Mediation for employment issues, you may have heard of it, but what is mediation in the context of employment? What can it be used for and what does the process look like?  Many people believe that mediation is only for when an employee brings a grievance against their employer, and while this is a common use for mediation, there are many other ways that mediation can be a useful tool for both employer and employee for a range of issues in the employment relationship.

What is Mediation?

Mediation is a service for employers and employees which is run through Employment New Zealand who operate under MBIE; the Ministry of Business, Innovation and Employment. It is free and confidential, and generally a quick process to engage in, with some mediations lasting only a couple of hours before being resolved, which means less stress and lost productivity for all parties involved.  Mediation is a fantastic first step in resolving employment issues without having to go to the ERA (Employment Relations Authority) which is more costly, largely due to legal fees, more time consuming and usually more stressful.

Mediation is a collaborative approach; finding an outcome that both parties are happy with and avoids the win-lose approach that court can have.  Mediation is voluntary however mediation is your friend and if matters can be resolved in mediation then this is the best outcome for all involved as whatever settlement is reached remains confidential, keeping both employer and employee reputation intact.

When can I use Mediation?

Mediation can be used after employment ends and for employment problems while the employee is still working for the employer.  Issues such as bullying and harassment claims, issues between teams, collective bargaining with unions, strikes, lockouts and of course personal grievances like unjustified disadvantage or unjustified dismissal.

I Want to go to Mediation but What is the Process?

You have an employment problem that is not being resolved by speaking to the other party involved.  You’re starting to get a bit frustrated and have decided that mediation could help resolve the issue. So what do you do?

Mediation applications are found online. There is a Mediation Pre-application form above the Request Mediation button and this is a useful tool to use before you Request Mediation.  It gets you thinking of the issues and what supporting documentation you should attach.  Giving the mediator lots of information while sticking to the facts will give them a good sense of what the issue is about.

How do I apply for mediation online?

  1. Go to Employment.govt.nz and click on Resolving Problems, then Steps to Resolve, Mediation and Request Mediation
  2. Both parties are then contacted by Employment Mediation Services Staff and a suitable time and place for mediation to take place is arranged. (During Alert Levels 2, 3 and 4 COVID-19 Restrictions, all mediation will be done via phone or zoom video calls).
  3. Once it is convened (whether at a physical venue or via phone or zoom), the Mediator will speak to each party separately before group discussions take place.
  4. Discussion and negotiations take place.
  5. Settlement is reached, and a section 149 Record of Settlement will record the settlement details with both parties signing it and the mediator will sign this off, ensuring the settlement is full, final and confidential. The matter is now settled, usually within hours of entering Mediation.
  6. If settlement cannot be reached at mediation, you can either choose to adjourn the process and come back to mediation after a period of time, you can keep negotiating after Mediation and perhaps leave an offer on the table for a set time (seven days perhaps for thinking time) or the matter can be taken further to the Employment Relations Authority.

The Dos and Don’ts of Mediation

DO:

  • Stick to the facts. Try to keep emotions out of it even though emotions can be running high.
  • Remain calm, focused, and open minded.
  • Be collaborative and conciliatory. You should have the problem-solving mindset of working together to find a satisfactory outcome of both parties.
  • Put yourself in the other parties’ position to help give you perspective.
  • Focus on the issues, not the person. Try to keep personality out of it, stick to the issues involved not the person involved.
  • Listen for understanding. This will help you identify the other parties ’underlying need and concern.  If you can understand for example that what they really want is an apology as opposed to money, then negotiations may reach settlement quicker with this in mind.  Alternatively, perhaps they just need enough money from the mediation process to pay their rent while they look for another job and will accept the termination of their employment if the figure will satisfy their rent requirements to reach settlement.

DON’T:

  • Be aggressive and have an opponent mentality.
  • Make personal attacks or use accusatory language, such as “you always singled me out in front of others” or “you are the worst manager I have ever had.”
  • Act like you are in a courtroom. The other party is not on trial.
  • Refuse to compromise. If the matter escalates to the Employment Relations Authority you may end up worse off than if you had of compromised and reached a mutually agreeable settlement at Mediation.
  • Get caught up on small details, look at the big picture instead. There are worse alternatives to a negotiated agreement such as lost time and productivity, huge legal fees, and loss of confidentiality if it escalates to the ERA and this can be damaging to the reputation of both employer and employee.

