest pain points for employers.”

According to the survey, the top three employment-related pain points for businesses are:

  • The ability to find new staff – 32 per cent
  • Understanding health and safety compliance – 30 per cent
  • Dealing with payroll compliance – 29 per cent

Seventy five per cent of the 1000-plus business operators surveyed would like to see ACC levies reduced, 64 per cent would support the simplification of PAYE rules, and 59 per cent would like to see SMEs exempted from a requirement to have a health and safety committee.

“Alongside dealing with ACC costs, which the Government has promised will be addressed in the next year, these are the key areas of employment legislation SME operators would like to see addressed,” says Mr Scollay.

“One of the things we are once again seeing in this latest MYOB Business Monitor, however, is the strong sense of fairness small business employers have for the staff they work closely with.”

“Just fifteen per cent of respondents said they would be in favour of introducing the use of so-called ‘zero-hours’ contracts into employment legislation. And although it is popular, most don’t want to see any extension in the trial period for new staff.”

An initiative to extend the trial period to 120 days gained just 23 per cent support.

Mr Scollay says MYOB estimates over 30% of the New Zealand workforce is paid using MYOB software and the company is investing to provide easy online payroll solutions for all employers – whether they have just one employee or employ over 500 staff.

“We are focused on creating an environment which makes it easier for employers to understand and manage their obligations and lowers the barriers to employment.

“The SME sector offers a strong opportunity for employment growth in New Zealand, provided employers aren’t tied up in too much red tape.”

MYOB is co-hosting an SME employment discussion panel, Mind your own employees – Making it easier for New Zealand SMEs, with the Wellington Chamber of Commerce on Friday 16 October at Mac’s Function Centre in Wellington. Taking part in the event are SME Business Network Founder Tenby Powell, Wellington Chamber of Commerce CEO John Milford, Food and Grocery Council CEO Katherine Rich, Hospitality NZ CEO Bruce Robertson, Head of business.govt.nz Matthew Kennedy-Good and MYOB SME Solutions General Manager James Scollay.

For MYOB product information, research results, business tips, discussions, client service and more visit the MYOB website, The Pulse BlogLinkedInTwitterFacebook,Instagram and YouTube.


For further comment or other information please contact:

Sarah Putt, MYOB NZ Public Affairs Manager

P: 09 925 3515 / M: 029 777 0256/ E: sarah.putt@myob.com

Gerard Blank, The Agency Communications Limited Director

P: 03 341 5841 / M: 0275 243 629 / E: gerard@theagencynz.co.nz

About MYOB

MYOB (ASX: MYO) is a leading cloud based business management solutions provider. It makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and in 2015 was awarded the BRW award for the most innovative large company for 500+ employees and placed 2nd in BRW’s Most Innovative Companies Award list across all categories nationally.  For more information, visit myob.co.nz or follow @MYOB on Twitter.

About the MYOB Business Monitor

The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran in July/August 2015. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.