Category Archives: Pro Experts

Hawke’s Bay’s leading professional service advisers & leaders

Where are you on the stress curve?

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As the world continues to reopen it looks like we will have some additional challenges and stress to deal with. How do we best manage this and look after our wellbeing?

Stress is often given negative press and we are continuously under pressure to reduce it. I’m going to encourage you to look at it in a different way. Stress is a necessary part of a life. Without it we wouldn’t achieve our personal and business goals, we wouldn’t be motivated to do anything. In short we wouldn’t get much done.

Back in the 1960s Hans Selye developed the general adaptation to stress model and its phases.

Good Health – Homeostasis This is when your body is in balance and isn’t being pushed or changed by the environment…i.e. no stress.

Alarm Stage – Thinking/Readying for the future

This is a state of heightened awareness, often related to increased speed of thinking, higher attention and higher state of arousal generally. However, nothing is happening yet, you are only readying yourself for something to happen. For  example, anticipation before a big meeting or just before you start a race.

Resistance Stage – The doing part of putting stress on your body

This is when you take action, and make your body adjust and cope with the environment. You are in the meeting or race and using fuel, and your body is resisting the stress. For example, doing a workout and pushing through to the end. It was stressful, but your body resisted and got through it. Going without sleep for a week, even though you’re tired, you push through, using stress hormones to stay on point.

Exhaustion Stage – Energy levels have been drained and your body goes into shutdown

This could be at the end of a very long day, or month, or year of work. Your body has had enough, it demands rest and gets it through shutting down and making you feel exhausted. For example, working hard for months leading up to a holiday and you get very sick as soon as the holiday starts.

You can cycle through these levels in one day (mini-cycle), or over a longer period of time of months or years (macro-cycle). Which phase are you in and how long have you been in it?

The key to managing the phases and avoiding the exhaustion stage is quite simple. Plan your recovery.

Maybe we shouldn’t be feeling more stressed trying to reduce our stress. We go to the gym to stress our body and break it down. This is a positive thing. What most of us miss is that we get stronger in recovery and that we need regular recovery for our body to get stronger. If I go and run a marathon this weekend and then try and run another one tomorrow it is very likely that I will be weaker as I haven’t yet recovered. Plan a good period of recovery and it is very likely that my body will become stronger and I will be stronger for my next marathon.

How much recovery have you got in your business week?

Your business week is no different from the gym and marathon example. If you load your week with back to back meetings, presentations and work and spend most of it in the resistance stage at some point you will hit the exhaustion stage and burnout.

This can be easily avoided if you plan in some recovery. Think of the alarm stage as preparing, the resistance stage as taking action and the exhaustion stage as resting. Cycling through the 3 will help us manage stress and improve our wellbeing. What recovery have you planned this week, what would it be, and when was the last time you were in the  preparing phase?

Investing through uncertainty: It’s a matter of time

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Equity markets for the year so far can be described in one word: Volatile

The current situation in markets is being driven by rising interest rates, alongside multi-decade high inflation, clogged supply chains and the war in Ukraine.

Times like these can often spark our ‘fight or flight’ instinct, or alternatively investors might avoid any risk altogether. But both scenarios could potentially harm the likelihood of achieving long term investment goals. It highlights the importance of having an investment plan to guide your decision making.

The length of time you look to hold your investments – the ‘time horizon’ – is important, because the approach you take when investing for the long-term may differ to that over a shorter period. This is all dependent on an investor’s unique risk tolerance, investment goals and needs, which are key for investors to clarify from the outset.

Investment returns

Does time really heal everything?

A longer timeline generally means an investor has greater capacity to take on risk, with the ability to withstand short-term drops in value. This allows a plan to be created for a well-constructed, diversified portfolio, which would usually contain a mix of asset classes (e.g., equities/shares, fixed income/bonds, cash) with different levels of investment risk and return.

