Articles & News

13 Mar, 2024
If you own and rent out (on a short-term basis) a room in your home, the bach or an investment property, you need to understand the changes coming on 1 April 2024. If you have booked a property for a work or family trip, anytime after 1 April 2024, you should also continue reading, as there are possibly implications for you too. In 2023 legislation was passed to make all “Electronic Marketplace” transactions subject to GST in New Zealand, even if the person delivering the service, e.g. the home owner, is not GST registered. National campaigned on repealing this law if they got into power, but confirmed in December 2023 that they will now leave the legislation in place. This has meant that platforms like Airbnb, Booking.com, Expedia, Vrbo etc. are all having to frantically update their software to allow for the collection and payment of GST to Inland Revenue (IRD). Some of the team at BFA have properties listed on Airbnb, Vrbo and Booking.com and we have a vested interest in understanding what’s going on, and we admit, it’s pretty disappointing to be this close to 1 April 2024 and not have all the answers! This new legislation covers more than just properties, it also covers Uber and Uber Eats, for example. We are focusing on the property implications. So, what does the law say? That the platform is required to charge GST on all transactions and pay this GST over to IRD where the owner of the property:  is GST registered - to pay 15% to IRD IS NOT GST registered - to pay 6.5% of the GST to IRD and pay the remaining 8.5% to the property owner Where the property owner is GST registered, they now have to report their income as Zero rated on their GST return. This ensures the income is declared and you do not pay the GST twice. This means that you claim your GST on expenses, and will likely receive refunds each GST return. If you are not registered for GST there is nothing for you to do. You only qualify for an exemption if: your income from these activities is over $500,000 per year, or you had more than 2,000 nights booked in a year We have been made aware of the following: Expedia They have NOT been able to update their software and will be removing ALL NZ listed properties from 1 April 2024, unless you qualify for the exemption above. If you have a property listed on Expedia, they possibly may remove it. There is no clear guidance as to what happens if you have bookings for the future but we suggest you contact your guests. Be careful how you do this though, as it’s against Expedia’s rule to make contact with guests outside of their system. If you are travelling and made a booking on Expedia, you may have an issue. contact your host to work out what to do. Vrbo (ex Bookabach) While owned by Expedia, they have upgraded their software and will be able to cope with the new GST. But be aware, from 1 April they will automatically add 15% GST to all bookings. So, this will increase your nightly rate by 15% and make your property more expensive. You will have to manually update your rates should you wish to. Airbnb They too have decided they will add 15% GST to every booking from 1 April 2024. Their system says they are not yet set up to deal with NZ GST. Booking.com They have not yet provided guidance on what they are planning to do. Will they be like Expedia and just stop supporting NZ properties or will they be like Airbnb and just add 15% to all bookings? So, a warning, if you are not GST registered, and you have not told your platform provider, it appears they will default to adding 15% GST to your property and pay this 15% to IRD. How you get your 8.5% back remains a mystery. If you are planning on booking accommodation, be wary of using Expedia or Booking.com, potentially a booking after 1 April 2024 could cost you 15% more!. In any event landlords and holiday makers should revert to their booking platform for the latest information and policies. If you are wanting to know more please reach out to your Client Advisor.
