People Smartz Blog

The HR Coach Research Institute has released its latest quarterly index.

According to the research:

"The last quarter has shown a marked change in business sentiment in Australia with an increase of 6% in overall business confidence.  The last half of 2011 saw a 15% drop in business confidence so the increase offers welcome respite.  There is, however, a lot of ground to make up from the highs of 2007 and early 2008.

For the first time since 2008 wage pressure looks to be back on the agenda with an 18% increase in wage expectations by employers"

To download the latest Quarterly Index Dashboard -  Click Here

In October 2009, I wrote a blog article regarding the increasing risk businesses were putting themselves under when utilising independent contractors in their business.

This article was titled Independent Contractors - Benefit or Risk to Your Business? and you can read it again by clicking on the link - I strongly recommend you do.

An independent contractor is someone who is self-employed and contracts his or her services to clients - most often other businesses.

Unfortunately, over the years a number of employers have used this as an avenue to avoid their obligations to their employees in respect to things like accruals, superannuation and other entitlements.  These type of arrangements are called "Sham Contracts".

There has been a very strong push against Sham Contracting by the Fair Work Ombudsman over the last 12 months.  In particular, these investigations have revolved around three industries - cleaning, hair and beauty and call centres.

These audits found that 23% of businesses had "mis-classified" employees as independent contractors.  In other words - nearly a quarter of those companies audited were mis-classifying employees as independent contractors.

A recent experience of company I know is an example of how these laws can effect a business:

About this time last year, I met with a gentleman who had started a commercial cleaning company. Based on common practice in the industry, he had engaged a good number of independent contractors to service his growing client base.

Now, he had developed a business model designed around several main "objectives" including high cleaning standards, good quality cleaning products and a highly organised workforce.

The problem was that these "objectives" also defined the relationship he had with his "independent contractors".

Over the past 12 months, he has worked hard to grow his business.  During this time, he had also worked, with the aid of a specialist company, to set up his independent contractor arrangements and bring them within the requirements of the legislation.

During that period he has also been audited by the Fair Work Ombudsman and successfully negotiated their investigation.  

However, he was advised several weeks ago by the company assisting him that they could not continue to assist him (I should point out for very legitimate reasons with no fault on him or his company).

The result was that he could not continue to run his company on the model he had developed - utilising independent contractors.

He was faced with a choice - continue to operate with independent contractors and face potential issues with the law or move his team to an employment arrangement - given his experience with the Fair Work Ombudsman, he decided to abide by the law.

Unfortunately, when he spoke to his independent contractors, they were not willing to move to an employment relationship. 

This left him with only one option - to wind back his business to the point where the work could be handled by himself and his partner.

So the end result - a good number of people are now out of work, a number of businesses are now looking for a new cleaning company and a once thriving, growing business is now "diminishing" in size and operations.

This story highlights how the wrong employment structure can affect your business.  It was never the intention of the Fair Work Ombudsman's activities to create this situation - this is the result of having the wrong structure operating in the first place.

My recommendations from October 2010 still have a strong meaning now and I recommend you consider them in your business: 

"I strongly recommend to my clients before entering into independent contractors arrangements that they closely review the relationship they are forming.  While the benefits of utilising independent contractors are significant, if not structured properly, they also introduce an element of risk to the business."

People Smartz is able to assist businesses with the process of employing independent contractors.  If you have, or are considering, independent contractors in your business - contact us today.

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It is becoming more and more apparent, that no matter how small your business is, you can not avoid your obligations in regards to meeting your employer obligations.

Many thanks to our great friends at Brands Law for this great example of the line of thinking to which our courts are dealing with breaches of the Fair Work Act:

"Back in April 2011, in a case involving underpayment of penalty rates to employees, Magistrate Hawkins said there was a need to "send a message to the community at large and small employers particularly, that the correct entitlements for employees must be paid and that steps must be taken by employers (of all sizes) to ascertain and comply with minimum entitlements (as opposed to ignoring those obligations).

"Compliance should not be seen as the bastion of the large employers with human resources staff and advisory consultants (accountants, consultants, lawyers) behind them"."

In a speech in May 2011, the Fair Work Ombudsman made a point that it "was not sufficient for companies to turn a blind eye and hope that they are meeting their obligations".  He particularly made the point that companies need to make sure that they are resourcing their obligations appropriately.

