Central Otago businesses are begging for staff and doing what they can to remain open. Aspen Bruce reports.

A Clyde eatery has changed its business model because of staffing shortages — a problem felt across the hospitality sector in Central Otago and the Upper Clutha.

Restaurants, cafes and bars were struggling with staffing pre› pandemic, but Covid›19 has made the problem more acute.

Paulina Corvalan, who has operated Paulina’s restaurant since 2016, announced on May 4 that due to a lack of staff the business was shifting to become a “relaxed and casual bar”.

Ms Corvalan said she needed to adjust to the new reality.

“It’s not possible to keep doing what we’re doing.”

Being understaffed has added pressure to the existing team, despite trying to recruit new employees.

Hiring had been difficult because people’s expectations about pay had shifted also.

People with only two years experience were expecting to be paid the same as someone who had been in the industry for 10 years, she said.

Draining the tap . . . Because of staffing shortages, owners like Paulina Corvalan have needed to adapt their businesses to stay afloat. PHOTO: PAULINA CORVALAN

In Wanaka, staffing shortages were felt before summer.

Last November, EASI NZ owner Cherilyn Walthew created a community solution to the problem. With only two weeks to prepare, Ms Walthew, alongside other Wanaka businesses, recruited seven workers for full seasonal placements and another 29 to take on casual seasonal shifts.

They trained willing workers with diverse skill sets to take on key roles in hospitality and retail.

This provided a quick solution for the summer, but Ms Walthew was concerned as winter fast approached.

‘‘Businesses are stretched in their cash flows. They can’t afford to financially feed back into another recruitment process. What we need is funding to enable us to help support businesses in a way that addresses their needs, right now.’’

On May 4, Alchemy owner Claire Ellis made the tough decision to close for a week.

In accordance with the Holiday Act 2003, that process required Ms Ellis to consult with staff two weeks prior to the closedown.

She said there was a light at the end of the tunnel with international tourism opening up, but she worried about customers arriving before potential staff.

In the meantime, she had shifted from ‘‘working on the business to working in the business,’’ asking her staff where they needed her most.

Before the one-week closedown, Ms Ellis trained in the kitchen.

Even with owners returning to work in roles within the business, the costs on business owners were significant and accumulating. External factors were contributing to this economic crunch on small business owners. In June 2021, sick leave was extended from five days to 10. Minimum wages increased by $1.20 on April 1, 2022 . According to Stats NZ, by April 20 this year, the inflation rate had risen to 6.9%, a 1% increase since the 5.9% recorded in January 26, 2022.

At Fusee Rouge Cafe in Cromwell, manager Alaskia Hansen said most of her staff were local, so they were weathering national staff shortages well.

‘‘When people have Covid is when we are struggling,’’ she said.

Due to supply chain shortages on products such as coffee beans from Brazil, purchasing costs had risen too.

Waitaki MP Jacqui Dean said this took a toll on local businesses.

‘‘The problem with a worker shortage is that it has a massive impact on individual businesses but it also threatens growth, which is what we desperately need.’’

To support businesses, the Government launched its Kick-start Fund on March 17.

Many retail, hospitality and cleaning businesses had not been eligible for the funding, because they did not meet the conditions of experiencing a 50% loss in revenue.

Queenstown Lakes District Council (QLDC) economic development manager Peter Harris empathised with owners who did not meet the criteria.

He said QLDC had tried to extend the criteria of eligibility, but it had been difficult.

‘‘The Government decides, but the funding also extends across four other districts, so to change it would affect them too.’’

A December 2021 report on the region’s business labour market showed 56% of businesses had experienced difficulties in finding skilled or specialist staff.

The report also revealed 24% of businesses had reduced their hours since September 2021.

As an ongoing resource for businesses, Mr Harris referred owners to Business South for additional support.