Other Points to Note About Mediation

Yes, you can have a legal representative with you, or an employee advocate, an HR consultant or a Union Rep.  You could bring a friend or family member as support or a community leader. Other people in the room could be an interpreter if required.

Keep the Lines of Communication Open

Keen to settle but want to informally discuss what the other party will settle for so an offer can be made? “Fireside chats” (without prejudice discussions) can take place in negotiations prior or after mediation.  These are discussions around what you might settle but can’t be used against you in court. Be careful to ensure all communications are clearly noted “without prejudice” otherwise they are admissible. It is wise to use a legal representative for without prejudice discussions as these are normally only used for serious employment problems.

It’s Not All About Money

Maybe their bottom line is a “Sorry.” Apologies can speed up resolution processes. Sometimes an aggrieved party just wants to hear the words and be assured that they won’t repeat the behavior again. Hearing the other party say sorry and be genuinely apologetic can ensure parties can heal and move on.  Mediation can be a cathartic experience for those seeking a humble apology.

Make Sure You Know What a Settlement is For

If there is a settlement that includes a payment for hurt and humiliation, remember that Hurt and Humiliation payments are non-taxable but payment for lost wages are. The employee may settle for a figure that comprises both hurt and humiliation and a payment for any lost wages so be careful about knowing the difference and taxing these payments accordingly.

Be Mindful of Timelines

Mediators can set time limits for mediation with the agreement of parties involved.  Parties may agree that if the matter is not resolved for example within 5 hours, the Mediator can then make a recommendation in writing about the solution and the date it will become binding.  You can accept or decline the recommendation before the date it becomes binding and if it is not rejected it becomes fill, final and enforceable.

If you are an employer and have employer insurance, you will need to follow the advice of the Insurer who will likely take the matter over and recommend you attend mediation and advise what you should settle for.

Final Thoughts

Mediation is a fantastic way to collaboratively and openly nip employment problems in the bud. Settling by way of mutual agreement which means buy-in of both parties and a salvageable employment relationship in some cases.  Mediation is a quick and easy dispute resolution service that is cost effective for everyone involved. So if you find yourself in a situation where you are unable to resolve an employment issue yourself by talking to the other party involved, apply online for mediation to get it resolved and get back to doing the things you’d rather be doing.

The Government’s Business Finance Guarantee Scheme has been an epic failure. Today, some welcome changes to the scheme have been announced by Finance Minister Grant Robertson.

The scheme has been too restrictive and there was far too much red tape for struggling businesses to jump through. The Government budgeted more than $6 Billion for the scheme when it was originally announced. However, to date, only $150 Million has been lent to just 780 businesses.

Today, the Finance Minister has announced some very welcome changes to the scheme.

What Has Changed:

  • The scope of the loans has expanded from supporting COVID-19 impacted cashflow to supporting businesses to respond to, reposition and recover from the impacts of COVID-19
  • The maximum loan amounts have increased from $500k to $5m; and
  • The loans can now be used for capital expenditure.
  • The maximum loan term has been extended from 3 years to 5.
  • There is now an ability to refinance other debt under the scheme.
  • The turnover cap for businesses has been expanded from $80m to $200m.
  • There are no establishment or early repayment fees.

The total funding available under the scheme is limited. Applications need to be made by 31 December 2020. More detail can be found here: https://treasury.govt.nz/information-and-services/new-zealand-economy/covid-19-economic-response/measures/bfg

The loans still do not apply to residential or commercial property investment. We think the Government has missed an opportunity here as a housing shortage looms with the significant number of New Zealanders returning from overseas.

Let’s hope these changes to the Business Finance Guarantee Scheme allow many more businesses struggling through their response to the pandemic to access the funds they need to secure their operations and thrive in the new normal.

How to Apply

Like the original scheme, applications are made through the participating banks (ANZ, ASB, BNZ, Heartland Bank, Kiwibank, SBS Bank, TSB, Bank of China and Westpac).

