People Smartz Blog

This will be a short blog entry but probably the most important you will read!

Australia's new IR Laws come with a kick.  If you are non compliant you can be fined and forced to pay back pay, credit accruals, pay additional superannuation guarantee payments and additional pay roll tax - and that is only the start of the list!

Here are some examples of the ramifications if your business is found to be non-compliant:

• Non Compliance with Modern Award Conditions - a fine of $33,000 for a company for each breach plus the cost of back wages etc to the employee.
• Non Compliance with National Employment Standards - a fine of $33,000 for a company for each breach plus the cost of making up the breach to the employee.
• Avoidance of Employment Obligations (Sham Contracting) a fine of $33,000 for a company for each breach plus back taxes plus superannuation guarantee payments plus possible implications for payroll tax.
• Unfair Dismissal - back wages if found to be an unfair dismissal plus possible superannuation to the employee.  in addition, legal costs and lost opportunity costs in regards to time and effort to defend the claim.  Cost = many 000's of $$$.

The cost of being compliant is minimal compared to the costs of being caught out! 

Contact us today to arrange for a Free Compliance Assessment for your business.

I am often conducting compliance reviews for small to medium sized businesses.  These reviews are designed to identify any issues that may be placing a business at risk in regards to the many legislative areas that govern employment in Australia.

This is a large area - we are dealing with laws in industrial relations, Health and Safety, Discrimination, Equal Employment Opportunity, Independent Contractors and the list could go on.

For a small to medium sized business remaining compliant in an ever changing legislative environment is almost a full time job! This is highlighted in the reviews I do, where I am yet to find one business that is fully compliant.

The most common area I need to address with business owners is the lack of employment agreements.  These agreements describe the employment relationship and are essential for establishing the expectations of both parties in their relationship.

In Australia, a common excuse for not having agreements is that the employee is employed under an award and that is sufficient.  Unfortunately, it is not!

An award covers the minimum standards for employment.  It does not contain any clauses for the protection of the business, nor does it assist in the maintenance of standards within the business.  It is designed to protect the employee not the employer.

To explain this I often say to my clients the following: "if you were establishing a relationship with a client, would you ensure that your expectations and their expectations were clearly defined and easily understood".  For the majority of my clients the answer to this is "Yes".  When I follow on with the question "well, why shouldn't it be the same with your employees?" - the penny finally drops!

Another major reason for having employment agreements is for the protection of your business. Clauses should be inserted regarding things like confidentiality, the protection of intellectual property, protection of client lists and employees responsibility to obey company policy.  These and other clauses are essential protections for your company and are definitely not contained in an award.  

At People Smartz, we are more than happy to assist you in putting employment agreements in place for your business.

Contact us to discuss your requirements.

If you already have agreements in place, we currently are offering free compliance reviews for small to medium sized business which include a review of one of your employment agreements.

Book your compliance review today.

Yesterday, while I was talking to a business collegue, she made a good comment - "why are business owners so willing to accept a risk when it is so easy to fix".

This comment got me thinking.  I am meeting with business owners everyday and I see them making such decisions.  For most it is simply a matter of whether they can afford to fix the problem or not - regardless of the level of risk.

The question for me is whether they are asking the right question.

Now we all know that the level of risk is a combination of the likelihood of something happening and the consequences if it does occur. 

It worries me that businesses often do not protect themselves against a risk until they actually get caught out by that risk.  When that happens the cost is often substantially more than than any risk control would have cost proactively.
 
This is particularly relevant with employment and workplace risk. Business owners can be reluctant to take measures to protect their business when it comes to their employees and their employment. 

I am yet to find an business owner who has not taken measures to protect their business against theft, fire, public liability etc.  Policies for these are in place and renewed annually.  When dealing with clients they ensure that their and their clients expectations are managed through appropriate agreements and procedures.  In short, in these areas, they manage their risk.

However, the number of business owners who do not manage the risks in employment should be a concern.  It is not unusual for me to come across businesses:

• Without employment agreements and other tools to manage expectations (such as position descriptions).
• Who are unaware of the appropriate award or agreement for use in their industry
• Without appropriate OH&S practices
• Without appropriate policies and procedures in regards to legislative requirements
• Who do not understand the unfair and unlawful dismissal laws
• Who do not understand the risk and cost of employee turnover.

This list could go on.  The truth of the matter is that the cost of a breach of any of the above would far out weigh the cost of implementing easy processes to alleviate them.

In that respect, the question should not be "can I afford them", it should be "can I afford not to have them controlled".

At People Smartz, we are currently offering a Free Compliance Review for businesses to enable them to assess their levels of risk. 

It suddenly occurred to me that the one blog I had not written so far was the one about our People Smartz tag line "People Drive Results".

The one thing every business has in common is that people are involved.  Whether we are talking one person hanging out their own shingle or a company with 100's of employees - people are always involved.

Regardless of the business, regardless of its purpose, it is people that make things happen and it is people that work to make that business a success.  It doesn't matter what tools you put in place, what processes they follow or  who they are, it all comes back to the people who work in and on the business.

On Monday, I attended a seminar and met a gentlemen who ran his own company in landscape design.  Now I will admit, I have two brown thumbs, but this man even had me excited about his company, his industry and him!  He was a perfect example of "people drive results". Regardless of the tools, regardless of the processes, regardless of the client, it was he who made the company what it was - a successful business.

I meet many businessman who spend money on new software programs, consultants, marketing programs etc.  These are all essential and important to the productivity of their company and should not be forgotten.  But when I start talking to them about the ways they can improve on the gains from this further by spending money on their people many look at me like I am delivering something astonishingly new! 

The most basic asset of any business is the people, the area where the most gain can be made is through people and the most cost effective way of having a successful business is through developing yourself and your people. 

Yes - regardless of the business, it is people who drive results.  Why not talk to us about how we can help you drive your business? Contact People Smartz today.

In a lot of businesses, appraisal time is one of tension and sometimes confusion. 

At times, employees are surprised to be told about "issues" which have been around for a long time, but have not been addressed.

Manager's are stressed because they have to sometimes handle unpleasant realities.  They are further annoyed by the amount of time the appraisals take them away from their "real job".

It is particularly stressful for everyone when a person's salary,commission or bonus has a dependance on the appraisal.

In such organisations, the appraisals are a time to look back on performance and as a result what develops is a reactive approach to business and individual development.  Appraisals are seen as a chore that "most be done".

It has been well know for many years that such an approach is basically bad for business for all these reasons and more.  Where this is occurring, or where there is no process at all, business owners and managers are missing a great opportunity for driving their business forward.

By initiating a proactive, goal orientated performance management system (rather than backward looking appraisals), business owners and managers can drive activities to achieve strategic aims.  Individual and business progress towards goals can be monitored and communicated ensuring everyone is aware of this progress.  Corrective action can be taken to address performance, knowledge or experience issues as they are identified.  In the end, everyone is what is expected of the business as a whole and themselves as individuals.

More importantly - once a year appraisal time becomes an all year round, "the way we do things" process which is forward looking and driving the business.

Doesn't that sound like the right way to do things?

Such systems are not the domain of big business or corporate.  In fact in small to medium size businesses the development of such programs can have impressive impact, encourages participation and spreads out accountability throughout the business.  This is particularly important in small business where the owners are always spread thin!

At People Smartz, we can help you develop a system suitable for you business, regardless of size or industry.  As an added extra, our coaches can further assist you in the implementation by coaching owners and managers in how to deal with performance and productivity issues as they appear. 

Learn more about our HR Coaching Programs and then contact us for assistance!