When assessing an investment risk profile, there are a few key areas we regularly discuss with clients at Jarden; the amount of investable assets available, any cashflow demands, and their investment time horizon. This period ends when they need to draw down capital from their investment portfolio. It’s also important to think about the level of risk an investor is comfortable taking on, as well as any prior investment experience.

In periods of volatility, seeing a real-time decline in your portfolio’s value can be painful. However, conditions change, and any sudden reactions could result in losing potential future gains. Looking at the US equity market daily returns (excluding dividends) from 1927 to 2021, an investor who stayed in the market for all days would have made a 6.1 per cent capital gain (per annum), while those who missed the 25 best days made only 3.5 per cent.

By staying in the markets for longer periods, there is enough time to see them turn.


Our wealth research team analysed rolling returns from a sample “Balanced” portfolio (60% growth assets and 40% income assets) classified as medium risk from 1992-2020.  It showed over shorter periods of time, the portfolio was exposed to higher risks of negative returns. But over longer periods of time, the portfolio had historically produced positive annual returns on average.

Occasional changes to a portfolio – aligned with investment goals – can be beneficial. However, making decisions in reaction to current events can carry a greater risk of not meeting your aims, and create stress.

The next time an investor thinks about altering their portfolio, they should consider whether today’s situation impacts how their overall investments align with their objectives, or if their goals have changed. Often, it can be best to stay put.

This research has been prepared by Jarden Securities Limited (Jarden) which holds a licence issued by the Financial Markets Authority to provide a financial advice service. The information in this research solely relates to the companies and investment opportunities specified within. The nature and scope of any financial advice included within that research is limited to generic and non-personalised commentary about that investment only, such as the performance and the investment outlook of the company concerned. Any such commentary does not take into account any individual’s particular financial situation, objectives, goals or appetite for risk. We recommend that you seek financial advice that is specific to your personal circumstances before making any investment decision or taking any action. No fees, expenses, or other amounts will be payable for the provision of any financial advice in this research report. However, if you act on any information or advice contained in this research report, a brokerage fee (and other fees such as an administration and custody fee) may be payable to Jarden. For fees payable for brokerage and other services provided by Jarden, information on our complaints and dispute resolution process, and the duties applicable to us for providing financial advice, please see our publicly available disclosure statement at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement

Navigating the fast-moving world of cyber risks

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Commentary on cyber risk seems to be in the news almost every day. With good reason. Many organisations from the Government, through to consulting firms, business associations and insurers are all trying to raise awareness of the risks that SME businesses face.

The simple fact is that cyber risk and threats are developing and changing. It is a fast-moving area that can seem confusing to anyone who does not have a deep understanding of IT. The risk is ever changing, and business responses need to keep up. That is a challenge.

Financial Impact of Cyber Attacks on SMEs in New Zealand

The average financial impact of a cyber-attack on a business is running at $159,000 according to a survey issued by Hewlett Packard and quoted in Scoop toward the end of 2021. Yet less than 5% of New Zealand SMEs have Cyber Insurance.

Insurance

While it is always better to avoid an incident, insurance can play an important role in helping if and when an attack happens. Just like cyber threats, cyber insurance is rapidly changing.

What can be covered?

There is no standard insurance policy. Different providers have different offerings, with differing limits but cover is generally available as follows:

● Incident Response – providing cover for IT forensics, legal, breach notification and
any emergency communication required following an event
● Cybercrime – cyber extortion, ransomware attacks, theft of funds, social engineering
e.g. responding to requests pretending to be your CFO etc
● System Damage/ Business Interruption – data re-creation , income loss, extra
expense, hardware replacement or repair
● Privacy Liability – fines and penalties

Critical Additional Services

When you buy cyber insurance you are not just buying insurance for the costs you incur if there is a loss.

