What to do when you employ the whĀnau - Being a successful MĀori employer in the 21st century

Ani Bennett, September 2015

Part 1:

Some of the future challenges for Māori Businesses as employers - 2030 the baby boomers retire, huge world-wide demand for skilled workers, labour planning will become more important than financial planning, Māori will make up around 20% of the working age population in NZ, those Māori businesses that nurture their employees will be the ones that flourish.

Why should Māori businesses make being successful employers a key priority? There are our values - whānaungatanga, manaaki tangata, whakatipu ai i te whānau. There is the business imperative - you generally can't run a successful and profitable business without good employees. But even more urgent, is that a huge shift is coming in the worldwide labour market and if Māori don't retain and grow their employees, then they won't survive.

Our people are our greatest asset

"The greatest asset Māori have are the approximately 500,000 Māori people" - Professor Mason Durie.

In 1999 I attended a talk by Professor Mason Durie on Māori economic development.

He commented that the way Māori focus on land, "anyone would think that we owned vast estates". Yet Māori only own approx. 5% of the land base in Aotearoa.

He talked of building capacity in our own people. Where do we start? In our own whānau. And for Māori business, in our own organisations.

In a Herald article in July 2013, Jamie Tuuta (CEO of the Māori Trustee/Te Tumu Paeroa) describes the Māori economy as "a developing economy within a developed economy". He referred to the example of Māori rural business changing to more active management of their land and assets.

"Driving the change has been an acceptance that human capital is the most important economic asset owned by Māori."

The other question is - why should Māori care about employment law?

Because those Māori organisations that truly care for their people will be the most successful. The world is aging and the baby-boomers will soon retire. Most experts are forecasting a labour crisis by 2030. In the near future, labour planning will be more important than financial planning.

The future for the Māori economy and HR

By 2026 Māori are projected to comprise nearly one fifth (20%) of the younger working aged population (15 - 29 years).

According to Rainer Strack (international HR expert, Senior Partner and Managing Director at the Boston Consulting Group):

"By 2030, we will face a global workforce crisis in most of our largest economies."

The babyboomers will retire over the next 15 years. This will cause a significant shortage of workers in the world's largest economies - including the US, Europe, Australia, even the ëemerging superpowers' of China, Brazil and India.

For example if Germany wants to continue growing at its current rate, by 2030 there will be a shortfall of 8 million workers. 20% of its workforce. Germany has recognised its need to retain and attract younger workers - it has just made University education free, including for foreign students.

"In reality, the situation will be even more challenging. There will be higher shortfalls for high-skilled people and a partial surplus for low-skilled workers. So on top of an overall labour shortage, we will face a big skill mismatch in the future, and this means huge challenges in terms of education, qualification, upskilling for governments and companies."

Technology will replace a lot of jobs, regular jobsÖ but we will also see a lot of new jobs and new skills on the horizon, and that means technology will worsen our overall skill mismatch".

The automation of jobs (e.g. robots and big data) is unlikely to solve this problem. Take the example of the automotive industry where robots have taken 40% of jobs that people used to perform. But now cars are more sophisticated with computers and electronics and new roles have been created. For example, the "cognitive systems engineer" to optimize the interaction between the driver and electronic system. 30 years ago no one imagined such a job would exist. In fact, the overall numbers of people involved in manufacturing vehicles has only changed slightly, despite robots and automation.

So there will be greater competition worldwide for skilled workers. Rainer's group did a global survey among more than 200,000 job seekers from 189 countries.

"Now, what are the job preferences of these 200,000 people? So, what are they looking for? Out of a list of 26 topics, salary is only number eight. The top four topics are all around culture. Number four, having a great relationship with the boss; three, enjoying a great work-life balance; two, having a great relationship with colleagues; and the top priority worldwide - is being appreciated for your work.

So, do I get a thank you? Not only once a year with the annual bonus payment, but every day. And now, our global workforce crisis becomes very personal. People are looking for recognition. Aren't we all looking for recognition in our jobs?

