What are the five reasons you don’t need a HR Manager in your business?

Let’s face it starting a business is hard, real hard - running it successfully is possibly even harder. There is so much to do in so little time and so much that you want to achieve with limited resources - and let’s face it, with limited cash. You have enormous dreams that you are desperate to make a reality.

The issue is that you need to maximise all the resources at your disposal, to squeeze the most out of them as you can. A critical but often under-utilised area within most small businesses is often your most expensive one - your employees. So I thought that we would explore the five reasons not to get any HR support:

1. You are an exceptional recruiter - many people think recruitment is easy, working with  your ‘gut feel’ until you hire your first ‘dud’. There is also a misconception that recruitment is a quick process. Trouble is, if you have 2 weeks’ notice written into your employees’ contracts, it’s highly unlikely that you will replace a departing employee in time.  The other issue is that employers don’t ask behavioural or cultural-fit questions, they focus on the technical ones - but they rarely test whether the candidate can actually do what they say they can

2. You are an employee relations lawyer – you are completely across all the employment relations legislation such as the Fair Work Act, Anti-discrimination Action and Workplace Health & Safety and you have implemented compliant policies, which have been shared  with your team )plus they have signed to acknowledge that they will abide by the policies). A quick test for you - what is flexible working and who is entitled to ask for it? What is a valid reason to say no?

3. You are a trained psychologist – employees are human and as employees they also bring their individual complexity, and their personal life to work. Throw is some office conflict and you need a counselling background to navigate the issues and more importantly, the solutions. Most business owners tend to fear the time when the tears start and a box of tissues and a lengthy session is needed to get the employee back to work

4. You are a sports coach - you are a high performance sports coach used to developing and implementing strategies to maximise the high performance of your athletes. Coaching and the constant development of your employees’ skills is your forte. You are used to progressing employees through the ranks. Remember people don’t leave organisations they leave managers

5. You enjoy firing employees – you know how to terminate employees for non-performance, gross misconduct, misconduct and also when and how you can make a role redundant. You have the documentation, understand what payouts are required and also have the stomach for it.

The problem is that you need to have all of the above covered plus have a knowledge and understanding about finance, social media, legal issues, marketing, sales and business development plus your core offering. Tough ask I think.

If you have all of this covered then you don’t need me or my team (and you are probably not reading this article anyway as your business is booming). Well done! If not, don’t stress - this is all fixable.

How would you rate your knowledge in the field of employee management?

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

What drugs are your employees taking in the workplace?

By: Natasha Hawker

A survey released today makes for alarming reading, especially if you happen to be a blue collar small business owner with employees under your ‘duty of care’. To clarify what  ‘duty of care’ means - you as a business owner, are responsible for the workplace health and safety of your employees as well as contractors, volunteers and visitors to your place of work. 

Professor Jan Copeland who was responsible for the survey said they wanted to “... get an indication of how many people use cannabis before or during work, despite thinking it’s unsafe to do so. We’re hoping to send the message that workplace education about the effects of drugs on skills and safety is paramount to building safe work environments.”

If you do not take Workplace Health & Safety (WH&S) seriously, it can leave you open to claims under WH&S legislation, breach of contract (implied Duty of Care) and negligence claims - or worse still a seriously injured worker or member of the public.

The survey found that one in five employees are under the influence of drugs in the workplace -  typically marijuana. Marijuana can cause employees to show signs of:

1. affected perception including sounds, colour and other sensations
2. reduced co-ordination and balance
3. anxiety
4. sleepiness
5. altered vision

Now if we combined the above effects with operating machinery, it could potentially be a recipe for disaster - not only for your equipment or productivity but, most importantly, for the individual, your non drug-affected employees and even the public.

How can you protect yourself, your team, your reputation and your business?