As important, if not more so, are the additional services that the cyber insurers will provide, and these can include:

● Pre Policy Risk Assessment – an external review of your systems and
vulnerabilities, undertaken as part of the underwriting process, to help you
understand your risk and mitigations
● Real Time Threat Assessments – some insurers will provide Apps and tailored
notifications on new threats specific to you and your industry
● 24/7 Cyber Response Services – immediate access to cyber response teams with a
range of disciplines to immediately help prevent and/or recover from attacks/incidents.

These services can prove invaluable. When reviewing any Cyber insurance proposal a review of the additional services and response/ recovery support are as important as the premium offering

Summary

Cyber is now an established risk for all businesses. It poses a very real threat. The cost in time- and money to recover from an incident can be significant for SMEs. Cyber insurance can play an important role in both helping avoid and recover.
If you would like to talk through whether Cyber insurance can help you manage cyber risk please contact me – william.horvath@icib.co.nz 

Have we learned any recruitment lessons yet?

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By Adam Caccioppoli, Associate – Baker Tilly Staples Rodway 

Many businesses seemingly have not changed their approach to recruiting talent, despite the almost constant noise from all industries about how hard it is to find the people their businesses need to grow and succeed.

Are we really going through the same old motions expecting a different result? Here are four things businesses could and should think about when it comes to talent, if they aren’t already:

Posting an advert is not enough in this job market, especially for in-demand skillsets.

According to data from Seek NZ, the average time to hire is now 50 days. That’s a long time! Sometimes the best candidates are passive – interested in their next great opportunity, but too busy achieving good things in their current role to be looking on job boards all the time. Businesses that are quickly managing to secure the best talent have proactive sourcing strategies to access and engage with the people they need, utilising a mix of approaches.

These include investment in dedicated internal recruitment resources, utilising recruitment tools such as LinkedIn Recruiter and recruitment agencies, and hiring people who fit their culture and values, then providing them with technical skill gap training where needed.

Your leaders are your secret weapon to accessing the best talent.

If you have amazing leaders in your business, great! People don’t quit a job, the saying goes – they quit a manager. The same lesson can be applied to attracting talent – more people choose a manager than the company. If you have great leaders in your business, they need to be front and centre in the recruitment process working alongside internal and external recruitment partners to come up with innovative ways to engage with the intended target audience.

Think long term – build sustainable talent pipelines.

It’s easy, especially in a talent-short market, to get caught up in spending your time, energy and resources to fill the vacancy you have right now and neglecting to think about future hiring. Wouldn’t it be great if the next time you recruit for a similar position you are not starting from scratch? Organisations that are winning the war on talent have strategies to build their employee value proposition (EVP) with their target audiences. Whether this is through regular networking (online or in person) with key industry groups and meet-ups or building talent pools using recruitment tools and partnerships with specialist recruitment agencies, the key is to do this on an ongoing basis so that you have warm leads to contact when you next have a vacancy.

Embrace a data-driven approach to drive better return on investment (ROI).

Businesses collect and analyse data, often to extreme levels of detail, to help inform decision making about which customers to target or what price a product should be, yet when it comes to recruitment it seems most organisations have little if any data. You should constantly measure key questions around your recruitment strategy.

Which channels have produced the most suitable applicants and ultimately the most successful employees?

Which channels are bringing the most engagement from good talent? What is your time to hire? Recruitment costs have doubled across New Zealand over the past year. How much have you spent on recruitment agencies in the past 12 months?

Having a system in place, whether it is a simple spreadsheet or a more sophisticated Applicant Tracking System (ATS) to collect accurate data that highlights how your business is going about recruitment, can be an important first step to identifying what your key

talent problems are and improving your ROI at the same time. For any talent acquisition support or strategizing about your approach to getting the best talent for your organisation or business, Adam can be contacted at adam.caccioppoli@bakertillysr.nz

Where is your business heading? and what can you do to help get it there?

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While being the best in one’s industry is a lofty business goal, in today’s climate it is crucial to set realistic, attainable goals rather than being caught up in the idealistic.

