Kiwis work longer, deliver less
Despite the longer hours New Zealanders are working, their counterparts overseas are still earning more, a report has found.
The Productivity Commission's report, Productivity by the Numbers, highlights a growing gap between New Zealand and others in the Organisation for Co-operation and Development.
Kiwis work 15 per cent more hours a year than the OECD average, but despite the longer hours produce 20 per cent less economic activity per hour.
The report said productivity growth had stalled since 2000, and the gap between New Zealand and its peers - including Australia - was widening.
New Zealand's productivity growth rates were in the bottom third of the OECD, the report said.
New Zealand's lower economic base, combined with low productivity growth rates, was a matter for some alarm.
"This is highly unusual internationally and raises serious concerns."
The report said the lower productivity growth could be due to New Zealand being slower in adopting new techniques and practices.
New Zealand Initiative research fellow Jason Krupp said the report delivered unsurprising news but finding a solution was not simple. "The thing to come out of the report is productivity is not related to how much work we put in. We're not bludgers by any measure, but what it shows is that there's a lack of investment in our businesses."
The release of the report attracted criticism of the Government's economic management from opposition parties.
Labour deputy leader and finance spokesman David Parker said it was ominous that the report noted there was no sign the gap between New Zealand and its OECD counterparts was closing.
"The sad thing about this is the report says there's no sign of us catching up. Unless we do something the future for New Zealand is low wages," he said.
Mr Parker said low wages would exacerbate the productivity problem as ambitious and talented young people - who could help improve the economy - would leave the country to seek work in better-paying markets.
A spokeswoman for Finance Minister Bill English called the report a "useful contribution for getting to the bottom of New Zealand's productivity puzzle".
Mr English said lifting productivity was not a matter of working longer hours and a package of more than 300 initiatives had been launched to make the economy more productive and competitive. "There is no silver bullet."
Work/life balance and holistic approach key
When he feels his productivity has gone out the window, a Wellington entrepreneur accepts it and jumps on his motorbike.
Four-and-a-half years ago Chris Archer, who had been working in the wine-making industry for more than 20 years, had an "epiphany" and decided to try his hand at making and exporting a sparkling wine called Joiy.
He says the problem with start-up businesses is constantly being "time-poor". Working more than 60 hours a week came with the territory.
But some days when productivity was low it was a case of accepting you're not getting anywhere. "If it's one of those days I'll jump on my motorbike and go over to the Wairarapa," he says. "It's about having a work/life balance."
With four children, including 9-year-old twins, and a partner to spend time with, Mr Archer says he needs to be smart with the hours available. "I hate constant clock-watchers and truly believe as long as goals are set and they're achieved then it doesn't matter what hours are worked."
Now at tipping point and unable to fit any more work into his week, he's learnt to delegate and bite the bullet and spend money on skilled contractors. "Contractors are specialists at what they do so it's better I outsource, than me spending time and not getting to where I want."
Business trips were almost weekly and his mission while away was to get the job done as quickly as possible and get home to his family.
The key to productivity was employees having a holistic approach. "You can't say, ‘I'm just the receptionist and have no effect on the overall performance of the business'. Everyone has to be working together to achieve the business goals regardless of their role."
- © Fairfax NZ News
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