1. Legislation - understand your obligations as a business owner under the Workplace Health & Safety legislation in your State
2. Policy - have a current policy (regularly circulated and reviewed) stating that being under the influence of alcohol and/or drugs in the workplace will not be tolerated and may result in disciplinary action up to and including termination
3. Education - you have a legal obligation to educate your employees about workplace safety including the serious effects of drug & alcohol use at work
4. Testing - you have included within policy the right to test for drugs & alcohol randomly or when an individual is under suspicion of use and influence

For all policies you need to ensure that you keep them up to date, any changes are effectively communicated and you have employees sign stating that they have understood and agree to abide by the policy.
Have you ever had an employee under the influence at work? What happened? What did you do about it?

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

Nothing to ad-Myer here!

Recently, everyone has been talking about Andrew Flanagan and his appointment at Myer as a senior executive. That wasn’t the news though, it was where he was terminated on his first day! This was after it was discovered that he had not worked as the Managing Director of Inditex as he had claimed on his CV. Myer found this out when Inditex - owners of Zara - advised that he had never worked for them. How embarrassing for Myer, but more amazing to me is the fact that Andrew Flanagan thought that he could get away with it - in the world we live in now, where information (not all of it correct) is at our fingertips and social media is infused everywhere. (According to a KPMG Fraud Survey in 2008 – ‘25 - 40% of all resumes are falsified’.

So how can we avoid this happening to us?

The issue here is that someone has not done their job properly by completing detailed reference and background checks on Mr Flanagan. Had they done so, he would have not even been interviewed, as a reference check beforehand would have picked up the inaccuracy. Believe me, these sorts of shenanigans happen in small business too. I know that at least 10% of my client base have experienced employee-related fraud amounting to about $1 million dollars (and these are the clients prepared to admit it!)

So what is the difference between reference checks and background checks and what can we learn from the debacle above?

Reference checks are generally calls to the previous two or three organisations that the candidate has worked for, to their previous manager to confirm their role, tenure and performance. Today, some companies have a policy to avoid defamation suits to only confirm the role and tenure and that’s OK (a tip here is to always ask what the company policy is to giving references) - generally it is more about what people don’t say rather than what they do - as in, if they are brief that would start to ring alarm bells for me and make me probe even more. (Another tip is to get independent confirmation that the individual did actually report to the manager stated - otherwise you might find out that you are actually chatting to their best mate!)

Background checks include Police Checks, Credit Checks and Entitlement Checks (Right to Work status). They can also confirm education history, academic qualifications, driving history and more. These checks are not overly expensive - especially given that you are about to welcome this candidate into your business with a high level of access to sensitive information or cash. At a bare minimum, I would complete a Police Check, Credit and Entitlement Check. Remember, if you employ someone that does not have the ‘right to work’ in Australia, you are exposing yourself to significant fines and potentially the inability to sponsor employees in the future.

Like my mother said “liars always get found out” but sometimes it’s too late and the damage has been done. Protect yourself, your team and your business by completing reference and background checks on your employees.

Natasha Hawker owns Employee Matters Pty Ltdd 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

Guess what I just discovered? I have a job for life!

By: Natasha Hawker

We recently sent out a survey to a number of small businesses to ascertain how compliant they are around current employment legislation - and it made for stark reading. We had respondents from a wide range of industries such as travel, IT, finance, accountants, events, publishing and interior design to name just a few. The main issues centred on three key areas – Hiring, Performance and Culture.

The main results were as follows:

·      A significant number of businesses do not review salaries annually – although this is not a legal requirement it does ensure compliance with the Award and also benchmarks the business against competitors

·         86% of respondents had fired someone, predominantly for non-performance or fraud and 25% had received a complaint raised against them as a result through the Fair Work Ombudsman – this is a high proportion and could so easily be avoided by following some processes and having documented meetings. For everyone the experience meant a financial penalty

·         Over 40% did not know what Modern Award their business falls under – this is a legal requirement and it's therefore highly likely that you are at risk of a breach with fines of $52k per breach

·      Two thirds used recruitment agencies but only 50% felt that they got value for money for this  spend

·         60% did not have a Workplace Health and Safety Policy in place and many were unaware of their legal obligations in this space – this is a high risk approach and I would encourage this to be fixed ASAP

