The People Puzzle
If cash is the oxygen and customers are the heartbeat, staff are the muscles of a New Zealand SME. Without them, the business can’t function. Few issues create more frustration for owners than underperformance and high turnover. How do you get the best out of people? How do you keep them from leaving for bigger pay packets or offshore opportunities? These questions linger long after the workday ends.
Mike, who runs a construction company in Tauranga, knows the pattern too well. Despite paying well, staff turnover stayed high. Apprentices trained for two years then left for Australia. Senior foremen were poached by major projects offering more money. Recruitment felt like a revolving door. Training became endless. Mike was always rebuilding.
Why Staff Issues Arise
Through their work with owners across sectors, Pivotal People consistently see these factors at play:
Tight labour markets in sectors like construction, healthcare and trades
Skilled workers leaving the country
Generational shifts in values – flexibility often beating out pay
Lack of clear career pathways in smaller firms
Poor communication or lack of feedback
Gaps in leadership confidence
Mike’s experience is not unusual. Economic forces are real, but culture and clarity also shape who stays and who leaves.
Rethinking the Issue
Performance isn’t something staff bring on their own. It’s co-created by environment, expectations and leadership. Pivotal People often remind owners that retention isn’t about locking people in – it’s about giving them reasons to stay.
Imagine a garden. Plants don’t thrive just because they’re strong. They need the right conditions. So do people.
Practical Tactics Pivotal People Recommend
Define the role clearly. Ambiguity fuels confusion and frustration.
Ditch the annual review. Frequent check-ins work better than big yearly downloads.
Map a pathway. Even in small teams, show what growth looks like.
Recognise contribution. Call out effort. Celebrate results. Consistently.
Offer flexibility. Where possible, shift hours or structure. It matters more than you might think.
Train intentionally. Don’t wait until there’s a gap – build skills ahead of time.
Conduct exit interviews. Every departure is a clue. One insight might save five others.
Case Study – Mike’s Retention Strategy
Mike decided money wasn’t enough. He shifted focus to culture. Weekly site meetings now include time for recognition. A clear career ladder shows apprentices how to move from trainee to foreman to project manager. Partnering with a local polytechnic, he began co-funding training. Turnover dropped 30 percent in 18 months. Staff engagement lifted. Productivity followed.
Case Study – A Wellington Marketing Agency
Sarah, who runs a digital agency in Wellington, struggled not with turnover but with inconsistency. Her young team missed deadlines and clients complained. Initially, she thought motivation was the issue. After connecting with a Pivotal People advisor, she saw the root cause – vague roles and no structure.
She added weekly planning sessions, introduced project management tools and clarified who did what. Peer feedback became part of the rhythm. Six months in, client feedback improved. Referrals grew. Performance changed not because she pushed harder, but because expectations became clear and accountability was shared.
The Emotional Toll
Staff issues hit hard because they feel personal. You train someone, invest in them, trust them – then they leave. Or you give autonomy and they drop the ball. It feels like betrayal. Pivotal People hear this often.
The solution isn’t harder rules or more control. It’s building a place where people see a future. Not everyone will stay. That’s reality. But the ones who do will carry the business forward if the environment supports them.
Wider NZ Context
Labour pressures are particularly acute in New Zealand. Migration policy, overseas demand and sector shortages affect everyone. Construction, healthcare and agriculture are hit hardest. Young workers entering the market often value purpose and flexibility more than security or loyalty.
Post-COVID, wellbeing matters more than ever. Employees expect support, not just salary. Those expectations aren’t going away. SMEs that adapt to this shift will retain talent. Those that don’t will keep losing it.
Measuring Progress
Pivotal People look for these signals when retention and performance improve:
Staff turnover stabilises or drops
Projects run smoother, with fewer late nights or errors
Team members take initiative instead of waiting for direction
More internal promotions, fewer outside hires
Morale improves – you can feel it in how people talk and show up
Mike saw the shift when apprentices started turning down overseas offers. Sarah noticed it when clients began praising the team, unprompted.
A Final Thought
Staff performance and retention are not one-time problems to solve. They’re ongoing realities to lead through. With the right structures, culture and clarity in place, fewer people leave. More people grow. The business becomes more stable and the burden becomes lighter. Pivotal People help owners create these conditions – not just to keep staff, but to unlock their best work.
