InTouch : Firms Looking at Shrinking Hours and Sinking Lids

Employment lawyers are fielding growing number of inquiries from businesses looking to restructure their operations in anticipation of drop in business activity.
Buddle Findlay partner Hamish Kynaston says rising raw material, transport, and financing costs, combined with thinner order books, are forcing businesses to consider options such as staff cuts, overtime bans, and shorter working weeks.
“In many cases, businesses are choosing not to replace staff that leave and are taking closer look at activities that don’t immediately benefit their bottom line.”
He says attendance at Buddle Findlay seminars around the country for businesses thinking of restructuring has been higher than in previous years, and that upward of half those attending said their business was either currently restructuring or planning to do so.
While manufacturing and finance companies are prominent among those expecting tougher economic times, Kynaston says the firm is working with clients from number of sectors.
“Increasingly, we are dealing with businesses looking to make short-term, rather than strategic, changes.”
Kynaston says these pressures are mirrored in other areas of Buddle Findlay’s practice, with an increase in insolvency and debt-recovery-related work, as well as in the findings of recent surveys carried out by NZIER and the Employers and Manufacturers Association.
He says businesses planning to make changes need to be sure they follow proper process, but should not let that delay them putting their plans into action.
Businesses need to consider more than just their legal obligations when managing structural change.
“Good processes involve more than just adhering to the letter of the law,” he says.
“This type of change affects not only the people directly involved, those who are going to lose their jobs or have their working arrangements significantly altered, but also their friends and colleagues. It’s an unsettling time for all concerned.
“How business handles the change process can either enhance or damage their reputation internally and in the community.”