With this type of language coming from our courts and the Ombudsman, it is very evident and important that all businesses, regardless of size have in place a system for ensuring compliance with their awards, the Fair Work Act and the National Employment Standards.

Our experience with small to medium sized businesses has shown that business people are finding it more and more difficult to manage these obligations.  As we have said in our blog posts before - the system itself is not built for small business.

Unfortunately, it appears that the message from our courts is that small businesses need to manage their obligations similarly to the way they would be handled in big business.  However, small businesses do not have the human resources staff etc to do that!

Understanding your obligations can be difficult and managing them can be time consuming. The place to start is to ensure you are compliant now!

Why not book one of our People and Business Reviews where we can help you identify the actions you can take to ensure you are meeting your obligations.

Book your review today!

Yes it nearing the end of the year.  We are entering party season - a great time to unwind, rub shoulders with workmates etc.  This can be a fun time!

But end of year parties have a very serious side as many of these antics lead to "regrets" after.

Recent research in Australia found that 70% of people believed that hitting the booze led to a more "personal" feeling amongst staff.  Nearly a quarter of females interviewed admitted that their boss had made a pass at them at an office party. 

Such behaviours can present many problems for businesses, particularly if the "antics" involved lead to a complaint from a member of staff regarding the behaviour of another.

It would be easy to say "no office party" or "its too risky", but sometimes the advantages of holding the party far outweigh the negatives.  The decision to have or not have one is one for the business alone. 

I would recommend a level headed approach to this years Xmas party - making sure the party is well planned and your staff are aware of the required behaviours before hand.  This way you can have the fun while managing the risk!

To help you plan for your businesses party, download our Christmas Checklist today.

This morning I posted a quote on Facebook from John C Maxwell - 

‎"Life is 10% what happens to me and 90% of how I react to it."

Posting this particular quote was not an accident.  It is because I believe that in life, and in business, you have the ability to choose the way you react to a particular situation.

The current situation in regards to the World's and Australia's economy is creating a mindset within many business owners - one which says "here we go again" and "things are tough at the moment".

On the most part, I have to say that I agree with them!  Things are tough at the moment - but all that means is that now is the time to actively seek opportunity.

I would like to give you two examples of clients of mine who are reacting positively to the current environment and actively seeking opportunity.

One of them is operating a single person business. She has had a rough year with her home flooded in the January floods and many other things happening around her.  Yet, despite having to move home and her workplace 3-4 times, she has worked hard at grasping opportunities as they have been presented to her.  Despite working in an industry that is flat lining, she is one of the few of her peers who is able to predict a positive cash flow over the next 6 months.

The second client is a team of two young professionals who have looked at the economy, identified potential markets for themselves and actively worked those markets hard.  Where other companies in their industry are laying off staff, they are hiring.  Where other companies in their industry are lowering their rates, they are raising theirs. Where other companies are loosing customers, they are gaining them.  

Both these clients have one thing in common.  They have chosen to take a positive approach and grasp opportunities as they present themselves.  Importantly, they have worked hard at establishing relationships with other businesses to encourage a flow of work between the different businesses.  In short - their efforts are not only ensuring the success of their own business but also assisting others.

Over the past two or three weeks, I have met with many business owners who are "doing it tough" and I have shared these stories with them.  It is interesting to hear their feedback.  Many were continuing to do things they had done previously because they had worked previously, others were looking for the silver lining - one retailer told me that things would turn around over the coming months because "people will start getting their tax cheques".

Well, I'm sorry, people have been getting their tax cheques now for nearly 2 months!  And what happens if they decide to bank their cheque rather than spend it?

Waiting for a silver lining or continuing to do the same things does not change something.  Taking a positive approach and seeking a new way is - in other words choose to respond rather than choose to do nothing!

This is what we are encouraging our business coaching clients to do and everyone of them is achieving their targets. In the case of the two I have described above, we are re-writing the targets - they are not high enough!  On average over the last six months our clients have achieved an average increase of 62% in revenue during a period where "things are tough".

So if you own a small business, think about how you are reacting to the economic environment - are you taking advantage of the opportunities that are out there and taking a positive approach?

