Hiring your workforce in New Zealand
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Onboarding a new workforce in New Zealand means understanding the way in which employees are recruited and hired in that country. Learn more about the New Zealand workplace and compliance culture here.
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Recruiting and hiring in New Zealand.
Off the back of its strong response to Covid-19, New Zealand is shaping up to be an excellent location for global expansion in the coming years. Setting up your business operations in New Zealand means understanding both the workplace culture, and the distinct compliance environment that applies there.
While there are some similarities between work culture and compliance in New Zealand, and the approach taken in other English-speaking countries, there are also variations. Here we set out some key elements of the talent acquisition and hiring process in New Zealand.
New Zealand Work Culture
Before canvasing the business structures for recruiting and hiring in New Zealand, it is worth having an understanding of its distinct work culture. What defines New Zealand work culture? Some key elements include:
- Hierarchy. In New Zealand workplaces. there may be less hierarchy than you are used to. Senior managers generally value input from junior employees. Relatedly, workers are usually expected to operate with a high degree of independence and without a rigid structure in place: ‘Micro-managing’ employees is frowned upon;
- Language in the workplace. In nearly all cases, within an organization or in business, people refer to each other by their first names only. In addition, workplace language may be more informal than in other countries. For, example, meetings may be referred to as ‘catch-ups’ and (especially in more manual workplaces), break times may be referred to as ‘smoko’;
Organization size. New Zealand businesses may be smaller than what you are used to in other countries. For example, the median size of a business in the USA is around 26 employees, compared to around 14 in New Zealand. One implication of this is that there are far fewer layers of management. Employees are more likely to find themselves working directly with senior management and executives. Another consequence of this is that there may be less ‘specialization’ in the workplace. As workplaces are smaller, an employee may find themselves working across the organization, rather than confined to specific tasks.
Which business set-up might you consider for hiring in New Zealand?
When setting up in New Zealand, you need to carefully consider what would be the best mechanism for recruiting and hiring local staff in accordance with that country’s laws and regulations. Some possible business structures to consider include:
- Global Professional Employer Organization (global PEO). A global PEO is able to recruit and hire staff to work directly for an international enterprise in New Zealand. This means that the global PEO takes on all the legal and tax obligations relating to employment, leaving the enterprise to pursue its core business;
- Limited Liability Company. A company is the most common form of legal entity that can be set up in New Zealand. These are extremely easy to set up, though it is worth noting that there are strict rules in place regarding foreign ownership in companies;
- Limited Partnerships. These relatively new types of business structure (created in 2008), create a new legal entity, and limit the liability of partners, while allowing partners to directly receive the profits of the entity;
- Trading trusts. In a trading trust structure, extremely common in both New Zealand and Australia, a limited liability company is set up to be a sole trustee, with a range of other individuals or entities eligible to be beneficiaries of the trust. This arrangement can have significant tax benefits.
Compliance in New Zealand
Hiring in New Zealand means complying with a range of different laws and regulations. Employer obligations include.
- Payroll taxes. Employers must withhold and submit payroll tax to the Inland Revenue Department (IRD);
- Employers and employees are both required to pay into a compulsory pension fund known as ‘Kiwisaver’;
- Workers’ compensation. All employers are required to pay into a public workers’ compensation scheme run by the ‘Accident Compensation Corporation’ (‘ACC’). This provides compensation for any employees injured in the workplace;
- Contracts. All employees must have a written employment agreement which specifies their entitlements and obligations and is otherwise consistent with the law.