We will face a global workforce crisis which consists of an overall labour shortage plus a huge skill mismatch, plus a big cultural challenge. (Rainer Strack - Ted talk - The workforce crisis of 2030 and how to start solving it now - Dec 2014)

And this global workforce crisis is approaching very fast. Right now, we are just at the turning point. So what can we, what can companies do? Every company, but also every country, needs a people strategy, and to act on it immediately, and such a people strategy consists of four parts.

Number one, a plan for how to forecast supply and demand for different jobs and different skills. Workforce planning will become more important than financial planning.

Two, a plan for how to attract great people: generation Y, women, but also retirees.

Three, a plan for how to educate and upskill them. There's a huge upskilling challenge ahead of us.

And four, for how to retain the best people, or in other words, how to realize an appreciation and relationship culture.

However, one crucial underlying factor is to change our attitudes. Employees are resources, are assets, not costs, not head counts, not machines.

Strack concluded that the current workforce trend is not sustainable. Companies and governments need to forecast which jobs need to be filled in the next 15 years; how they will bring more millennials, women, and retirees into high-skilled jobs; and how they will adapt their corporate cultures to become a global destination for these employees.

As Justice Joe Williams is fond of saying "When Māori do well, all of New Zealand does well. Māori aren't the problem in this country, we're the solution."

And that will become more and more apparent as Māori become a significant percentage of the workforce and greater shareholders of NZ Inc. The Māori economy will only grow. Designing our HR systems so they fit us and making employment law work in a Māori context is part of that challenge.

Part 2:

How are Māori businesses making employment law work for them in a Māori way? How to make the law fit with tikanga - what does that really mean?

Four Case studies of innovative successful Māori businesses. Te iti me te Rahi.

1. Manawa Honey - the small traditional innovator

Taking it in stages to build capacity
Snapshot:

• 7 employees - fixed term researcher, 2 office support, 1 CEO, 2 full-time bee keepers, 1 seasonal casual bee-keeper.
• Annual turnover - around $450,00 - $500,000
• Value of the asset base - @$500,000 (hives & gear) + Māori land (can't be sold, but worth @$1 million).
  

Operate under tarps. Trustees loan their sheds for use. Currently two of the trustees are building a production shed that they'll share between Manawa and their farm.

The business has some loans, but not huge. All profits are re-invested in the business - mostly to purchase more hives.

Making employment law work for them in a Māori way

2. Mitai Holdings Limited - Mitai Māori Village and Snooze cubes

Traditional knowledge and tourism

Rangatira and whānau leadership style

• 104 employees - 200 during peak season
• Annual turnover - around $3.5 to 4.5 million
• Value of the asset base - @$2 million.

3. Te Manu Toroa Charitable Trust - the Hauora

Providing health care to the poor, with a focus on Māori

Māori values with formal ER systems

• 100 workers (@75 employees and @25 contractors)
• Annual turnover/sales - circa $6 million
• Annual profits - circa $160,000 in 2013 to ($30,000) loss in 2014
• Value of the asset base - circa $1.3 million.
• 5 sites - Te Puke - GP clinic, Papamoa - GP and adolescent/child dental, Tauranga (Cameron Road) - mental health, Tauranga (Garden Place) - tamariki ora, teen parenting, hub for young mums, Tauranga (Courtney Road) - GP Clinic & community services/nurses & head office.

Tā rātou korero

One New Zealand's first Māori hauora/health providers. It's first incarnation was as "Western Iwi Health", established in 1997 to provide a Kaupapa Model of Health Care to Māori in the Tauranga, Mount Maunganui, Katikati and Te Puke areas, known as the Western Bay of Plenty (Mai Ngā Kuri ā Wharei ki te Waitaha nui ā Hei).

Evaluation from a Feasibility Study demonstrated alarming statistics throughout the rohe. Provision of GP Services took first precedence with low cost consultation costs and pharmacy costs. Establishing the GP clinics opened the doors for our people. They were able to provide easy accessibility, offer affordability, and make available a culturally appropriate setting.