As businesses continue to grapple with the fallout of Covid-19 and government mandates, businesses are left with less operating flexibility and certainty. It is therefore paramount that business owners know their business: where is it now; where is it heading; and what you as an owner can do to get it there.

As we continue to see the consequences of the traffic light system, and the rolling lock downs, I have seen first hand from my recent time in London that traditional business planning is not sufficient, and those who merely roll forward their plans from the previous year will quickly be left behind.

Taking Stock

Taking stock of where your business is truly at (and no, we don’t mean counting everything on your shelves!) is a vital step of the goal setting process. Before you can plan for what comes next, you need to know where you are starting from NOW; not where you’ll be after the summer season, or how you were tracking prior to Christmas. Goal setting is future focused, and given the current climate, comes with a lot of uncertainty.

The process needs to incorporate a fine balance of ambition and challenge, but also be realistic and attainable. This can only be achieved by having factual, accurate and timely information. Check out our take on the Traffic Light system below to see where your business may fit.

RED – “With the lockdowns and operating restrictions my business has been severely impacted and any cash reservesI held have been depleted.”

If your business fits into the above, you may be looking to set goals around business wind up, reviewing your operating model or succession opportunities/options. For any business in this situation, it is crucial that you have accurate and timely information, and that you start having conversations with key relationships now. Bringing in your banker, business advisor and investors provides a fresh take on what is often a very tense situation and can ensure that all bases are covered, all options are explored and that you have a team around you to support you through this transition phase.

ORANGE – “Covid has been tough on my industry; profit margins and cashflow has been squeezed, but with clever, timely planning we’ve done ok and survived the worst of it.”

Those in the Orange section may need to take a more conservative approach to their goal setting. Funds may be lean for investment opportunities therefore ensuring that key revenue streams are strong and protected are essential for future growth. For example, you may be faced with the likelihood that a large percentage of your business is now conducted online as opposed to over the counter. Ensuring that your website and infrastructure can handle the increase in volume, is an investment decision that is worth evaluating.

GREEN – “Covid, what Covid?” Some businesses have been fortunate to thrive during these tumultuous times, by either finding themselves in the right business at the right time; or by pivoting their resources to capitalise on opportunities (check out our earlier article on the Business Pivot!).

Businesses who have been fortunate to experience this level of growth often find themselves playing catch up rather than setting strategic goals for the future. Take the time to think about what’s next for your business, and what steps you need to take to get there.

Keep in Mind

Regardless of where your business may fit above, when setting business goals, it is important that you are able to answer the following: What is your point of difference to your competitors? What future barriers will your business face?

And what infrastructure can you invest in to minimise the impact of these? Once you have an accurate picture of where your business is currently, you can set strategic, realistic, achievable goals. Keep in mind that COVID-19 is unlikely to be going anywhere anytime soon, so flexible goals that are regularly reviewed are key. Witnessing first-hand the constant lockdown waves in the UK, it was evident the businesses that understood the key metrics of their business and those that were constantly reviewing their plans. These businesses were able to control the direction of their business and capitalise on opportunities as they arose.

The one silver lining with Omicron is that the health impacts are potentially less severe than other COVID-19 strains, and we can draw on the experiences of other countries that have already gone through their peaks to see how we can minimise the impact on our business here. One thing that is already evident, is that those businesses that have proactively responded have fared the most favourably.

What’s up with Town Planning for Housing Supply in Hawke’s Bay

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To be blunt, like the rest of New Zealand Hawke’s Bay is flat out. Demands on planning and land development are high, with long lead in times for consultant support, and even higher demands on Council consenting, fuelled by low interest rates, high housing demand (social housing, and new housing – greenfield and infill and reinvestment in existing homes), along with new industry and commercial activities establishing in or relocating to our region.