People Smartz is a Business and HR Coaching company specialising in assisting small to medium sized business owners.  Our aim is to assist Business Owners to achieve both their personal and business goals in a balanced and sustainable manner.  If you would like to discuss business coaching - Contact Us

Today I was almost involved in an accident in my car.

I was driving along the road, the last of three cars travelling along a suburban street.  Up ahead was a side street with one car waiting to turn out and another waiting to turn into it.

Unexpectantly, the first of the two cars ahead of me suddenly stopped to let these two cars exit and enter the side street.

Taken by surprise, both I and the driver of the second car braked hard.  Unfortunately, the second car was unable to stop in time and drove straight into the rear of the first car, which then crashed into both the cars turning.  Luckily, I was travelling far enough behind to avoid being physically involved and my car was undamaged - something I can not say for the other 4 cars involved.  

More importantly, no one was injured in the accident.

Now what has this got to do with a blog about business you might ask?

Well, it teaches us a lesson in why it is important to manage expectations in your business - when you don't, the unexpected happens!

We have road laws that control how traffic behaves, signs that indicate who is required to give way or stop, speed limits and many other things that are provided to ensure we are safe and consistent on the road.  Today's accident occurred (in my opinion), because someone decided that they would do the "unexpected".

Simply, he stopped to allow traffic that legally did not have the right of way to turn.  As he stated after, he thought he was "doing the right thing" and that "they could be waiting for ages".  

The problem was that this was not a behaviour those travelling behind were expecting - we were expecting him to follow the rules.  He hadn't even thought that others would be expecting him to do something different!

Now we have said before in this blog that the number one thing we see when asked to assist businesses with issues that develop with people is that there is an inconsistent approach to expectation management.  

When expectations aren't clear or not understood, then problems occur.  In the case of the car accident, the expectations were clear, but the understanding was not - the driver did not understand the need to stick to rules, he did not understand the effect that his actions may have (I am sure he does now!)

So there is a lesson to be learnt from today's event - how you deliver and ensure understanding of your and your businesses expectations is important in ensuring your business remains on track - without any "accidents".

This is were tools such as position descriptions, employment agreements, codes of conduct, processes and procedures become very important.  They lay out the basic "expectations" of the business in regards to behaviours, customer and peer interaction, business development etc.  If these are clear and easily understood, you are a long way along the track to ensuring a smooth running business.

In line with this is ensuring that you have strong systems to communicate formally and informally with your team.  This includes performance management systems and the way you pass on important information.  Regardless of the size of the business, these systems in themselves can be designed to improve both individual and business performance.

Equally important is the demonstrated behaviour of owners and managers of your business. By ensuring your own actions are line with these expectations, you are providing an example to your team.

If you would like to improve the performance of your team, first look to how you manage your expectations - For many years, we at People Smartz, have been assisting in ensuring that businesses run smoothly through the strong development of these expectation management tools and behaviours. Call us today to assist you!

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For the last two years, we have released many blogs posts on the unfair dismissal laws contained in the Fair Work Act.

Earlier this month, Fair Work Australia released its latest quarterly report.  It contains some interesting numbers in regards to unfair dismissal claims and the Fair Dismissal Code for Small Business

With unfair dismissals, the tribunal received 3219 unfair dismissal applications in the quarter. The overwhelming majority of these (2564), were settled at or before conciliation. The tribunal made decisions on only 64 dismissal claims in the quarter, finding 24 were unfair and 40 fair.  Only 18 claims resulted in a decision awarding compensation to the ex-employee.

Employees are now much more aware of their rights under the act and claims are on the rise.  Many of our clients are reporting that claims made against them have been frivolous and they have settled "just to make it go away".  The numbers released this month certainly seem to uphold what they are telling us!  

From the numbers presented by Fair Work Australia, The Fair Dismissal Code for Small Business is not working!  While 609 applications related to a small business employee, only two were rejected because the dismissal was consistent with the code. 
We believe this is a worry - if followed, the code is designed to protect a small business from unfair dismissal claims.  At People Smartz, our experience is telling us that, if they know about the code at all, most businesses are finding it difficult to understand - after all, it is basically a corporate process that they need to follow!

We believe that small businesses are generally finding it difficult to work with these laws and over time the issues they present are compounding.  The latest set of numbers from Fair Work Australia seem to indicate this is correct!