The GP Surgeries are placed throughout the district to enable our people ease of access. In conjunction with offering the GP Service's, they formed a partnership with Contracted Pharmacies in order to reduce prescription costs.

The enormous scope of our people's needs provided for developments in other areas. Services expanded to Tamariki and Rangatahi Dental Services, Mental Health Services, Health Promotion, Tamariki Ora, Whānau Care and Support, Facilitation, Mobile Māori Disease State Management Nursing Service, Smoking Cessation, Asthma Education and Kaupapa Māori Advanced Rural Nurses, who are on the pathway to Nurse Practitioner status.

Development and growth became evident to their Kaumatua. A name change befitting the people and the rohe they serve unfolded. Kaumatua from the 5 local Iwi sanctioned them with a new name - Te Manu Toroa (the albatross which glides the ocean).

It has an enrolled patient and client population of over 10,000.They are 100% funded by government contracts or development funds.

Making employment law work for them in a Māori way

TMT is a large organisation. They employ Māori and non-Māori. There are rigorous government requirements for compliance with laws and regulations re: the various health contracts they deliver. They contract a part-time HR advisor/Employment lawyer, employ a full-time quality controller and the Senior Administration Team Manager and CEO work with the HR advisor to address any employment issues.

They have employment agreements, extensive HR policies on the intranet, health & safety policies etc. Because many of the staff are union members (Nurses, GPs, other medical and admin staff), TMT also contracts an employment advisor to assist with the collective employment agreement negotiations (for MECA's - multiple employer collective agreements).

On the ground - it's still about whānau and relationships. TMT are focused on giving people second chances, re-deploying where they can and training people. But due to exposure to PG's in the past, and regular auditing due to government requirements for their funding contracts, they've had to tighten up their employment practices so they comply with employment law. Having the safety of that legal protection then allows them to be more flexible (and aroha) with staff.

They don't pay large salaries or wages - margins are tight with government contracts. Belief in the kaupapa is a major motivator for people working for TMT.

• Whānaungatanga - we will endeavour to be welcoming, embracing, considerate and show respect towards everyone.
• Kotahitanga - we will maintain unity and purpose in all that we do.
• Manaakitanga - we will show respect, support and care in everything that we do.
• Tikanga/Kawa - we will provide leadership to guide all behaviour and action within the organisation
• Wairuatanga - we will provide and acknowledge the spiritual well-being of individuals
• Tangata Whenua - we will respect and be considerate to tangata whenua customs and beliefs
• Ngākau Pono - we will be loyal and committed to our clients' needs to ensure our clients live a healthy lifestyle.

When there are performance or disciplinary issues discussions about these values are usually part of the conversation. E.g. refusing to say good morning to your manager and throwing your stuff around in the office - breaches whanangatanga and manaakitanga, and can result in a written warning.

Adhering to these values is not formally tied to remuneration and advancement.

There is Karakia every morning at 8.30am. There is a Cultural Support person (Pou Tikanga) who provides teaching on the rohe, tikanga, basic reo, kapahaka, waiata. In Senior Management there is a "Māori Community Relations" role. This is a Kaumatua (and former CEO of TMT) who takes care of TMT's relationships with other Māori organisations, hapū, other Iwi, and strategic relationships (e.g. dealings with developers). "The hard stuff that others may not see".

Every staff member has a Whakatau (when they start at TMT) and Poroporoaki (when they leave).

4. Tainui Group Holdings - the Corporate

• Employees - 35-40 FTE (@16 Māori )
• Annual turnover - revenue is circa $82 million
• Annual profits - NPAT (net profit after tax) is circa $33 million
• Value of the asset base - net assets are circa $525 million
• What kind of business is TGH involved in? - intergenerational investment, property, equities, primary sector, direct investments, ground leases/fixed income.

TGH's role is to manage the commercial assets of the Waikato-Tainui people. It was established in 1998 as the next step from the Waikato-Tainui Raupatu Claims Settlement. In 2001 there was a strategic review that identified that the commercial and tribal activities should be divided. In 2002, TGH was restructured to become a single commercial operational arm. A new management team was put in place.

