A perfect storm is brewing for small businesses with Auckland now at the red traffic light, according to business law experts.
Omicron will pose a risk to the financial survival of small businesses, with trading already slowing as customers are more reluctant to interface with others.
Auckland CBD last month was down 25% in pedestrian traffic compared to other years. Employees are also informing their employers that they are reluctant to interface with people which causes obstructions to productivity.
Chief executive officer of the Small Business Voice, Max Whitehead, says the variant will have a hard hitting impacts on businesses still recovering from the recent year of lockdowns.
“Employers are laden with debt, particularly Auckland SME’s who have had 4 months of lock down and required in law to pay their staff full wages while having no income”, he says.
The Government wage subsidy, while appreciated, unfortunately is only a proportion of the wages employers were forced by law to pay employees while locked down.
Businesses have accumulated significant debt in a desperate attempt to hold onto key staff during lockdown. Unfortunately these employees, now we are out of lockdown, are seeking jobs elsewhere wanting higher paying salaries. Therefore, employers are forced to increase wages in order to retain staff and keep their businesses running.
The increased likelihood of an employee contracting COVID or becoming a close contact and needing to isolate, will hit business hard again when Omicron saturates our communities. This will mean lost productivity, no income and wage costs continuing to increase debt even more.
Businesses are also lacking the goods and supplies they need to function as a business due to the deficit of delivery truck drivers and port delays caused by extra safety precautions implemented at Ports of Auckland Port and Tauranga Port. As a result of bureaucratic delays, they are already experiencing unnecessary congestion.
Whitehead says he advises businesses to plan ahead with caution suggesting Antigen COVID test kits be used daily (if available) to reduce the risk of a crippling outbreak in their business.
“Impose the most stringent of precautions”, he says
He further advises businesses to enforce high quality face mask use, limiting physical contact in the workplace and working remotely where possible.
“We predict 3 to 4 months of hell whereupon many businesses that are already struggling will be forced to stop trading, maybe permanently”.
Whitehead says he is seriously worried for New Zealand’s productive sector, hoping the damage imposed on them and our society will not be permanent and they are able to mentally and financially recover after the virus has passed.
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