06 Feb, 2024
Starting a trade business is an exciting adventure, but also a challenging one. You have to plan, market, hire, and more. And you have to do it all while climbing a steep mountain of growth. But don't worry, you can reach the top with some smart strategies and hard work. Whether you're new to the game or an old pro looking for a fresh update, here are some tips to help your trade business thrive. Choose your next team member Apprentices Hiring an apprentice is a big milestone in any company’s growth plans. But it’s not always as easy as it sounds – finding the perfect match for your business is hard enough without the trade labour shortage that’s being felt worldwide. Subcontractors Taking on new staff doesn’t have to be a permanent commitment. Hiring a subcontractor can help propel your business forward without the financial and administrative burden of long-term employment. Full-time employees Feel like you need an extra pair of hands to help tackle your workload? Employing full-time staff is a sure sign that your business is growing. If all goes to plan, having one or more full-time staff members should take a lot off your plate so you can focus on winning work and maximising profit. Review your financial situation Income and expenses Running a business requires a lot of financial management. You need to pay your staff, buy equipment, and cover operational costs. If you are having trouble with your finances, you should review your income and expenses. You can also hire an accountant to help you with this. Pricing strategy Setting the right price for your services is important for your growth. A good pricing strategy ensures that you are not losing money by charging too little, and you are not losing customers by charging too much. Streamline your administration tasks Save time and money on quoting and invoicing As a trade business owner, you don't want to waste 18 hours a week on paperwork. You want to focus on growing your business and delivering quality work. That's why you need a software solution that can help you create and send quotes and invoices quickly and easily. For example, Tradify. Manage your jobs efficiently More jobs mean more growth for your business. But, if you lose track of your jobs and miss deadlines, you'll lose customers and reputation. That's why you need a software solution that can help you monitor and manage all your jobs, giving you a clear overview of what's done, what's due, and what's next. Update your website Your website is often the first contact point for potential clients, so make sure it showcases your business in a positive way. Follow the basic principles of modern web design – keep it clean and professional, with clear information about your company and the services you provide. Photography is important. You don’t have to hire a professional photographer, just make sure your photos are good quality, in focus and showcasing the best of your business. Register with an online directory A strong online presence is vital for your trade business. You don't want to lose customers to your competitors because they can't find you on the web. There are lots of directories available specifically for tradies. Use free online tools You can market your trade business without breaking the bank. There are many free online tools to help you reach more customers. For example, MailChimp is a great tool to grow your business by sending newsletters, surveys, and special offers to your email list. You can use their basic plan for free, or upgrade to their premium service if you need more features. Another must-have tool is Google My Business. It helps you show up on Google Search and Google Maps, so people can find you easily. Use customer reviews According to Forbes, 84% of people trust online reviews as much as a personal recommendation, and 74% say that positive reviews make them more likely to trust a local business. Social media Social media is a powerful tool for digital marketing that you can use to grow your business and connect with your customers. Many tradespeople are already on social media, sharing their work, their stories and their tips. Here are some of the best practices for making the most of your social media presence: Be authentic . People want to see the real you, not a sales pitch. Show your personality, your passion and your values. Don't be afraid to be yourself and have some fun. Be responsive . When someone messages you on social media, they expect a quick reply. If you take too long, they might lose interest or contact someone else. Try to answer as soon as possible and show them that you care about their needs. Show your work . One of the best ways to attract new clients is to show them what you can do. Post photos and videos of your projects, before and after shots, testimonials and reviews. Let your work speak for itself and impress them with your skills. Be the expert . You have a lot of knowledge and experience in your trade, so why not share it with your audience? Post relevant articles, news, tips and tricks that can help them with their problems or questions. This will establish you as an authority in your field and build trust with your potential customers. Link to other platforms . Social media is fast-paced and dynamic, so you might not have time to update all your profiles every day. You can reuse content across different platforms and link them to your website where they can find more information about you and your services. Other marketing options Not everyone is online or on social media, so you need to reach out to them in other ways. Offline marketing can help you attract more customers and grow your business. Here are some tips: Advertise in print media. Newspapers and newsletters are still popular among some customers, especially the older ones or those who enjoy reading on weekends. They might notice your ad and contact you. If you have company vehicles , use them to display your logo and contact information. That way, people will see your business wherever you drive and may remember you when they need your services. Wearing uniforms or t-shirts with your business name and logo makes your staff look professional and united. It also helps people identify your business and trust you more. Word of mouth is a powerful marketing tool. You never know who might need your services or who might refer you to someone else. So, chat with your neighbours, friends, colleagues, and anyone else you meet. You can also join local business networks and make more connections. Review what you do and how you do it Things can change drastically over a few months. You can easily get swept into the motion of running a business and be doing things the same way 10 years on – and your business could be suffering because of it. It’s important to take an occasional step back to review how things are going, re-evaluate and refresh areas that need it. Review your finances, look at your cash flow, ask your staff for feedback on what is working well, not working well, and how they are feeling. To keep your business healthy, you need to step back occasionally and look at your business from the outside – and be prepared to make changes, even drastic ones, if that is what is needed. Work hard and see your business flourish You love your trade business, but you want to make it even better. To do that, you need to invest time, energy and persistence – and you need to have a plan for growth. The key areas to focus on are your marketing, finances and staff – these are the foundations of your success. If you put in the effort, your business will reach new levels of excellence.
