The idea of a four-day working week might previously have seemed like a dream, but one Kiwi company is looking to make it a reality. Perpetual Guardian recently concluded an eight-week trial of the shortened working week, with managing director Andrew Barnes, claiming it was a “massive success”, adding that he wants it to become a permanent fixture.

The trial began in March, with employees enjoying ongoing three-day weekends with no sacrifice to their salaries or adjustment to their normal daily working hours. To measure the results of the trial, Barnes invited academic researchers to observe the impact on staff productivity. The results found that staff stress levels dropped by 7%, work life balance improved by over 20%, and team engagement levels improved. The results disproved original suspicions that staff may become more stressed as they worked to achieve the same objectives in a shortened timeframe.

Christine Brotherton, head of people and capability for Perpetual Guardian, added that the trial allowed staff to bring a similar level of focus to home life as they did to work. With their extra day off, staff could complete their “life admin” tasks and were able to better engage in hobbies, meaning that they were often more energised upon their return to work.

Despite the idea being novel in New Zealand, similar trials conducted overseas generated comparable results. In Sweden, working hours for nurses were reduced to six-hour days with results showing increased job satisfaction and a drop in sick leave. Amazon is also trialling a reduced working week for a selection of employees. The employees working a 30-hour week are entitled to receive the same benefits as full-time employees, but only earn 75% of their salary.

Alternatively, an increasing number of companies have looked to introduce “compressed” working weeks. A “compressed” working week still requires employees to work 40 hours per week, but over just four days. Advocates of the “compressed” week argue that productivity is increased, while simultaneously decreasing overhead costs. However, critics consider that increasing the number of hours worked in a day could increase health and safety concerns. With a growing number of cases coming before the courts citing overwork as a cause of adverse health effects, increasing the number of hours worked per day may be met with resistance. 

Employers looking to implement any changes will also need to consider the legal ramifications. Current employment law is very much focussed on the number of hours worked, hence for a 4 day week or compressed hours to become common place, legislation would need to change accordingly. Logistical issues are also likely to provide challenges in terms of when staff might choose to take their day off, particularly in manufacturing and service sectors.

While the results of the trial have no doubt got employees excited by the idea that a four-day week could become a reality, it is likely five-day weeks will persist until the legal fish hooks can be addressed. In the meantime, we can all look forward to our next long weekend in October.

There’s an old truism that you have to keep telling people they are doing the right thing when they buy from you and in today’s noisy marketplace they like to know more than just what you do. They want to know who you are, what you stand for and why you matter in their lives.

Successful companies and brands consistently, clearly and appealingly articulate in every word and deed their vision, values, strategy, culture and personality to influence and engage people’s hearts and minds and earn trust, deliver results and build a reputation as an asset.

Can you do that? Or is your business story locked inside you or scattered in disconnected pieces across different social, print and digital media? Are you unsure about what to say and how to say it your way and in your own voice?  You would be in very good company as a leader if you answered yes and recognise that you are struggling to communicate effectively and inspirationally to galvanise action.

There’s a solution. You need a coach to work alongside you – one on one or with your team – to build your communication skills – and confidence – and find the voice, hooks and memorable, meaningful, relevant stories to influence and guide what people experience, think, feel and believe about your brand – and the company behind the brand.

Here are some of the skills you and your communications coach can work on:

• Expressing your vision and values with a great story and messages that can be told again and again wherever people meet your brand and company
• Articulating your strategy, goals and ideas in a simple, appealing way
• Finding your voice and tapping into personal stories and experiences that shape your brand
• Telling stories and sharing experiences that inspire and motivate customers and employees to take action and give them reasons to trust you
• Speaking with confidence in formal and informal situations to excite discovery and build awareness and recognition of your company and brand offer
• Building high performing teams that share the vision, live the culture, know what’s expected and are motivated to deliver the goals
• Strengthening relationships with your colleagues, customers, communities of influencers
• Projecting the qualities and capabilities that distinguish you as a leader – or prospective leader and influencer
• Listening, feedback and conversation skills
• Having confidence to be your whole and real self.

To get advice & help email susan@robinson-derus.co.nz to see how we can custom-make a coaching programme that transforms you into a great business storyteller able to bring to life your company, brand and your own personal brand. You can read Susan’s story at www.robinson-derus.co.nz

When an asset, such as a bach or a boat, is used both privately and to generate income, prescriptive rules exist within the Income Tax Act that determine the extent to which a tax deduction is available.

Expenses broadly fall into three categories: fully deductible, non-deductible and apportioned. An expense is fully deductible if it is incurred solely to generate taxable income. Non-deductible expenses arise directly from any private use of the asset. Finally, apportioned expenses arise when an expense relates to both income-earning and private use of the asset, with a tax deduction available based on the number of days the asset is used to derive income, as a proportion of the total number of days the asset is used for either purpose.

Private use is defined as the owner’s personal or family use of the asset, and any other person who pays less than 80% of the market value for the use of the asset. For example, if a bach is rented to your sister for full market rent and a friend for 70% of the market rent, both instances qualify as private use and the income is exempt from tax. Similarly, expenses relating to this use of the asset are non-deductible.

Keeping a bach in mind, an example of a fully deductible expense would be advertising costs. Conversely, if the owner of the bach purchased a kayak that was unavailable for tenant’s use, the cost would be non-deductible. While general holding costs such as rates, general repairs and insurance are apportioned based on the proportion of days the asset is used to derive income.

