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Business Operations Survey: 2008
Embargoed until 10:45am  –  23 April 2009
Commentary

Business Operations Survey

The Business Operations Survey collects information from a wide cross-section of New Zealand businesses with more than six employees. It aims to build a better understanding of a range of business practices and behaviours that may impact on business performance. The information is collected through a modular survey, that contains a static business operations module, an alternating ICT or Innovation module, and a contracted module which focused on business strategy and skills for 2008.

This is the first release of Business Operations Survey 2008 statistics covering the financial year ending August 2008. Further detailed information from the survey will be published on 29 April 2009.

Classification change

This is the first release of Business Operations Survey statistics on the basis of the Australian New Zealand Standard Industrial classification (ANSZIC) 2006. Further information can be found in the technical notes section of this release.

Business operations

Business activities

The Business Operations Survey collects information on a range of activities businesses may be involved in, such as exporting, tourism, investment in expansion, and overseas holdings or ownership.

Fifteen percent of businesses gained sales from exports in 2008. Larger businesses are more likely to have export sales than smaller businesses. Twenty-nine percent of larger businesses (100 or more employees) indicated they had received sales from exports, compared with only 12 percent of smaller businesses (6 to 19 employees).

Other activities measured also changed with size. Levels of overseas ownership of New Zealand businesses were higher in the large business size groups. Overseas holdings by New Zealand businesses also increased with business size.

An activity reported by a higher proportion of businesses (compared to the other business activities in the table) was investment in expansion. Twenty-two percent of businesses invested in expansion in 2008, with larger businesses again reporting higher rates of this activity.

The percentage of businesses with sales related to tourism, however, showed little change with business size. This may be explained by the mix of industries dependent on tourism. The industry reporting the highest rates of tourism sales was accommodation and food services, where 67 percent of businesses indicated they had sales related to tourism. This industry has a much higher proportion of smaller businesses than others, according to Statistics New Zealand's February 2008 Business Demography data.

The results for all other activities (such as export and tourism sales, and overseas ownership and holdings) were reported at similar rates in 2007 and 2008.

Graph, Business Activities by Firm Size.

Finance availability

Businesses may require additional finance, in order to support either current operations or expansion. In 2008, 29 percent of businesses reported they had requested debt finance. Use of equity finance was reported by 13 percent of businesses. These results were similar to those for 2007, except for rates of acceptance, which appears to show a slight decrease.

Graph, Finance Availability.

The 2008 data related to businesses' last financial year prior to August 2008. The 2009 Business Operations Survey will collect additional information on businesses' recent financing experiences in order to see if this has changed with the current economic climate.

Information and communications technology (ICT)

Internet connection types

The use of computers and the Internet can help businesses in many ways. Business use of computers and the Internet was high over all size groups and industries.

Eighty-nine percent of businesses use broadband Internet connections, and the most common type of broadband connection was DSL (digital subscriber line), used by 82 percent of all broadband users in 2008. This data echoes that from the Statistics New Zealand Internet Service Providers Survey: March 2008, which shows broadband Internet connections are now more common than other types of connections.

Graph, Broadband Access by Industry.

Levels of broadband connections were high across all industries, except the agriculture, forestry and fishing industry where only 68 percent of businesses use broadband. This was noticeably lower than all other industries.

Outcomes of information and communications technology

Businesses can adopt information and communications technologies (ICT) for a range of reasons, and can have many different outcomes from using these technologies. The most common outcome reported by businesses was improved responsiveness to customers (54 percent). This was followed by improved efficiency of workflow processes (49 percent) and better coordination of staff and business activities (48 percent).

Graph, Outcomes of Information and Communications Technology.

All the outcomes were reported by higher percentages of businesses in the larger size groups.

Internet activities

The Internet may be used for a number of business related purposes. The most common business use of the Internet was for finance (eg online banking, invoicing or making payments). Eighty-five percent of all businesses used the Internet for this purpose. This was followed by sharing information within the business (38 percent) and internal or external recruitment (36 percent).

Activities vary over the different industry groups. Sixty percent of businesses in the professional, scientific and technical services industry used the Internet for recruitment, whereas only 21 percent of agriculture, forestry and fishing businesses used the Internet for the same purpose.

Online interaction with government

Many businesses need to interact with government on many different levels, and the reasons for accessing local or central government websites are detailed below.
Sixty percent or more of businesses reported using the Internet to download forms, obtain information from government websites or via email, or make online payments.

Results differed over the industry groups. Forty-one percent of businesses in the accommodation and food services industry used the Internet to obtain information from government, compared to 89 percent of businesses in the professional, scientific and technical services industry.

Internet sales

Overall, 40 percent of businesses used the Internet to receive orders for goods or services. Of those with Internet sales, most indicated that Internet sales represented less than one tenth of their total dollar sales. Twenty-two percent reported Internet sales in this range with the remainder reporting smaller proportions of total sales from the Internet.

Results were similar across all size and industry groups.

Business strategy and skills

Reasons vacancies were hard to fill

Seventy-seven percent of all businesses had staff vacancies in the last financial year, and 47 percent found some vacancies hard to fill.

The most common reason businesses reported for vacancies being hard to fill was applicants lacking the desired attitude, motivation, or personality (34 percent). This was followed by applicants lacking work experience or the qualifications or skills required by the business (both with 29 percent).

Graph, Reasons Why Vacancies Were Hard to Fill.

The most prominent reasons reported by businesses were related to employees rather than the nature of the job. Those reasons that could be considered as job related, were all reported by under 10 percent of businesses.

Factors resulting in existing staff not having all the skills to do their job

The most common factor reported by businesses for existing staff not having all the skills to do their job was lack of experience, with 34 percent of all businesses indicating this as a factor. This was followed by staff lacking motivation (16 percent) and recruitment problems (14 percent).

Twenty-eight percent of businesses in the accommodation and food services industry indicated high staff turnover was a reason for staff not having all the skills to do their job, whereas only 12 percent of all businesses indicated the same reason.

Overall, 50 percent of businesses indicated that all their staff were fully skilled.

Skills existing staff most need to improve

The most common skill that businesses felt existing staff most needed to improve was customer service or sales skills (27 percent). This was followed by team working skills (22 percent) and oral communication (21 percent).

There is variation across the industry groups for particular skills. This may reflect both the type of skills required by different types of businesses and the mix of skills held by their current staff. Twenty-nine percent of wholesale trade businesses indicated that computer skills needed improvement, compared to 16 percent overall.

Graph, Skills Existing Staff Most Need to Improve.

Customer service skills showed the biggest variations across industries. Fifty-five percent of businesses in the accommodation and food services industry indicated this was a skill their existing staff needed to improve, compared to only seven percent in the agriculture, forestry and fishing industry. Requirements for managerial or supervisory skills improvements were more consistent, ranging between 10 and 27 percent.

For technical information contact:
Kathy Jackson
Wellington 04 931 4600
Email: info@stats.govt.nz

Next release ...

A full set of tables from the survey will be released on 29 April 2009.

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