Given the current state of Australia's workplace laws, small businesses need to ensure they have the systems in place to protect them against unfair dismissal claims.  This includes having appropriate systems in place to manage poor performance and terminate staff.  

At People Smartz, we are experienced in assisting our clients to put such systems in place.  For many years, we have had in place a review process for small business called a "People and Business Review".  This is designed to review what is in place in your business and assist you to identify the changes you need to make to protect your business.  Why not book yours today?

Contact Us Today!





 

One of the things small business clients often talk to me about is the time it takes to process their superannuation obligations, particularly when they have a number of employees with different superannuation funds.

Well finally we have seen the establishment of a clearing house to help small businesses meet their obligations!

A free (and optional) super clearing house service is now available to small businesses with less than 20 employees to help them meet their super guarantee obligations.

The Small Business Superannuation Clearing House is administered by Medicare Australia and lets employers pay their super contributions to a single location in one simple electronic transaction.

Small businesses that register to use the service will have their super guarantee obligation discharged, as long as all of the following apply:

• they pay the correct amount;
• they pay by the super payment cut-off date;
• the payment is accepted by the clearing house; and
• the payment is not rejected by the super fund.

Employers who receive an employee's choice of fund nomination will have their choice obligation discharged if they pass the information to the clearing house within 21 days of receiving the choice of fund nomination.

Small businesses can register online for the service by:

• visiting the Medicare website at www.medicareaustralia.gov.au/super; or
• phoning Medicare Australia on 1300 660 048.

Recently People Smartz launched a new one on one workshop called "Mutual Success".

These workshops are built on the premise that employers and employees working together can achieve success on a business and individual level.  We've called this "Mutual Success".  Really, its all about building busienesses through stong connections between all members of a business's "Team".

The workshops take a whole of business approach to managing people in a business.  They begin with seeking the needs of the business owner and identifying those areas of the business which may be effecting the achievement of "Mutual Success".

This begins with the basics - is the business providing their team members with all their entitlements, is the business complaint with Australia's new industrial relations laws and what behaviours are effecting the achievement of success.

We then move on to talking about how the business can move someway towards achieving "Mutual Success" and putting in place a plan to start them on their way.

Having completed a small number of these workshops, I have found that the results are incredible.  Not only are businesses finding new ways towards success, they are also covering off on important areas of compliance.  For thoses businesses, managing people has become a factor in their success!  One comment made by a workshop participant was "this has changed the whole way I look at my staff.  They are part of my competitive edge - not just a cost on the business".

At People Smartz, we strongly believe the development of "Mutual Success" is essential to the success of small to medium sized businesses.  In fact, we believe so strongly in this concept that we have decided to offer the "Mutual Success" workshops to small and medium sized business for free for the next 3 months!

Businesses taking part in the workshops come away with

• A new awareness of what may be challenging your business in regards to staff within your business
• Identify 3 things you can do now to improve productivity, staff retention and staff costs in your business
• A 3 month “Getting the Basics Right” Smartz Plan individualized for your business that you can begin work on straight away!

Visit our booking page to find out more today!

Recently, Australia's newspapers have been full of the story regarding the Sexual Harassment claim against the CEO of David Jones.

These stories have highlighted the risks businesses have regarding harassment in the workplace. However, the purpose of this posting is not to discuss the David Jones case - it is to highlight the fact that we are now approaching that time of year where such complaints increase.

Yes it nearing the end of the year.  We are entering party season - a great time to unwind, rub shoulders with workmates etc.  This can be a fun time!

But end of year parties have a very serious side as many of these antics lead to "regrets" after.

Recent research in Australia found that 70% of people believed that hitting the booze led to a more "personal" feeling amongst staff.  Nearly a quarter of females interviewed admitted that their boss had made a pass at them at an office party. 

Such behaviours can present many problems for businesses, particularly if the "antics" involved lead to a complaint from a member of staff regarding the behaviour of another.

It would be easy to say "no office party" or "its too risky", but sometimes the advantages of holding the party far outweigh the negatives.  The decision to have or not have one is one for the business alone. 

I would recommend a level headed approach to this years Xmas party - making sure the party is well planned and your staff are aware of the required behaviours before hand.  This way you can have the fun while managing the risk!

To help you plan for your businesses party, download our Christmas Checklist today.