Normal credit processes apply, so if you intend on applying you will need to pull together information to support your application.

What the bank will require will vary case by case, but we suggest at a minimum they will want your most recent financial statements and up to date forecasts/budgets (ideally three-way).

If you need help with any of this, reach out to the team for help by emailing your regular MBP Business Partner or support@mbponline.co.nz.

You’ve got a fabulous idea for a new business but are unsure about which business model you should work with. We take a look at B2B vs B2C to help you decide if selling to customers is right for you, or you’d prefer to sell directly to other businesses instead.

What Are the Differences in Selling B2B vs B2C?

You are in business to sell your products or services and make a profit. You’ve got two choices when doing so: sell to the consumers who are the general public or sell to other businesses who will either resell your products or use them to make their products.

Depending on the products you sell, this decision may already have been taken away from you. For instance, if you sell pulp for papermaking, you are most likely going to sell to another business who can turn that pulp into paper. If you sell baby clothes though, you’re probably going to sell directly to your customers.

Let’s take a look at the main differences between both of these business models.

B2B or Business to Business model:

  • selling your product or service directly to another business
  • often requires large product quantities delivered on a set date
  • requires a long-term relationship between you and your buyers
  • involves more people in the buying decision and process
  • possibly selling your product at a lower price than a consumer would pay for it
  • less of a lead pool to grow to purchase your product or service
  • requires in-depth knowledge about and sharing of your product or service
  • a more complex and involved selling process
  • payments are often received a month or later after product/service delivery

B2C or Business to Consumer model:

  • selling product or service directly to individual customers
  • wide lead pool to target and sell to
  • top price for your product/service paid by the customer
  • small quantities sold at a time
  • fewer people involved in the buying process
  • short relationship with customers
  • customers interested in benefit to themselves
  • instant payment upon purchase
  • easier to sell to individual customers than large corporations

As to which path your business should take, it comes down to whether it would work for what you sell and if you are happy to sell that way. Remember though, that both business models will still require the standard business considerations: a website, good bookkeeping and financial management, a business plan, cashflow management and outsourcing. The good news is, we can help you with all of those! Get in touch with our team today to arrange a chat about your business and how we can help.

As small business owners plan for how they will operate after COVID-19, there are some important business questions to be asked about the coming business recovery. These questions will help you determine what adaptations you want to keep, whether your business model is working, and if there are additional changes you want to make to keep your company operational through future economic downturns.

It’s not always fun to do this sort of examination, but the answers to these questions will help you to make the best possible decisions for the future.

What Worked and What Didn’t Work in my Business Model?

Almost all small business owners had to make changes to their business model. Whether it was hosting meetings with clients on Zoom, learning about encryption technology to allow employees access to sensitive information from home, offering restaurant food for take-out or managing dance classes online, most small businesses adapted in some way.

Ask yourself:
Have I have to adapt my business model? Did I alter my goods or services in any way? Have I changed how my premises are used? Do these adaptations enhance my business in any way? Do these changes highlight gaps in my business model that should be addressed? Should I make some of these adaptations permanent?

Maybe you have a lot of clients who would prefer to have meetings online rather than face-to-face. Perhaps offering classes online is a way to reach out to students or clients who can’t attend weekly sessions in person. There may be perfectly good reasons to continue with a revised business model.

Do I Need to Make Changes to my Supply Chain?

You have some control over your supply chain, but not a lot. Disruptions happen and they can drastically affect your business.

Review how the various components in your supply chain reacted to the pandemic and whether they helped your business or hurt it.

Ask yourself:
Did the suppliers in my supply chain remain open and transparent with me? Did they reach out to me to discuss revising our agreement? Were they reasonable in their expectations and willing to work with me? Do I need to have alternate arrangements or back-up plans in case there are future supply chain disruptions?

Your supply chain has a huge impact on your business. Trusting your suppliers and knowing you can work with them will allow you to feel more secure in the future.

How has my Team Adapted?

Your team has faced a great deal of stress and uncertainty during COVID-19, due to professional and personal concerns. Team members may have had to transition to new ways of working—at home, on a new schedule, or with new policies and procedures in place.