04 Feb, 2024
If you run a trade business in New Zealand, you know how important it is to get good reviews from your customers. Reviews can help you attract more clients, build trust and credibility, and boost your reputation in the market. But how do you get good reviews for your trade business? Here are some tips to help you out. Provide good service The most obvious way to get good reviews is to deliver high-quality service that meets or exceeds your customers' expectations. Whether you are a plumber, electrician, builder, or landscaper you should always do your best to complete the job on time, on budget, and with professionalism. Quality service is the foundation of customer satisfaction and loyalty. Ask for feedback Don't be shy to ask your customers for feedback after you finish the job. You can do this in person, by phone, by email, or by text message. Thank them for choosing your business and ask them how they feel about the service they received. If they’re happy, ask them if they would be willing to leave a review on your website, social media, or online platforms like Google My Business or Trade Me Services. Make it easy for them to leave a review by providing them with a link or a QR code. Respond to reviews Whether you get positive or negative reviews, you should always respond to them promptly and politely. Thanking your customers for their positive reviews shows that you appreciate their feedback and value their business. Addressing any issues or complaints in your negative reviews shows that you care about your customers' satisfaction and are willing to resolve any problems. Responding to reviews also helps you improve your online reputation and visibility. Offer incentives Another way to encourage your customers to leave reviews is to offer them some incentives or rewards. For example, you can offer them a discount on their next service, a free gift card, or a chance to win a prize draw. Incentives can motivate your customers to share their experiences and opinions with others and show them that you appreciate their support. However, make sure that your incentives are ethical and transparent, and do not influence the content or tone of the reviews. Showcase your reviews Once you get good reviews for your trade business, don't let them go unnoticed. Showcase them on your website, social media, flyers, brochures, or vehicles. Displaying your reviews can help you attract more customers, enhance your brand image, and increase your confidence and pride in your work. Showcasing your reviews can also inspire your existing customers to leave more reviews and spread the word about your business. Getting good reviews for your trade business isn’t hard if you follow these tips. Reviews can help you grow your business, improve your service quality, and strengthen your customer relationships. So don't hesitate to ask for feedback, respond to reviews, offer incentives, and showcase your reviews. You'll be amazed by the results! If you need help – let us know.
31 Jan, 2024
Every business needs a job management system. This is even more important for builders or tradies who have projects spanning over a number of months as well as having other smaller jobs. Rather than turning down the smaller jobs, if you use a job management system, those smaller jobs can be scheduled as fill in jobs while you await other contractors for the bigger projects. Not only will you be able to optimise yourself and your staffs workload, but you can also predict when work is due to run short to give you time to make decisions to forward plan. Buildertrend is a system that provides many benefits for the business owner as well as the customer.  If you are a builder or tradie who's feeling the pinch of a slowing market, don't panic - there are ways to keep your business thriving: What are your best projects? Think about which types of projects bring you the most profit. Can you offer more services around those projects or to those clients? Focus on the work that gives you the best returns and expand your skills and offerings in that area. What about public sector work? Government and local council work is always available, even when the economy is struggling. Look for opportunities to work with these clients and impress them with your quality and reliability. They may not pay top dollar, but they have steady work, deep pockets, and they won't go bust. What about high-end projects? Another group of clients with deep pockets are those who build bespoke homes and commercial buildings. They want the best products and services, and they're willing to pay for them. They may cut back on some extras in a recession, but they'll still spend big to achieve their dream designs. How can you save money? Look for ways to cut costs - streamline your systems and processes to save time and money wherever you can. For example, one industry source said they use cheap mobile tablets to speed up onsite decision making, according to Westpac's recent report on the sector. Are you looking for ways to boost your income and cut your expenses? We have a lot of experience working with builders, tradies and construction companies – we understand the challenges you face in your industry. We can help you review your accounts and find new opportunities to increase your revenue and lower your costs, so you can grow your business and stay ahead of the competition. What are you worried about? Reach out to us by phone, email or text. We are here to help.
