HR data....Yawn!! - but wait - you do need to know this

By: Natasha Hawker

HR has long had a 'touchy feely' reputation but this is fast changing and in my view will continue to do so. At the big end of town, bit by bit the data is changing or improving the decisions made around what is often one of the most expensive costs to a business - your people.

I believe that SMEs need to watch, learn and take best practice from the corporate world, but use it if, and only if, it works for your business. That said, I believe that you can learn from their mistakes but also apply it in a way that makes sense for you.

For example - what is the current employee turnover of your business as a percentage of your total headcount? As a guide, a healthy turnover is about 10-20%, depending on your industry. Why does this matter? - because it is damn expensive and time-consuming to replace people, but it also means you are not focused on what you should be! Not only that, there will be a dip in productivity as a result.

How would tracking the trends help? Well, for a start you might see the following:

• cost management opportunities
• identification of roles that are particularly difficult to retain and so develop strategies to address this
•  identify management issues
• determine whether you are struggling to identify what you really need
• improve your company's attractiveness to the market- why would someone want to work for you?

 There are a number of beneficial pieces of data that are worth capturing as this will enhance your decision making ability - some other metrics you might want to consider are: 

• workforce mix - permanent full / part time, temps, casuals & independent contractors
• annual leave liability vs. scheduled annual leave
• managed attrition vs. unmanaged attrition
• absenteeism trends / issues

 All the above are costs to your business but also they are levers that you can pull to reduce costs.

What metrics are you measuring and how has this impacted your business?

Natasha Hawker owns Employee Matters Pty Ltd; an HR Consultancy that assists small to medium businesses with their HR functions to make them more efficient and profitable. Their offering includes HR Management, Recruitment, Training, Coaching, and Exit Management – find them at www.employeematters.com.au

Merger anyone?

By: Natasha Hawker

Now things seem to be looking up are you thinking about a merger or acquisition? Many SMEs decide one of the quickest ways to grow your business is to buy another one.

There is a lot of due diligence required around the financials, compliance and other legalities - but there are also the legal requirements if you want to take on the seller's employees - if you are considering this I would recommend that you complete the following checks:

• review all employment contracts - it's likely you will find a wide variety of them - which,  as the new owner, you will need to meet the BOOT test (more on this later)
• personnel file audit - what are the performance levels of the current employees
• what are the absenteeism rates like? - if high, there may be an underlying problem
• what is the current percentage rate of attrition? - is this managed or unmanaged
• what type of training is recorded? What's the frequency of this
• what are the accident or near miss rates like?

 Collecting and analysing this information will provide you with a wealth of knowledge about the employee footprint and will also provide the value proposition of the employees, (or alternatively the problems you are about to inherit).

Example - I knew of a company that had casual employees on permanent contracts - not great but not the biggest problem - these employees had upwards of twenty years service. The buyer did not check the personnel files, so has just inherited a massive liability in terms of long service leave and redundancy payouts. Now obviously the seller did not share this piece of information and had they, the sale may have proceeded but it would have likely affected the price.

If you are looking at transferring employees across to your company and a warning up front - this is a complex area of employment law, you must pass the ‘BOOT’ or the Better Off Overall Test. This effectively means the employees transferring across cannot be made to settle for employment conditions less or lower than their current situation. This is beyond compensation and could cover conditions such as additional annual leave or guaranteed training budgets. A further consideration is - how will this impact your current team when they find out the new guys are on a better deal?

Have you had any experience positive or negative experiences in this area?

 Natasha Hawker owns Employee Matters Pty Ltd; an HR Consultancy that assists small to medium businesses with their HR functions to make them more efficient and profitable. Their offering includes HR Management, Recruitment, Training, Coaching, and Exit Management – find them at www.employeematters.com.au