It seems crazy that this demand is so great considering supply chain issues and increasing costs across all aspects of the development process, with other professional services such as engineering, surveying, and architectural providers also at capacity. For housing this high-level of demand has been confirmed by the jointly prepared ‘Housing Development Capacity Assessment 2021’, by Napier City Council, Hastings District Council and the Hawkes Bay Regional Council, as required under the National Policy Statement on Urban Development (NPSUD). This is the same legislation that has recently removed rules requiring onsite car parking, and has enabled fast-tracking of three or more houses on a site – but not in Hawke’s Bay. The capacity assessment quantifies housing demand and supply capacity under short, medium, and long term scenarios (long term being 2050).

The capacity assessment suggests the current planning provisions allow capacity for an extra 5450 new dwellings in Hastings and 14,000 in Napier by 2050 – concluding that Hastings can meet short term housing demand, whilst Napier is ok through to 2050. That is assuming adequate infrastructure, such as roading, water supply, stormwater and wastewater is provided, however delivering these services is also confronted by technical capacity and supply chain issues. These projected supply figures look good on paper and the efficiency benefits of intensification are recognised across the planning industry. The reality is however that intensification alone will not resolve the current housing supply shortfall. The elephant in the room however is the current housing backlog, which is not quantified in the study. Whilst future projections look positive, what about the now? – especially given that the Bay is already well behind the 8-ball.

The effects of this backlog are reflected in Hawke’s Bay residential rental increases of 14% in the last year, the highest regional annual rent increase in the country (as reported by NZME). Alongside this is the delivery of infrastructure and wider infrastructure upgrades to accommodate new development. We can obtain approvals for new development, but these sit there awaiting the installation of infrastructure. In my view, what is needed is the effective use of the fast-track planning processes available under the Resource Management Act. We need to promote re-zoning and/or consenting for development on the multiple small pockets of land already identified as suitable for ‘future urban’ development, but we need to do it now. Many of these areas, on the perimeter of our existing urban areas, can be readily serviced and accessed and do not warrant the same Structure Planning rigour needed for large greenfield development.

As I write this a new headline appeared from Westpac economists ‘the housing market boom is over’, – due to high inflation and tighter monetary control. What this means to me is that the ability and drive of the market to address Hawke’s Bay’s housing backlog will become constrained, and without taking bold action to increase supply, we will not have the ability to house those that are most in need, and realising the ‘enabled capacity’ that has been projected may well prove to be an unachievable goal.

Productivity – not always the Holy Grail

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The last couple of years have changed our lives on all fronts, at work and at home in sometimes unimaginable ways. It has changed the way we approach our work and personal lives, and has opened up opportunities for some. Some fortunate workers now have flexibility to balance their home and work lives in ways not previously possible. Positives have included the saving of commuting time which can now be re-focused into other work areas. However there are some not so wonderful outcomes for our workforce, including the lack of social interaction at work, feeling isolated, and for some the pressure to increase productivity when on a personal level, we have perhaps discovered the joys of staying at home a bit more, developed new hobbies, learned new languages, or even engaging our entrepreneurial streak starting new businesses.

Underlying all of this is the danger of our ongoing quest to “keep busy”, and to “do more”. Many of us end up feeling stressed at not being able to do things the way we used to, and feel the need to fill our time with “value-adding activity”. We risk creating an environment for burnout in our workplaces which could flow through to our personal lives. The demarcation point between our business and personal lives has become increasingly muddy.

How can we create a balance between healthy productivity and personal well- being?

Why are we under so much pressure to be “Busy”?

The introduction of technology over the last few decades has changed the pace of business. What used to be a typed memo, written by the sender, typed by the typist, signed then sent via snail mail, can be now be rattled off in an email in a minute, with the response possibly coming a minute later.

We have access to information at the click of a mouse button, whereas we used to have to troll through endless tomes at the library. On a daily basis we are bombarded with articles about business celebrities such as Elon Musk having a norm of 80 to 90 hours as a normal working week. Podcasts, social media posts extol the virtues of maximizing our productive time, with endless tools and “how to’s” to help us get there. Who hasn’t questioned their own self esteem when we see the over achievers on social media running marathons, climbing mountains and having wholesome holidays with their families? We have become experts in “multi-tasking” – using driving time to make phone calls, listening to podcasts while exercising, watching educational tutorials on our laptops on a so-called work break.