21 Jan, 2024
No matter how you feel about sorting things out, you can't afford to let your inventory get messy. A disorganised stock can drag down your retail business and cost you money. That's why you need to stay on top of your inventory management and make it work for you. Retail stock control is a vital part of running a successful business. It means keeping track of how much, where, and what kind of goods you have in stock, as well as predicting how much you will need and sell. Retail stock control helps you make your customers happy, save money, and boost your profits. If you are a retailer in New Zealand, you know that retail stock control can be tricky. You have to deal with the distance from other markets, the changing seasons, and the different tastes of your customers. That's why you need to use smart strategies and tools to manage your stock efficiently and effectively. Here are some great tips for retail stock control: Use a cloud-based inventory management system that can work with your point-of-sale, e-commerce, and accounting software. This way, you can see your stock levels, sales, and orders anytime and anywhere on any device. Use a barcode scanning system that can make your data entry and verification faster and easier. This way, you can avoid mistakes, save time, and improve accuracy. Do regular stocktakes to check if your physical inventory matches your records. This way, you can find out if there are any errors, losses, or damages, and fix your stock accordingly. Use the ABC analysis method to sort your inventory into three groups based on their value and turnover rate: A (high value, low turnover), B (medium value, medium turnover), and C (low value, high turnover). This way, you can focus on your most important stock and use your resources wisely. Use the economic order quantity (EOQ) formula to figure out the best amount of inventory to order at a given time. This way, you can reduce your ordering and holding costs, while meeting your customer demand. Use a just-in-time (JIT) inventory system that can deliver your products to your customers as soon as they order them. This will help you reduce your inventory levels, storage space, and waste, while increasing your cash flow and customer satisfaction.
11 Dec, 2023
Are you concerned with the size of your mortgage repayments and worried about interest rate hikes? Have you considered negotiating with your bank for a better interest rate? Interest rates are influenced by many factors, such as the official cash rate set by the Reserve Bank of New Zealand, the cost of funding for banks, the demand and supply of credit, and the competitive pressure among lenders. However, did you know that the rate that your bank advertises is not necessarily the best rate that you can get? Here are some tips on how to negotiate a better interest rate from your bank in the current financial climate. Do your research Before you call your bank, check what rates they have available on their website and compare them with other banks and lenders. You can use online tools such as interestrates.co.nz or globalfinance.co.nz to find the best deals in the market. This will give you an idea of what rate you are trying to beat and what options you have if your bank doesn’t offer you a satisfactory deal. Be prepared Have your financial information ready, such as your income, expenses, assets, liabilities, also your credit score, and loan-to-value ratio. This will help you demonstrate your ability to repay the loan. You should also have a clear goal of what interest rate you want and how long you want to fix it for. Be realistic but assertive in your expectations Ask for a discount Call your bank and speak to someone on the home loan team. Explain that you’re looking for a better interest rate and ask them what they can offer you. Don't be afraid to mention that you have done your research and that you are aware of the rates offered by other lenders. Even if they offer you a rate that is lower than their advertised rate, ask them if they can do better. If they offer you a rate that is higher than their advertised rate (and this does happen sometimes), ask them why and challenge them politely. Negotiate other benefits Interest rate is not the only factor that affects the cost of your mortgage. You should also consider other benefits such as cashback, fees, repayment flexibility, offset accounts (If you hold money in an offset account over a period of time, you can reduce the amount of interest charged on your home loan), redraw facilities (lets you access extra repayments you've made on your home loan), and loyalty programs. Sometimes, your bank might not be able to lower the interest rate further, but they might be able to offer you other incentives that can save you money or make your loan more convenient. Be prepared to switch If your bank is not willing to negotiate or offer you a competitive deal, you should be prepared to switch to another lender that can meet your needs. However, before you do that, make sure you factor in the costs and benefits of switching, such as break fees, application fees, valuation fees, legal fees, and any cashback or discounts offered by the new lender. You should also check the terms and conditions of the new loan and make sure they suit your situation. You can benefit from negotiating with your bank for a lower interest rate on your loan. This could save you thousands of dollars over the life of your mortgage and mean you pay off that loan faster. However, it does require some research, preparation, communication skills, and persistence – yes, keep trying! If you need help with this process, you can make contact with us at marketing@bfa.co.nz and we will put you in contact with one of our team, or you can consult a professional mortgage broker who can act as your advocate and negotiate on your behalf with multiple lenders.
