• Home
• Regulation
• Regulatory Policy
• Compliance Costs
• BCC Perceptions Survey
• Perceptions of NZ Firms
• Section 5: Costs vs Benefits

• Regulatory Policy

• Compliance Costs

• BCC Perceptions Survey

• BCC Survey Summary
• Perceptions of NZ Firms
• Media Statements

• Responses by Survey Sub-Samples
  • Firm Size
  • Export Involvement
  • Firm Stage
  • Growth Intentions
  • Industry Type
• Exploring the Perceptions
• Summary

In the third section of the survey the respondents' perceptions of the factors that were used in the previous section were also the basis for the questions on the costs versus the benefits of compliance. Respondents were told "may I run through those aspects of the business environment quickly again. This time would you answer from the viewpoint of whether you feel that in the bigger picture your firm or industry is getting more or less benefit from it, than the effort you're putting in. Say A if you feel the benefits you get are greater than the effort and cost. Say B if you feel the time effort and cost just about balance out the benefits you get. Say C if you feel the time effort and costs outweigh the benefits you get".

Figure 19: Costs versus Benefits

→ Large version of "Figure 19: Costs versus Benefits"

Figure 19 shows that in relation to most factors, the respondents indicated that the time, effort and cost they put in just about balances out the benefits that they receive. The exceptions were factor B (the regulations that apply to releasing a person who no longer suits the business - referred to in Figure 19 as "firing") and J (the ACC insurance arrangements as they relate to the firm).

This figure also shows that in terms of a number of factors some respondents felt that the benefits they receive are greater than the effort and cost. However, there was no single factor where this opinion was held by the majority of respondents. It should also be noted that there were high numbers of "don't know" responses to this question (see for example, the responses to "getting consents to use land, water or air"), despite the fact that there was also a "not applicable" option. This raised questions about the extent to which respondents understood their responsibilities in relation to some legislation.

As Figure 19 shows, factors that were seen as providing more benefits than effort and costs were factors E (the guidelines for firms trading fairly in relation to each others products and services, and in relation to customers - referred to in Figure 19 as "fair trading"), A (the regulations that need to be taken into account when a new person is being hired - referred to in Figure 19 as "hiring"), I (the arrangements the firm needs to have for health and safety of employees - referred to in Figure 19 as "health and safety").

The factors that were seen as taking more time and effort than the benefit provided were factors B (the regulations that apply to the process of releasing a person who no longer suits the business - referred to in Figure 19 as "firing"), J (the ACC insurance arrangements as it relates to the firm), L (providing a range of employment and other data on the firm to government agencies - referred to in Figure 19 as "govt stats").

Responses by Survey Sub-Samples

As with the previous section, it is necessary to take a more detailed look at the data to understand the issues that are being signalled by the respondents. This shows that the groups had distinctly different views on the relative diversionary potential of the various factors. In the following sections the factors that were most commonly nominated are examined in detail. The data is also analysed in terms of the five groups, and using two techniques: 1) by ranking the issues in order, and 2) by indexing (explained later in the report).

Firm Size

The issues of most concern to firms of different size groups are ranked and displayed in Figure 20.¹⁹

Figure 20: Ranking of Factors that Are Perceived to Have Higher Costs than Benefits (Firm Size)

Indexing the data showed that respondents whose firms employ 6-10 FTEs (and those that employ more than 11 FTEs) are over-represented amongst the 43.3% of respondents who answered that the time, effort and cost of the arrangements for releasing an employee outweighs the benefits, while firms that do not employ and those employing 2-5 FTEs were under-represented amongst those giving this answer. Respondents whose firms employ 2-5 FTEs are slightly over-represented amongst the 39.0% of respondents who described the time, effort and cost of the ACC insurance arrangements as they relate to the firm as outweighing the benefits, while firms that do not employ were under-represented amongst those giving this answer. Respondents whose firms employ more than 11 FTEs are over-represented amongst the 37.1% of respondents who answered that the time, effort and cost of providing a range of employment and other data on the firm to government agencies outweighs the benefits, while firms that do not employ were under-represented amongst those giving this answer.