TGH is the intergenerational investor for Waikato-Tainui. It has recently embarked on a diversification strategy which includes divesting some property assets with a view to increasing investment in equities, direct investments, and the primary sector.

With this income it aims to provide consistent, long-term dividends to current and future generations of Waikato-Tainui. The dividends are used for charitable purposes by its shareholder to invest in education, welfare, health, social and cultural facilities and activities, for the benefit of Waikato-Tainui members.

All income and dividends are reinvested in New Zealand.

Making employment law work for them in a Māori way

Corporate culture focused on values

In the last year TGH has gone through a series of discussions among management and staff about TGH's values and integration within the Waikato-Tainui blueprint known as Whakatupuranga 2050. This includes consideration of what values are useful for TGH, are they meaningful, and how to tie those values to competencies required to achieve success.

The Board and management sought growth in the culture of TGH.

TGH was established to create wealth for the Iwi and it's doing that. But now the conversation is about ensuring commercial growth along with connecting TGH with their people and delivering meaningful wealth and wellbeing opportunities for whānau members.

This also translates to how kaupapa Māori values are expressed in a practical way through operational, and potentially investment and distribution decisions. TGH wants to be an organisation where both business standards (legal, accounting, investment etc.) and kaupapa Māori are fundamental to their success as a Māori organisation.

So in 2014, TGH started a series of meetings with staff and managers to discuss and define their values. They had 7 "values" inherited through Whakatupuranga 2050, but it was prudent to narrow these down to 3 or 4 alone. The conversation was about what values were important and how to achieve them. Crucially the CEO supported this initiative.

Some staff resisted moving in this direction. There was 35% turnover over that year. Some was natural movement for career opportunities, others left because they didn't like the changes.

The vision: Growing the economic prosperity of Waikato-Tainui.

To achieve that TGH has landed on 4 values. Created by the team and agreed by the team.

• Mahitahi - one team
• Kaitiakitanga - guardianship
• Manaakitanga - care in our work
• Pono me te tika - act with integrity.

Under that sit 9 competencies required to achieve those values - Commercial Acumen, Decision Making, Innovation, Leadership and Coaching, Relationship Building, Technical and Professional Expertise, Honesty and Integrity, Cultural Understanding.

Most crucially, meeting those competencies and acting in line with those values are tied into staff performance appraisals -i.e. remuneration and promotion.

• Do you work well in the team?
• Can I trust you; do you do what you say you are going to do?
• Do you show guardianship of TGH's assets (e.g. debtor levels under control)
• Do you take care in your work? Is it a high standard?

Staff can also design their professional development plans with their managers around their competencies. E.g. pick a competency a year - e.g. cultural understanding. There are workbooks, sort cards, performance appraisal software, to help define their gaps, development choices and ways to measure their development.

It's also a way to communicate how TGH sees things and what they are doing. E.g. we're ensuring debtor levels are managed because we are a kaitiaki of Waikato-Tainui's assets. Communicating their values with their investors, tenants, business partners - as well as staff.

The evolving performance review process continued in July 2015. The key challenge is to have managers be consistent in their measurement of how staff are achieving the values and competencies. To discuss the values, to role model the behaviour and encourage staff to challenge each other when not living by the values.

Getting the fundamentals right

Growing pains

Many Māori organisations are still growing and dealing with growing pains, which include dealing with personal grievances, learning how to give effective warnings and how to performance manage staff. This is where the "rubber meets the road" for Māori employers. And if they are employing whānau who have not had much (or any) formal education, been out of work for long periods, come from communities with inter-generational benefit dependency, then this involves training people to work again. "Aroha ki te tangata", lots of patience, but also strong leadership and consequences if work rules (ngā tikanga o te pakihi) aren't followed.

Businesses don't just need to know about tax, ACC, company law, health and safety. HR and employment law are a key part of a healthy business. If you don't get that right, there are real financial consequences. Let alone the emotional pain. And in my experience, Māori organisations tend to pay out more when it comes to settling PGs.

Added extra - off topic: what actually motivates people at work?

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