If we can’t meet these unrealistic expectations of ourselves to be productive, how are we increasing our risk of burnout in the office, but also, sadly in our personal lives?

Productivity is not the only measure of success

Productivity of itself is not a bad thing, but if not handled carefully, can result in some negative outcomes and risks to our health. Used wisely, productivity allows us to produce more work in a less amount of time, providing opportunities to engage in some other value adding activities. This is a good thing. But if we start applying this business logic to our personal lives, do we always need to be more productive in our personal lives and supposed down time?

The big question we need to ask ourselves is “why do we want to be more productive”. Different situations can require different outcomes. Sometimes it is not what we need to achieve; it is how we go about achieving it.

Boredom is not a bad word

Newsflash – it is ok to do nothing sometimes. Boredom can trigger our brains to imagine and be creative by considering the unfamiliar and to explore where we may not have been before.

Handling boredom is an important skill, as it helps us to re-focus and self regulate. When we are now so used to instant gratification and everything happening so quickly, it is a good lesson to take a moment, develop better self-control, and regulate our speech, actions and emotions. Ever heard of “sleeping on a problem”?

Finally

Productivity is an important quality to encourage in both our business and personal lives, but they must have a clear goal in mind. Putting stress on ourselves to be constantly productive is not a healthy or sustainable practice. Making sure we allow ourselves time to “take a moment” and recuperate is essential in our crazy world. Look after yourselves.

Making Security awareness a habit

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Looking forward to 2022, we can expect another period of dealing with the invisible and deadly COVID-19 virus. Three years in, it has changed how we live, work and interact with others nationally and globally. We have trained ourselves to keep to our one-metre distance in public places, wash our hands thoroughly, and use sanitisers.

We wear masks and use technology to track our activity in case of possible exposure and communicate sites of interest, more recently, as a vaccine pass. It’s true to say that these measures have worked, and it is also true that we will have these methods at the ready once we get past this season of the disease and see another pandemic coming our way. But, as much as it has disrupted our personal lives, it has also affected our businesses. It has upset inbound and outbound global supply chains, put burdens on hospitality, increased remote working from home (turning our homes and lives on end), and meant meeting online at all hours of the day and night, not to mention reading and responding to more emails than we would like to.

And that has also seen us come across an increase in other invisible, deadly killers to business- forms of malware, delivered primarily via email phishing to unsuspecting individuals or vulnerabilities to weak and underperforming technologies. So for every notable reported attack (the NZX in 2020 and the Waikato DHB in 2021, for example), there are an untold number of those that go unrecognized and unreported.

All of the cybersecurity predictions for 2022 and beyond are pretty much alike- expect more, expect worse, and expect harsher damages from attacks. We will see an increase in ransomware and attacks against mobile and IoT devices, a rise in frequency, and sophisticated methods of avoiding detection.

What can you do?

An Information Security Management System (ISMS) is not just an assortment of technology; it is the collective series of methods that a company employs to achieve their cybersecurity goals. Most companies have some form of implementation (or parts thereof) but different requirements and ways to achieve them, typically letting them down. Here are four common suggestions and steps for every business in 2022:

  1. Conduct a Cybersecurity Assessment

I hear a lot of, “We don’t know what we don’t know,” and that is precisely what hackers exploit. An audit performed by an independent cybersecurity professional outside of your organisation or service provider will ensure an evidence-based, impartial review, define gaps, and make appropriate recommendations and is well worth the cost. You wouldn’t let your accounting department do your financial audit, and you should look outside for your cybersecurity review.

  1. Understand and incorporate good governance

The NZ Privacy Commissioner revised the Privacy Act of 2020. It has new rules and penalties around digital information and for failure to recognise and protect the privacy of your stakeholders.