Export Involvement

The issues of most concern to those that export (cf. those that are not currently exporting but which anticipate doing so) are ranked and displayed in Figure 21.

Indexing the data showed that respondents whose firms are not currently exporting are over-represented amongst the 43.3% of respondents who answered that the time, effort and cost of the arrangements for releasing an employee outweighs the benefits, while firms that are not exporting (and do not intend to) were under-represented amongst those giving this answer. Respondents whose firms are not currently exporting are marginally over-represented amongst the 39.0% of respondents who described the time, effort and cost of the ACC insurance arrangements as they relate to the firm as outweighing the benefits. Respondents whose firms are not currently exporting are over-represented amongst the 37.1% of respondents who answered that the time, effort and cost of providing a range of employment and other data on the firm to government agencies outweighs the benefits, while firms that are not currently exporting and those that are not planning to export were under-represented amongst those giving this answer.

Figure 21: Ranking of Factors that Are Perceived to Have Higher Costs than Benefits (Export Involvement)

Firm Stage

The issues of most concern to firms of different stages are ranked and displayed in Figure 22.

Figure 22: Ranking of Factors that Are Perceived to Have Higher Costs than Benefits (Firm Stage)

Indexing the data showed that respondents whose firms can be described as "mature" are over-represented amongst the 43.3% of respondents who answered that the time, effort and cost of the arrangements for releasing an employee outweighs the benefits, while firms that are "new" and those that are neither "mature" nor "new" were under-represented amongst those giving this answer. Respondents whose firms can be described as "mature" are over-represented amongst the 39.0% of respondents who described the time, effort and cost of the ACC insurance arrangements as they relate to the firm as outweighing the benefits, while firms that are "new" and those that are neither "mature" nor "new" were under-represented amongst those giving this answer. Respondents whose firms can be described as "mature" are over-represented amongst the 37.1% of respondents who answered that the time, effort and cost of providing a range of employment and other data on the firm to government agencies outweighs the benefits, while firms that are "new" and those that are neither "mature" nor "new" were under-represented amongst those giving this answer.

Growth Intentions

The issues of most concern to those with different growth intentions are ranked and displayed in Figure 23.

Indexing the data showed that respondents whose firms are contracting are over-represented amongst the 43.3% of respondents who answered that the time, effort and cost of the arrangements for releasing an employee outweighs the benefits. There is no significant between those firms that report growth, contraction, or consolidation in relation to the ACC insurance arrangements. Nor was there a significant between those firms that report growth, contraction, or consolidation in relation to "providing a range of employment and other data on the firm to government agencies".

Figure 23: Ranking of Factors that Are Perceived to Have Higher Costs than Benefits (Growth Intentions)

Industry Type

The issues of most concern to those involved in different industries are ranked and displayed in Figure 24.

Figure 24: Ranking of Factors that Are Perceived to Have Higher Costs than Benefits (Industry Type)

Indexing the data showed that respondents whose firms are from the non-food, primary sectors and the wholesale, retail and manufacturing trades are over-represented amongst the 43.3% of respondents who answered that the "time, effort and cost of the arrangements for releasing an employee" outweighs the benefits, while firms from the software and business service industry, tourism and the food sectors were under-represented amongst those giving this answer. Respondents whose firms from the primary, non-food and food sectors are over-represented amongst the 39.0% of respondents who described the "time, effort and cost of the ACC insurance arrangements as they relate to the firm" as outweighing the benefits, while firms from the software and business service industry and the tourism sector were under-represented amongst those giving this answer. Respondents whose firms are from the software and business service industry and the primary sector are over-represented amongst the 37.1% of respondents who answered that the "time, effort and cost of providing a range of employment and other data on the firm to government agencies" outweighs the benefits, while firms from the food and tourism sectors were under-represented amongst those giving this answer.