·      45% did not have a company policy on Sexual Harassment, Bullying and EEO and 86% had not appropriately trained their employees on appropriate workplace behaviour – this dramatically increases direct exposure to a claim and damages costs

·       55% did not understand their obligations under Flexible Work and almost half still believed that the parent on parental leave needed to return to work full time at the 12 month mark – this is not the case - employees can request a further twelve months. They can also request leave up until their youngest child is at school, flexible work which could mean part time, a compressed week or working from home

·       One great result - 85% of respondents felt that their employee morale was either good or really high – this is a fabulous result and one I would encourage you to continue to build and reap the rewards from

The good news is that this is all easily fixed and doesn’t have to cost very much. The best thing is that it will save you money and, not only that, you will make more money as a business by hiring the right people, firing the non-performers and building high performing teams. We have all the policies you require plus we can help you hire (and better still fire) effectively. Please call me if you would like to chat about this further.

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

FWA rule - you can't fire someone who publicly called the MD a 'wa....!'

Recently, FWA ruled that Home Choice had unfairly dismissed an employee who had emailed the entire company calling his MD a name (rhyming with banker!) and stating that one of his hobbies was masturbation. Pretty extreme I would say, so why couldn't they fire him and what can we learn from this case?

Culture - it might be alleged that the company has a culture that allows the sharing of images, bad language and verbal abuse among employees, with senior management, at worst actively involved and, at best, complicit. One of the issues with this type of culture is that employees tend to assimilate and follow the patterns of behaviour - or leave, so the culture gets stronger and stronger. I know of someone in the building game that was working within a similar culture and survived by towing the line. This was until he realised that he was coming home and speaking to his wife the same way. He promptly left!

Precedence - given that this type of behaviour was active across the business and at all levels you cannot single out one incident with different treatment. But had there been active management of this behaviour and strict control, this incident would have been far less likely to be ruled unfair

Policy - there were no policies in place to guide and manage employees' behaviour. If employees are not told that this type of behaviour is not appropriate you can't manage this retrospectively

So what was the ruling? - Well, the employee did not want to be reinstated although this was an option. He was initially awarded $30,000 compensation reduced to $20,000 because of his role in the situation.

This company has a major cultural change to undergo which will be painful and will need to be led from the top. They will experience high attrition levels but the irony is that a positive culture built around respect for the individual will ultimately increase their employee engagement and motivation levels and improve the customer experience leading to better financial results.

Exit Stage Right

You may or may not have ever thought about the end - the time when for a number of reasons you would like to sell your business. The frightening thing is, is that you are not alone - the majority of business owners haven't either - but if you would like to get 4 times your EBIT for the sale you need to be thinking about this now...

I met a guy who had run a very successful business for 30 years turning over approx. $30m p.a. and with a profit of $2m pa. His wife had worked in the business with him but she was keen to spend more time travelling now that they were hitting their sixties. So in theory, the sales price should be close to $8m - the problem was everything was in his head, there were limited detailed processes or employee records. His business was significantly devalued as a result and he is likely to walk away from it and not recover the pot of gold at the end of the rainbow. So what can you do to prepare for the end?

1. Systemisation - every process, procedure and practice - so that someone else can pick it up and run with it and the business is not totally dependent on key personnel. This activity will also protect against attrition

2. HR - have detailed personnel files and contracts, job descriptions and annual reviews. Your employees are often part of the transaction and the potential buyer will want to understand their skills, annual leave and long service leave liability plus the performance records that they will inherit

3. Practice run - know that your business can run without you for extended periods of time - take some lengthy breaks, try and switch off and then come back and learn from the experience - what were the issues and how can you protect against those issues in the future?

4. Plan & prepare early - look to maximise your profits in the three years leading up to your sale but, more importantly, start an exit strategy document now to think through issues such as prospective buyers, financial and legal advisors and, importantly, your life post the sale. Any prospective buyer is likely to complete a thorough due diligence review too

It is really important that you start your business with the end in mind - sounds counter intuitive I know but it will also help with the everyday business decisions if you are always linking decisions, strategy and operations to the day of exit.