They have a free short 30-minute e-Learning course that will help you and your employees get to know the regulation. Combined with appropriate policies and procedures, they set the tone that management takes the security of the business seriously, thereby protecting the needs of all employees, suppliers, and customers.

  1. Apply 3 pillars for protection

There are three foundational pillars to cyber protection that every business and individual should take to defend themselves against harmful threats; training (securing people), email filtering (securing communications), and deploying next-generation Antivirus (securing technology). These three methods are similar to the preventive measures we apply to COVID-19. Individually, they won’t prevent an attack, but together, they help reduce the risk and damage from one.

  1. Stay aware.

CERTNZ, SecurityBrief NZ, and other security bulletin websites can provide knowledgeable, timely information about what is happening in New Zealand. Just ten minutes a day is all it takes to stay ahead of the game.

Unlike COVID, threats from cybersecurity attacks will never go away, and like COVID, everyone is a target. So vigilance and resilience are our number one defence, and the approach to taking it seriously now and every day is the only way to guarantee your cybersecurity looking forward.

The Employee Experience – Now is the time

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A tight labour market, closed borders and now The Great Resignation (a term used to describe an unexpected side effect of the pandemic, where people are rethinking how to live their lives and what type of meaning and purpose they want out of work and life), the task of finding and keeping talent needed to operate in business right now is an overwhelming challenge.

Many employers either don’t know how to tackle the situation or have been distracted by other challenges the pandemic has posed, but now more than ever, employers have a unique opportunity to think more strategically about their people and attract and retain the talent they need to create a thriving postpandemic organisation.

Leadership with a Difference

To lead well during these times is not easy and requires some real thought to get it right. It requires re-imagining how you – the employer, lead and develop others, how you create strong teams, how you communicate and how you develop a positive workplace culture.

Employees are tired and they are looking for a revised sense of meaning and purpose and this requires great leadership. Be conscious about setting in place a vision of what you are trying to achieve and align everyday work to the vision and purpose. All work can be meaningful. Reframe tasks to connect to the larger purpose (remember the NASA janitor who, when asked, “what do you do?” answered “helping put a man on the moon”). Does it mean your people need a ‘calling’? No. But you can establish meaning by setting the vision, telling your story, and making the connection for them. Know what you stand for as an organisation (your values) and double down on culture.

What’s your EVP? Know your Employee Value Proposition.

Genuinely ask the question “Why would I work for your company instead of elsewhere?”. Understand what your employees are running from and what they gravitate to. Gain information from them – ask them – and utilise information sources such as exit interviews (best done by an independent party). There can be a lot of things at play here – remuneration yes, but also meaning, impact, job content, development opportunities, culture, team and life balance.

Employee Experience

Take time to consider the key touchpoints in your employees’ ‘lifecycle’ – these are the human aspects of work that can make a big difference and includes people processes such as:

  • Hiring
  • Onboarding
  • Development
  • Reward and recognition
  • Exit

Look at the social and interpersonal connections both spontaneous and formal to develop a sense of community. Review communication effectiveness and set in place meaningful interactions, not just transactions. Meetings are a classic connection point – when done correctly they pose an opportunity; know their purpose and do them well. Take a conscious look at how you engage your people, how can you enhance wellbeing and build a sense of team and create a strong organisational culture?

Time and again, engagement surveys show that staff development is a priority, so put in place development plans and mentoring programmes.

A Flexible Working Model

From an attraction and retention perspective, flexibility is a key selling point. Redesigning your work model is better than watching your investment walk out the door. Employees are looking for greater flexibility. A willingness to accept employees’ commitments and ensure they feel supported in doing what is important in their lives, will help employees feel strongly about their commitment to the organisation. A hybrid work model should be a serious consideration. However, do not underestimate the amount of structure needed for this to work well.