Ask yourself:
Are there changes to how my staff works that I could continue to implement? Should I provide additional training for staff? Have I communicated openly with them? How adaptable was my team?

One benefit from having employees work from home more days a week is that such opportunities for remote working can boost employee morale while saving you money. Now that you’ve invested in the technology to allow staff to work from home, is it worth it to allow this scenario to contine, even a few days a week?

Final Thoughts

In addition to looking at your business, take a look at your customers and clients. Were they supportive of your business during this time? Did they turn elsewhere? Did they respect the changes you made to your business or the policies you put in place?

Each of the above questions about your business model, your supply chain, your team and your customers, will help you make informed decisions about your business recovery as COVID-19 restrictions are lifted.

Get in touch with us to chat about your business recovery.

For many small businesses, the best way to increase profitability is to increase turnover, as there’s no limit to sales but there is a limit to how much you can reduce your costs.

Let’s look at how you can focus on each of the five ways in our profit increase calculator to achieve your goal of improving profits.

Increase Your Leads

By interacting with greater numbers of people, you’ll increase your chances of turning more consumers into customers – or at the very least, having them lead you to potential customers.

For example, if you own a convenience store and you can come up with some attractive signage out front to get more people into your store, you’ll increase your leads.

So what can you do to increase leads or make more people aware of your business? A few tactics you might consider using to increase your leads include:

  • Advertising – set a budget and increase how much your business is promoted.
  • Direct marketing – work out your target audience and market directly to them via email.
  • Network – attend industry events and conferences to meet potential customers. These may be moved online for the meantime.
  • Create a website – to open online and international opportunities.
  • Develop new distribution channels – think about using agents, licensing your goods, or using new distributors.

Convert More of Your Leads into Customers

How many potential customers walk out of your store, leave your website, or inquire about your services without making a purchase?

Just imagine if you could convert 10% of those people into customers. How many extra sales per day would that be?

A few tactics you might consider using to convert more leads into customers include:

  • Arrange training for employees – on sales conversion and sales closing methods.
  • Personally attending a sales training course.
  • Running demonstrations – for potential customers to see what you have to offer and how they could benefit.
  • Highlighting the benefits of your goods or services – through promotional material, your website, blog advice, social media platforms, and free trial offers.
  • Preparing incentives – for your staff to offer to potential customers, hopefully encouraging them to purchase.

Increase the Number of Items You Sell per Customer

If you can entice your customers to buy just one more item from your business each year, your sales (and hopefully your profits) will increase.

A few tactics you might think about using to increase the number of items you sell to each customer include:

  • Widening your product range – by asking customers what else they would be interested in buying from you.
  • Bundling products and services together – like adding after-sales help to certain products.
  • Increasing capacity and capability – for example, purchasing extra equipment to increase your capacity while hiring additional staff to enhance your capability.
  • Researching your competitors’ offerings – to find product or service opportunities.

Increase Your Average Sale Value

Can you come up with some ways of increasing the average value of each sale you make? Rather than hiking up prices, see if you can increase prices by small margins (like 1-3%) or find ways to sell higher-priced items more often.

A few tactics you might think about using to increase your average sale include:

  • Training your staff – so they’re confident offering complementary items and upselling more expensive goods.
  • Increasing prices across the board – would your customers notice a small price increase? Consider informing them and trying it, as the extra money will go towards your bottom line.
  • Advertising your higher-valued products or services more often.
  • Developing a premium product or service – and encouraging your regulars to go for it.

Increase Net Profit Percentage

A few tactics you might try to increase your net profit percentage include:

  • Identifying and monitoring your top five expenses in your budget reports.
  • Finding out where you can make savings and reduce costs.
  • Concentrating on higher-margin services or products.
  • Looking into alternative suppliers with cheaper supplies.

Review these five ways of increasing your profits at least every year. In the meantime, plug some figures into our profit increase calculator to test what you could change and the effects of those changes on your profit.

By using simple, practical steps, you can improve your business’s profitability. Chat to us to find out more. Click here to book a free chat with an MBP Business Partner.