If a net loss arises from the asset, that loss is typically ring-fenced and cannot be offset against other income. Instead, the loss must be transferred forward and offset against future profits from the asset.

In addition to Income Tax, there are separate GST rules that apply to mixed-used assets. GST recovery is broadly based on the anticipated split of private / income use. However, unlike the income tax rules summarised above, GST can be recovered on use by the owners and their family, providing market value is paid for use of the asset. Hence, different recovery percentages can arise between income tax versus GST.

Before you consider putting the bach up for rent, it is worth checking whether the mixed use asset rules will apply and what records you need to keep to ensure you can apply the rules correctly.

You may have heard the term ‘internet of things’ (IoT) bandied about recently, but what exactly is it?

IoT is the name given to interconnected devices that can communicate with each other via the internet, through the sending and receiving of data. The IoT is rapidly changing the world in which we live, albeit somewhat behind the scenes. It affects how we work, communicate, drive, make plans, shop and even how our homes are run.

The IoT works through sensors embedded in various objects that transmit signals to an online platform. Sensors are in almost everything. Location sensors in your smartphone, car, tablet or watch mean someone can locate you with ease and this generates valuable data about how things work and work together. These sensors are taking information from the world and uploading it to the internet, possibly without us noticing or without our permission. For example, after visiting a website, adverts for that same website suddenly pop up on your Facebook news feed. And when you arrive in a new location your smartphone preferences are automatically updated. That’s the IoT.

Although we are aware of this with smartphones and laptops, an increasing number of everyday devices can connect to the internet, such as air conditioning, lighting and even fridges. It is estimated that by 2020 50 billion objects will be connected to the internet. With a global population of 7.6 billion that equates to 6.6 objects connected to the internet per person. 328 million new devices are being connected each month, so in the time you’ve taken to read this paragraph, an estimated 4,000 new devices will have been connected to the internet.

A common complaint is that we are now inundated with so much data that we don’t know what to do with it or what is important. IoT allows companies to capture data to learn more about customer’s behaviours and model services to fit their needs. Real time data collection takes the guesswork away and allows businesses to tailor their services to deliver customers something of real value.

As an example, the car industry increasingly exploits IoT to their advantage. In many new vehicles, cars can be connected to the manufacturer’s server. Every time the car is turned on, an alert is sent to the server which can perform an analysis of the data and send text alerts to the driver if something is wrong with the engine. This can detail how serious the fault is, the closest dealer to get it fixed, directions to get there, a discount voucher for the service, and an indication of whether the service is under warranty or not. An additional advantage to the manufacturer is that they can quickly identify any trends with faults. IoT allows them to easily identify cars made at the same factory, or with common parts, and send warnings to drivers of other vehicles that may be affected, much like Subaru and Mazda did last year. This leads to streamlined inventory management for the dealer, a better and safer car, and means the driver can get back on the road faster.

It is clear that IoT will impact all industries, and businesses need to be aware of it to ensure they aren’t left behind.

 

Traddies have been under the watchful eye of Inland Revenue (IRD) for the last few years since being identified as a cash-dominated industry in 2012. A media campaign has recently been launched to warn tradespeople that doing ‘cash jobs’ may comprise tax evasion, and that every cash job leaves a trail (or lack of a trail) that can be tracked by IRD.

Tradespeople risk substantial financial consequences if they are caught understating taxable income in their tax returns. Fines, penalties, use of money interest, and potential prosecution are all within the IRD’s power.

This begs the question, if a business identifies an error and the correct amount of tax has not been paid, what should be done? Contrary to some views, it does not comprise a windfall gain. If a business has underpaid its tax by more than $1,000 it must be disclosed to IRD. No business owner will take joy in having to pro-actively contact IRD, so here are a few points to keep in mind which will help smooth the process.

The best way to proceed is by making a written voluntary disclosure. With any re-assessment to increase a person’s tax liability, IRD will consider whether shortfall penalties should be charged. If charged, the amount is based on a percentage of the tax shortfall and the percentage varies depending on the nature of the error and the taxpayer’s culpability. The taxpayer should therefore use their written disclosure to clearly set out what the error is, how it arose and what actions have been taken to ensure it will not happen again. The disclosure provides an opportunity to explain the facts in the most favourable way possible. It reassures IRD of the taxpayers willingness to comply with the tax rules and demonstrates that the matter is being taken seriously.

The disclosure should also set out how the relevant tax return should be amended, with reference to the actual box numbers in the tax return. Broad statements regarding how the mistake should be fixed run the risk of IRD amending the return incorrectly, which will only give rise to more contact with IRD – the taxpayer should make it extremely easy for the person processing the change to get it right.

In most cases, if a voluntary disclosure is made no shortfall penalty should be charged.

In a small number of cases, the IRD may receive the disclosure and commence an investigation. IRD could potentially take the view that if one error was made, something else might be wrong. This reinforces the need to word the initial disclosure carefully to ensure there is an appearance of ‘there is nothing to see here, move along’.

If a voluntary disclosure is not made, and IRD find the error themselves the situation could be much worse. Shortfall penalties, that may not otherwise have been applied, could be charged and the IRD may undertake a more comprehensive investigation. So full disclosure at the earliest opportunity is always recommended. Being able to sleep at night is worth some temporary discomfort.