Thai-Anh Cooper delivers her Ten HR Commandments for SMEs that can save business owners thousands of dollars.
“A lack of legislatively compliant HR framework in your business could end up costing you thousands of dollars in fines and profitability over time.” - Thai-Anh Cooper.
The employer/employee relationship stretches all the way back to Biblical times, so its no surprise that the souring of this relationship can often result in disputes of Biblical proportions. Recently here in New Zealand, there have been cases sighting breaches of employment legislation, extortion of migrant workers, employment disputes and unfair people practices littered throughout our mainstream media. SME owners are often at the crux of these situations due to a lack of understanding, and framework around their businesses HR practices.
“A lack of legislatively compliant HR framework in your business could end up costing you thousands of dollars in fines and profitability over time.” Thai-Anh Cooper.
“Its imperative to set employment standards before you even entertain the notion of an employee walking through your front door to commence employment” explains Thai-Anh Cooper, owner of HR consultancy business In2HR. “The projected cost of losing an entry level worker is $6000 dollars, as the role becomes more significant, that cost raises considerably, not to mention the cost in profitability and impact on staff morale to your business”. These standards are not only essential from a monetary and wellbeing standpoint, but are also legislative requirements too.
It seems however, despite the heavy-handed penalties and media coverage, establishing a compliant HR framework seems to be one of the final things SME’s prioritize. “I put together these ten commandments for businesses looking for that starting point, the absolute foundation in terms of a basic understanding” says Thai-Anh, “From these ten things, there will possibly be another 100 things that pop up. The good news however is that if you get your basics right, and framework in place, those situations are very manageable. A robust HR strategy and framework will not only benefit owners and operators, they keep things fair for your people ”. “Its imperative to build upon whatever knowledge you have, and put a structure into place that works” she adds, we’ve seen so many businesses succeed by implementing a sound HR strategy and framework, I’ve seen these benefits first hand”
Here are Thai-Anh’s Ten HR Commandments:
1) Employment Agreements are Essential: Ensure that all of your employees have an employment agreement that contains all of the mandatory clauses. You might think this is a no brainer, however shockingly, 1 in 10 employees in NZ do not have employment agreements. All employees MUST have an employment agreement.
2) Know and set your employment agreement terms: Ensure that the employment agreement is signed and the terms agreed to before the employee commences any work. Otherwise parts of the terms, such as a 90-day trial period, may not be enforceable.
3) Honor your agreement terms: Ensure that the employment terms contained in your employees employment agreement match how the employee performs their work. There are countless cases where employee’s terms of employment do not reflect their actual day-to-day activities or work schedule or their pay.
4) Keep clear records: Make sure that you meet all your record keeping obligations as an employer. This includes wage and time records, holiday records and employee files.
5) No rogue clauses: If you aren’t sure – seek advice! Some employers have included clauses in their agreements which effectively operate outside of minimum employment standards which is illegal. Remember that minimum employment standards are just that, minimums. Many employers also fall down by not following a robust process before invoking clauses in their employment agreements. This can have negative repercussions and employers often find themselves having to pay out compensation as a result. Remember too, you cannot opt out of the law.
6) Address and deal with issues quickly and communicate: Deal with any employment issues quickly when they are bought to your attention and always keep the lines of communication open with the employee. We often hear of situations where an employee has raised an issue with the employer and the employer hasn’t gotten back to the employee in a timely manner. Often, the employer is working on the issue, but they haven’t communicated with the employee. The flow on effect of poor communication is detrimental to say the least; employees lose trust and value in their employer, and may harbor resentment towards the business as a result.
7) Set expectations and deliverables: In order to get the most of your employees, they need to know what you expect of them and how their performance will be measured. Employers should spend time explaining these expectations to the employee so that everyone is operating with the same level of understanding.
8) Set them up for success: This helps to build a solid foundation for your employee from day 1, ensuring that they receive all the information and training that they need in order to do their job successfully. It also has the added advantage of looking professional and your new employee is more likely to want to return after their first day. Taking away those 1st day nerves can go a long way!
9) Keep employment matters confidential: For privacy and confidentiality reasons, if you are disciplining employees, all these matters MUST remain confidential. This might be difficult as other employees may think that you have not taken any action.
10) Consistency is KEY: If you have dealt with a particular employee situation in a certain way, this will set precedent for the future. So you need to give careful thought to the information provided in each case to ensure that the outcome is both fair and consistent.
In addition to the above, another key factor businesses have tripped up on recently is the legislative changes to employment law that took affect on the 1st of April 2016. “Many businesses are still unaware of the actual changes and what they mean for them and their employee’s,” adds Thai-Anh.
Reviewing your HR practices on a yearly basis is highly recommended, we live in a day and age where information is readily available online at any point and time. The Employment website (http://www.employment.govt.nz) is a critical resource with a wealth of information on best practice and HR legislation for businesses large and small.
Achieving a solid and sound HR framework for your business may not be as hard as it seems, practitioners like Thai-Anh Cooper are well versed in identifying your businesses needs, so that you too can steer clear of those hefty labour department fines.
Thai-Anh Cooper is the owner of HR consultancy www.in2Hr.co.nz