Exploring the Perceptions

Respondents who commented that the time, cost and effort outweighed the benefit were asked to enlarge upon these comments. This generated a large number of comments (some 1100) and while it is beyond the scope of this report to deal with them, it is worth noting that some issues generated far more comments than others. While counting the number of comments is a simplistic approach (see Figure 25), it does support other evidence gained in this survey and elsewhere; that compliance is an issue that generates intense feeling.

Figure 25: Numbers of Comments on Different Factors

Summary

In relation to costs versus benefits, the issues of most concern (i.e. where the 490 respondents perceived that the cost and time outweighed the benefits) were:

• The regulations that apply to the process of releasing a person who no longer suits the business (43% said that the cost and time outweighed the benefit, compared to 13% who felt that the benefit was greater than the cost)
• The ACC insurance arrangements as it relates to the firm (39% said that the cost and time outweighed the benefit, compared to 15% who felt that the benefit was greater than the cost)
• Providing a range of employment and other data on the firm to government agencies (37% said that the cost and time outweighed the benefit), compared to 13% who felt that the benefit was greater than the cost)

The issues of least concern (i.e. where respondents perceived that the benefit outweighed the cost and time involved) were:

• The guidelines for firms trading fairly in relation to each others products and services, and in relation to customers (27% said that the benefit was greater than the cost, compared to 9% who felt that the cost and time outweighed the benefit).
• The regulations that need to be taken into account when a new person is being hired (27% said that the benefit was greater than the cost, compared to 16% who felt that the cost and time outweighed the benefit).
• The arrangements expected of the firm in regard to clean air, water and environment protection (21% said that the benefit was greater than the cost, compared to 14% who felt that the cost and time outweighed the benefit).

Again, these perceptions were not identical across the different groups that were surveyed. The key differences between the groups in relation to the top three factors shows that:

• Respondents who described the time, effort and cost of "releasing an employee" as outweighing the benefits were most likely to be from firms that: employ 6-10 FTEs and employ more than 11 FTEs, are not currently exporting, are "mature", are contracting and are from the non-food, primary sectors and the wholesale, retail and manufacturing trades.
• Respondents who described the time, effort and cost of "ACC insurance arrangements" as outweighing the benefits were most likely to be from firms that: employ 2-5 FTEs, are not currently exporting, are "mature" and from the primary, non-food and food sectors (there was no difference in terms of firm growth intention).
• Respondents who described the time, effort and cost of "providing data to government agencies" as outweighing the benefits were most likely to be from firms that: employ more than 11 FTEs, are not currently exporting, are "mature", and are from the software and business service industry and the primary sector (there was no difference in terms of firm growth intention).

Viewed from the perspective of the groups themselves, there were also some differences:

• In terms of firm size, all groups identified "the ACC insurance arrangements as they relate to your firm", "the regulations that apply to releasing a person who no longer suits the business" and "providing a range of employment and other data on your firm to government agencies" as examples of legislation where they felt the costs outweighed the benefits.
• In terms of export involvement, all groups identified "the regulations that apply to releasing a person who no longer suits the business", "the ACC insurance arrangements as they relate to your firm" and "providing a range of employment and other data on your firm to government agencies" as examples of legislation where they felt the costs outweighed the benefits.
• In terms of firm stage, all groups identified "the regulations that apply to releasing a person who no longer suits the business", "the ACC insurance arrangements as they relate to your firm" and "providing a range of employment and other data on your firm to government agencies" as examples of legislation where they felt the costs outweighed the benefits.
• In terms of growth intentions, all groups identified "the regulations that apply to releasing a person who no longer suits the business", "the ACC insurance arrangements as they relate to your firm" and "providing a range of employment and other data on your firm to government agencies" as examples of legislation where they felt the costs outweighed the benefits. The exception was contracting firms, which were more likely to comment on taxation.
• In terms of industry type, all groups identified "the regulations that apply to releasing a person who no longer suits the business" and "providing a range of employment and other data on your firm to government agencies" as examples of legislation where they felt the costs outweighed the benefits.

¹⁹Again this ranking was done on the percentage of the respondents. In this section the top three factors were included in the ranking.