top of page

Why don't we let some business just fail?

I couldn’t agree more with a recent article written by Tony Alexander and published by titled:

“Kiwis' wages need to rapidly rise, even if 'inefficient' businesses crumble” (full article can be found here

The main thrust of his commentary was essentially directed at businesses paying low salaries as a means to staying in business -essentially squeezing staff to remain profitable! By doing this the businesses that “go under“ probably should fail and thus free up valuable labour to support the ever growing labour shortage. Short term pain for long term gain. Brutal you might say? When I stopped to think about this I found myself feeling somewhat disturbed at the thought of letting businesses fail as a means to potentially supply valuable labour to more profitable and successful sectors of the market. What is they don’t have the skills?, what if they don’t want those jobs?, etc. etc. The questions just keep rolling around in my mind and controlling costs is an important aspect of running any business, labour included And should therefore not be overlooked. I’m struggling at this point as, after all, I’ve made a living helping businesses do just so how does this make sense?

Then the penny dropped! Its time we stopped seeing people as liabilities and paid them what they are worth and what they need to remain loyal and focused on their work. We need to stop kidding ourselves that low labour rates are the key to competitive success and are the only way we can compete with China, India and others. I should know better than many as I have worked globally in some of the highest paying companies and countries and their secret is simple. Intimately know and value what your customers want and deliver it reliably on time. When you do that the price becomes less important and the focus becomes deepening the relationship and trust in achieving mutually beneficial outcomes. In this environment you can charge based more on what it’s really worth to them and not simply what it costs you plus a small margin. After all how many times have you seen high end restaurants, hair stylists, makeup artists, wine makers, etc. booked or sold out for months in advance and still people want to sample what they have to offer? I think Businesses need to stop being so humble, make what the customer values and stand by what you do! Of course, I could be wrong but I do know from experience that customers don’t just buy on price and especially in todays market where timeliness of delivery is more important than ever there is an opportunity for all parties to win just not at the cost of your staff wages!

86 views0 comments

Recent Posts

See All


Post: Blog2_Post
bottom of page