Hiring Employees in New Zealand

Hiring employees can be a game-changer for your business, but it's no small feat. This guide will walk you through the essential steps for successful employee recruitment in the New Zealand market.

1. Understanding Your Employer Responsibilities

Before you dive into hiring, it's crucial to know your employer responsibilities. Your reputation hinges not only on customer experiences but also on how well you treat your employees. Here's what you should focus on:

Act in Good Faith & Treat Employees Fairly: Building a good reputation starts with treating your employees with respect. Acting in good faith and maintaining fairness is essential. This fosters a positive work environment and enhances your standing as an employer.

Allow Employees to Voice Concerns: Encourage open communication and address employee concerns promptly. A culture that values employee feedback contributes to a happier and more productive workforce.

Ensure Timely & Accurate Payment: Your most significant employment responsibility is ensuring employees are paid correctly, on the agreed-upon day and frequency. Consistency in payment builds trust and satisfaction.

Deduct the Correct Amounts: Managing Tax, ACC and KiwiSaver deductions can be complex. To simplify this process, consider using online payroll software to ensure accurate calculations based on individual earnings and tax codes.

Handle Leave & Public Holidays: Understanding various types of leave, such as annual, sick, bereavement, parental leave, and more, is crucial. Be aware of the number of days employees are entitled to and the applicable pay rates, especially during public holidays.

Prioritise Health and Safety: Your legal obligation includes providing a safe work environment, safe work systems, proper equipment, and necessary training to mitigate risks. Collaborate with a health and safety specialist to create a comprehensive plan.

Protect Employee Privacy: To protect sensitive employee data, always seek explicit permission for its retention. Safeguard this information and refrain from disclosing it to unauthorised parties. Additionally, provide employees with copies of their personal data upon request.

2. Register as an Employer

Once you've grasped your responsibilities, it's time to register as an employer. Here's what you need to do:

Obtain an IRD Number: To register as an employer with Inland Revenue, you'll need an IRD number. If you don't have a business-specific IRD number, you can use your personal one.

Understand Employment Laws: The employment process in New Zealand is governed by specific laws. To ensure compliance, seek advice from an employment lawyer or consult government resources that outline employment laws and your obligations. The Ministry of Business, Innovation, and Employment (MBIE) offers a comprehensive list of these laws.

3. Crafting & Promoting the Perfect Job Description

Finding the right employee is like matchmaking. To succeed, you need an enticing job description that stands out. Follow these tips:

Write an Inclusive Job Description: Inclusivity in your job description is vital to prevent discrimination and align with diversity and equality laws. Ensure that your language is thoughtful and accommodating for individuals with disabilities or unique family circumstances.

Promote the Job Effectively: Once you've crafted your job description, you need to promote it effectively. Use a multi-faceted approach, including posting it on your website, seeking referrals from existing employees, business partners, or clients, utilizing your company's social media accounts, and exploring other channels like industry associations, local community groups, universities, job boards, and even recruitment agencies if your budget allows.

4. The Recruitment Process

With a compelling job description in place, it's time to navigate the recruitment process:

Create Clear Criteria: Based on your job description, develop a clear set of criteria that highlight must-have attributes. Additionally, consider nice-to-haves, which can be helpful in differentiating between candidates with similar qualifications.

Build a Shortlist: Identify two to three top candidates who align with your criteria. Keeping the shortlist concise helps streamline the recruitment process. Remember to send courteous rejections to candidates who don't make the cut.

Prepare for Interviews: Design a structured interview process, defining the length and questions you'll ask. In addition to assessing skills and experience, delve into other aspects, such as candidates' motivations, work styles, strengths, weaknesses, and how they handle challenges.

Making Your Selection: When assessing candidates, stick to your predetermined criteria and avoid relying solely on personal rapport during the interview. If relevant, involve other team members or partners in the decision-making process. Remember to check references to verify the candidates' qualifications.

5. Employee Onboarding

An effective onboarding process sets the tone for a productive employment relationship. Here are some tips:

Prepare Everything in Advance: Ensure all necessary onboarding materials and resources are ready before your new employee's first day. A well-organized onboarding process helps new employees feel welcome and valued from the start.

Make It Personal: Adding a personal touch to the onboarding experience, such as a warm welcome and introductions, can make your new employee feel valued and integrated into your team.

Provide Comprehensive Information: Don't overlook even the smallest details, such as where the lunch area is or how to use office equipment. Offering comprehensive information ensures new employees have everything they need to succeed.

Clarity is Key: Provide clear guidance on how new employees can succeed in their roles, including a roadmap of expectations and goals.

Constant Communication: Foster open communication by letting new employees know that you're available to answer their questions, provide support, or simply have a casual chat. Encouraging questions and feedback helps new employees feel more comfortable in their new role.

6. Running Payroll for Your Employees

Payroll accuracy is vital for a smooth employer-employee relationship and legal compliance. Here are the ways to handle payroll:

Spreadsheets: For small operations, using spreadsheets can be cost-effective. However, as your team grows, this method becomes time-consuming and may not meet tax reporting requirements. In New Zealand, filing electronically is mandatory for businesses with annual PAYE and ESCT exceeding $50,000.

Outsource to a Specialist: Outsourcing payroll to professionals ensures that deductions, tax reporting, and compliance are managed efficiently. Keep in mind that this option incurs additional costs, and maintaining regular communication with the service provider is essential.

Online Payroll Software: Online payroll software streamlines the process by calculating pay and deductions, generating payslips, and providing reports for tax authorities. It's a more scalable solution that automates many payroll tasks.

7. Managing Employee Evaluations

Evaluating employee performance is essential for growth. Here's how to do it effectively:

Be Prepared: Schedule employee evaluations in advance and prepare thoroughly. Review the employee's job description, notes from regular check-ins, and gather feedback from their manager, colleagues, or customers they've interacted with.

Encourage a Two-Way Conversation: Make the evaluation process collaborative. Encourage employees to share their perspectives on their successes, areas for improvement, and job satisfaction. Provide constructive feedback that employees can act on. During evaluations, strive to minimize bias and focus on an objective assessment of performance.

Outline Future Goals: Set achievable goals for your employees and involve them in the goal-setting process. Regularly revisit and update these goals during each evaluation. Additionally, use this opportunity to discuss pay increases and bonuses.

Unlock the Power of Hiring in New Zealand!

With these steps, you'll navigate the dynamic landscape of the hiring process in New Zealand, forging a robust, sound, and harmonious employer-employee relationship.

At Sparkes Walker, our experienced team is ready to assist you throughout the employment journey. Whether it's setting up your employer registration or selecting the ideal payroll solution, we're by your side every step of the way.

Embark on your journey to assemble a remarkable team that will propel your business to new heights!

*Sparkes Walker Chartered Accountants Ltd does not provide legal advice. This guide has been provided for information purposes only. You should consult your own legal advisors before taking action in relation to any of the provided content.