07 Dec, 2023
One of the biggest benefits for you and your business by using accounting software such as Xero is accurate and timely reports. At BFA, we encourage clients to be proactive and take control of the financial sustainability of your business. Reports available in most accounting systems that you should be using are: Bank reconciliations This report shows you that the bank balance and your accounting system agree – if they don’t, you may need to finish your coding or check for any missing data. You should reconcile your bank accounts regularly to ensure that your software reflects the true state of your current position. The Profit and loss report shows you how much income and expenses you have We encourage clients to prepare budgets, and to enter these into your accounting system. You can customise these Profit and Loss reports to add in a variance column as well as a comparative year column. These reports will help you track your performance against the prior year and your objectives. As this report is available by a click of a button, that leaves you to spend all your time analysing the variances, identifying any gaps or opportunities for improvement. Cash flow It’s all good and well saying you made a profit of x but if you’re wondering where all that money went, run your eye over the cash flow report to see exactly where your money has gone. The cash flow report will show all costs including drawings, tax, capital expenditure and loan payments. These don’t appear in the Profit and Loss Report so don’t be left confused wondering where has all your money gone?! Balance sheet Everyone wants to know their equity position. The Balance Sheet report is where you’ll find this. Just be aware that if you run this report, you will need to ensure items such as inventory are updated as this can impact the bottom line considerably. Key Performance Indications (KPI’s) You can also use all of these reports to set and monitor KPIs, which are measurable values that indicate how well you are achieving your strategic goals. KPI’s are a quick way to identify areas of improvement for your business. While all these reports are exciting and beneficial for your business, it is important to note that the reports will be meaningless if your coding isn’t correct. Coding affects how your data is recorded, processed, and reported by your software, so it is essential that it is accurate and consistent. Coding can also help you analyse your data in different ways, such as by product, service, customer, project, or location. By knowing how to use your accounting software effectively and efficiently, you can take advantage of its many features and functions to produce reliable and useful reports that can help you manage your business finances better. If you would like to explore getting more out of your accounting system, contact the team at BFA .
05 Dec, 2023
Spending time training staff who are new to your business is a must, but n ot many people think about upskilling existing staff so that the skill set in your business increases. This could be having more employees able to do the same tasks or expanding the skill set of the employee(s) so that you’re able to take on new tasks in your business. A bonus is that when your employees receive training, they can see that you're invested in their future which makes them feel valued, empowered, and engaged. This not only increases how your team feels about their job and the company but also the overall productivity of the workforce. Investing in the future of your team If you want g reat things from your people, you’ve got to give them the v ery best support. A job is not a static thing. It’s a role that will evolve and change over time, with new skills, new job descriptions and new responsibilities along the way. To offer your team the best opportunities, make staff training and development a key area on your business leader’s to-do list. As a starting point: Find out what training and education your people want – there’s no point second-guessing what your team wants to learn. Talk to each team member and ask them where they feel they need extra skills, or where there’s room for progression in their training. This can be an enlightening process and helps you get an angle on where these new skills could be used within the business. Help them find the relevant courses or in-house training – you may be able to offer some key training in-house, as long as you have people available to do this, who have the skills. There are also plenty of professional bodies, industry institutes or colleges that will offer courses in the right areas. Some may qualify for Continuing Professional Development (CPD) points, a system that helps your employees rack up development points and move towards a professional qualification. Set clear targets for their education in the business – once you’ve identified the learning and development that’s needed, make sure this is added to the employee’s development plan for the year. Your employee’s goals could be to complete an online training module, go on a residential course, or take part in mentoring sessions with a senior colleague. The important thing is to agree on the goals, set the right timelines and track each person’s progress against their plan. Set a career path and give employees increased responsibility – a key goal for most employees will be to aim for a promotion. With their learning and development goals set, you could also think about giving your employee new responsibilities, testing out their managerial skills or giving them specific projects to manage and curate. By taking on these challenges and testing their new skills out in the real world, you’ll help them build confidence and gain valuable hands-on experience. Check in with your staff regularly to see how they're doing – hopefully, you’ll have a quarterly or yearly review process already set up for your staff. But don’t leave discussions about development purely for these review conversations. Check in with your people throughout the working week and use these informal, relaxed chats to see how each person (and each team) is doing. Setting up a staff training programme An investment in employee development is an investment in the future of your business. It’s a sign that you want to support the careers and progression of your people. And anything that’s good for your employees, is good for your business. For further information on this article please make contact with us via email: marketing@bfa.co.nz
03 Dec, 2023
