As we head towards the end of 2020, a year that has changed the way we live, work and interact with each other, businesses across the globe have found that agility and adaptability has been the key to their survival.
New Zealand’s business landscape has seen many businesses adapt, and even thrive. Such success stories have seen businesses move online, reduce commitments or invest in technology to allow staff to work remotely. On the other hand, others have been much harder hit by the downturn. In industries where overseas labour is heavily relied upon, such as farming, tourism and hospitality, these sectors have suffered.
NEW ZEALAND’S LABOUR MARKET
Business uncertainty due to the impacts of Covid-19 is widespread, both globally and at home. This has led to a very different labour market across the nation, compared to the one that existed a year ago. We are seeing changes to hiring practices with significantly more short term, contract and seasonal work available rather than full-time positions.
According to AWF Madison, one of NZ’s largest temporary staffing providers, recovery in the labour market is most likely to be through the temporary channel, rather than in permanent recruitment. Short-term, secondment and labour hire arrangements are becoming more prevalent for businesses across the country.
OPPORTUNITIES FOR GROWTH FOR SOME INDUSTRIES
Businesses who are unable to securely plan long-term will be looking to scale up for shorter term projects where they can safely see an outcome, particularly in growth industries. While the situation is dire for many small businesses, there are some sectors who are actually seeing growth, particularly freight and logistics and infrastructure. As expected, SMEs supplying goods or services to the FMCG and retail manufacture sectors are also remaining solvent and growing. With growth comes the need for finance options which in the mainstream banking system remains difficult.
In a bid to support economic growth, the New Zealand Government is focused on supporting small businesses as a way of achieving this goal. The Small Business Cashflow (Loan) Scheme aimed at providing financial support to businesses, is available for SMEs to access until December 31, 2023. These measures will provide businesses with a little more certainty in the coming months as well as the ability to plan ahead, potentially by employing more staff or considering opportunities for growth.
CASHFLOW IS KEY WHEN IT COMES TO GROWTH
For the industries that are seeing growth, it’s more important than ever for business owners to stay on top of their cashflow. Sectors such as infrastructure, logistics and supermarket suppliers all have notoriously long payment terms, often 30, 60 and even up to 90 days.
SMEs in these growing sectors need to be able to deal with these delayed payment terms to remain solvent, and look at the range of finance options available to them. Banks offer solutions to boost working capital, however the difficulties for most businesses in obtaining bank finance means that SMEs are looking to other finance alternatives.
Some of the alternatives to traditional bank driven products are invoice financing, cashflow finance, debtor finance, invoice discounting. These facilities allow businesses to selectively sell one or more unpaid invoices to a third party as and when they need earlier access to accounts receivable. This provides fast access to much-needed working capital, unlocking funds that might not otherwise be available to businesses for up to 90 days.
TEMPORARY EMPLOYMENT A NEW OPPORTUNITY FOR SMALL BUSINESSES
Companies will need to be even more agile and market-oriented than ever before to succeed in the times that will follow Covid-19. Businesses will require a fresh approach to temporary recruitment, and how they keep on top of their cashflow.
New Zealand’s labour market was already facing the prospect of significant transformation as a result of automation and trade liberalisation. It is certain that business flexibility and a higher rate of employment, whether that be short or long-term, has the power to boost our economic recovery as we navigate ‘COVID normal’ in the coming months.
For more information about Apricity Finance or to find out how an invoice finance facility could help your business manage cashflow visit here.
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Take control of your cashflow and manage your growth. Our invoice finance specialists will listen to your challenges and check your eligibility so you can access the funds you need to reach your business potential.