For those who’ve tried this without the right structures in place, it has been a disaster. It needs careful planning and design, an understanding of people’s personal situations and a balance of care that is offset with communicating personal responsibility and productivity along with a focus on outcomes rather than actions. It may also need a re-education of more traditional managers – a remote employee is not automatically less engaged or less communicative – don’t mistake physical presence for loyalty. It also needs the right digital communication platform to act as a main channel where information and conversation is captured for both remote and onsite workers.

My overarching point here is to keep your eye on the ball. Take some time and be strategic and about how things are done and change it up. As Thomas Jefferson once said, “If you want something you’ve never had, you must be willing to do something you’ve never done.”

Understand legislation changes to land before acting

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A hot topic for many years has been the house market. Specifically, how the Government has attempted to create affordable housing for those priced out of the market. The most recent of these is the National Policy Statement on Urban Development 2020 and the proposed repeal and replacement of the Resource Management Act. Hastings and Napier District Councils will be required to review their existing District Plans to determine where and how they can support future housing growth within their regions. Potential changes may provide you with various options for the development of your land which may have been unavailable to you previously. But before rushing out to take advantage of the current market, there are a few matters for you to consider first.

Tax – that old chestnut

There are several possible tax implications when it comes to developing property. The most important consideration is the intent at the time of purchase. Any profits gained from the sale of land that was purchased with the intention to develop and sell will be taxable. Inland Revenue has wide ranging powers to determine the original intent and purpose.

Where a property is bought and sold within 10 years, the development will be subject to tax when the work undertaken is considered ‘more than minor’. Various factors including the time, effort and expense that has occurred in undertaking the development will be considered.

Where property is owned for more than 10 years and then developed, any development will be taxed where there have been significant costs incurred for earthworks, drainage and connection of utilities like power, water and telecommunications.

There is also provision applying to the sale of property within 10 years where the property has been rezoned pursuant to the Resource Management Act. Then there is the overriding bright-line test. This provides for any residential or lifestyle property sold within 10 years to be taxed upon sale, regardless of the original intention when purchased. For properties purchased prior to 27 March 2021, the timeframe is five years.

Land Covenants and how they affect your plans

Land Covenants are agreements that outline resections on how land can be used or developed, the objective being to maintain the quality of a subdivision and the value of the properties within it. Land Covenants are recorded on the Record of Title and pass onto all future landowners. Examples include restrictions on the design of the house, materials that may be used and ongoing maintenance requirements.

One covenant that needs careful review is any clause that may prevent further subdivision. No further subdivision clauses can come in two types – there is the express ‘no further subdivision’ clause and then there are limitations on the number of buildings that may be erected within a defined area.

Land Covenants are private agreements which, provided they do not contravene any local council bylaws, will trump any Council zone definitions for minimum lot size. Councils are

not required to consider any existing private Land Covenants noted on a Record of Title when reviewing any subdivision applications. There have been instances where Councils have issued a Resource Consent allowing a subdivision to proceed, but the owner of the land has been unable to legally subdivide the property due to a no further subdivision clause contained in existing Land Covenants.

Removal of redundant easements

During the planning stage, the removal of redundant easements can have a significant effect in lessening costs and reducing timeframes.

An easement is a right from one landowner to another to use a specified area of land in a specified way. These are generally in the form of rights of way, rights to convey water, electricity, telecommunications, and rights to drain water or sewage.

When a new title is issued, all existing interests on the old title ‘drop down’ onto all new titles. The effect that this sometimes has is that easements are registered over land that has no direct access to the easement area or the right to use the same. This can create issues when it comes to selling the new titles. The most cost and time efficient solution is to ensure all easements are only brought down or registered over the relevant land to be affected. This may require some easements to be fully or partially surrendered as part of the subdivision process.

In other cases, your existing title may already have redundant easements from an earlier subdivision that should really be removed to ‘tidy up’ the title first. Some of the points outlined above may appear complicated and confusing. We are here to help you with all of this and reduce any concerns you may have to ensure you get the most out of your investments and development. Give me a call and I’ll be happy to discuss.