We all know that health and safety is important when you work a physically demanding job, but what about when you spend large amounts of time sitting in an office or standing for long periods during the day? Here are some tips on how to create more ergonomically designed workspace to keep your employees happier and prevent injuries. Office Jobs Sitting for l ong periods of time without movement and breaks can lead to staff developing discomfort, pain and long-term injuries to their hands, arms, and necks. Consider the following to help create a better office environment: Screen height Our bodies like to be neutral, not straining to look up, down, or at an angle for eight hours a day. Your screen height should be so that your eye level is at the top of the toolbar. You can buy screen risers or laptop stands to ensure you screen is at the right height. Incorrect chairs A chair is a chair, right? Not necessarily. Chairs that are at the wrong height, old, broken, or sloping don’t make for a comfortable position. Buying new chairs is an easy fix and can make a huige difference. When buying work chairs make sure to check their seating tolerance. This is how many hours you can comfortably sit in the chair before you start to get uncomfortable. Look for ones that can withstand 6-8 hours of use. You’ll also want to consider the seat back to make sure it’s high enough to support your back, so you maintain good posture. Mice and keyboards A computer mice fits in your hand but what about your thumb and the finger poised over the button? There are ergonomically designed computer mice that aim to reduce the strain on your fingers, thumb and arm and are relatively inexpensive to purchase. There are different kinds so if you have a larger workforce, it pays to ask them what they like and will be most comfortable. Keyboards are the same. Broken keyboards that are flat and/or lack a comfortable place to rest wrists can create wrist strain, so consider asking staff if they’d like a gel pad or different keyboard to help reduce this strain. Lack of movement Regular movement helps prevent injury, pain and benefits your health overall. Encourage your staff to take regularly breaks – it could be as simple as getting up to make a cup of team, moving to a different area for a team meeting or 5-10 minutes outside in the fresh air. What about standing a lot at work? If you or your employees spend a lot of time standing at work, there’s an increased chance of discomfort, pain, and injury. If you’re walking around, you won’t have too much of a problem. It’s the static standing that can cause sore feet, knees, hip and back. Long-term effects can be debilitating, including inflammation to the arch of your foot (Plantar Fasciitis), which can cause so much pain it becomes impossible to stand and it can be tricky to fix. Footwear Encourage everyone to wear appropriate, well-fitted footwear. If you have staff with issues already, they could consider orthotics, heel cups, or gel inserts to take off some of the pressure. Rubber mats Anti-pressure or anti-fatigue mats create a softer surface to stand on, which can makea huge difference. If you have staff who need to stand for extended periods of time, buy them a mat or two so they reduce the strain. Or consider what tasks could be undertaken sitting down so they can take a load off. Movement Try to reduce the amount of time staff are standing but encouraging them to move and walk around. For further information on this article please make contact with us via email: marketing@bfa.co.nz
17 Sep, 2023
The cost of keeping an employee vs hiring a new employee For many businesses the cost of wages/salaries are their biggest cost each year. It’s a big number they see in their financials and so they try to keep that cost down. In turn, this means some companies can be hesitant to give pay raises to employees as they feel they can’t afford it. And whilst it’s important to think about how much you can afford, what happens if that employee leaves and you have to employ someone new? How much will it actually cost you to replace them? Low pay rises can actually end up costing you more Unfortunately, it’s common for companies to offer their employees low pay rises which can make employees feel underappreciated, and they end up quitting in the not too-distant future. The employer thinks that’s fine, employs someone new on the old/lower wage - problem solved right? What some employers fail to consider is that there are costs associated with onboarding a new employee. The most obvious, the costs of replacing them, but it’s also the time spent training the new employee, and the lost productivity/efficiency as the new employee come to grips with the role. Once you start to crunch the numbers, you might realise that giving your existing employee a reasonable pay rise may have been the cheaper option. A 2021 Australasian survey put the cost of employing a new employee at around 40% of their salary – an average of $23,860 per employee. So that low pay rise offer could cost your business a lot more than you bargained for. Not paying a comparable salary might cost you an employee If you run the numbers, you’ll see the impact that an insufficient pay rise can have. For example, you have a current employee, Kevin, who is an operations manager, and his salary is $60,000. You offer Kevin a 4% pay rise, which will cost you around $2,400 more each year. With inflation running at around 7%, Kevin feels this isn’t enough, finds a job paying $68,000 and hands in his notice almost immediately. If you had provided Kevin with a 10% pay rise, it would have cost you around $6,000 more but you would have kept an employee who knows the ins and outs of your business. Instead, you now have to find a new employee which could cost you an extra $20,000 or more. Running the numbers When evaluating pay rises, make sure you research salaries in your industry, factor in inflation, and the cost-of-living crisis. Also, consider how easy it would be to replace the person and how much value they bring to your business. There may be extra benefits you could offer a valuable team member (it’s not always just about money): do they want more flexibility or a four-day week? Before your next remuneration reviews, or if you are looking to employ a new person, get us to run the numbers for you to see what the real cost is for you. If you have any questions about pay rises or hiring this year, get in touch, we’re happy to help.
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