by Peter Maguire | Aug 14, 2022 | C1: Commitment, C2: Capability, C3: Competency, C4: Culture, Employee Engagement, EVP, Human Resources
We are hearing a lot of business owners asking the question: “Where can I find the people I need for my business?”
Attracting and retaining the people we need is one of the greatest challenges that we have in business today.
The pandemic has had dramatic effects on the labour market in a number of ways:
- Closed borders have meant that overseas students, backpackers and other migrant workers have not been here
- Industries such as hospitality and tourism are ones that were hard hit and workers who had been stood down went looking for more secure work, found it and aren’t going back
- Others which were under the pump like our essential services and frontline workers were stretched to breaking point and many have left to find less stressful work
- People have moved to regional areas or interstate to get out of lockdown areas and to improve life balance
- With work from home orders giving people the opportunity to do that, many have found that they like that and they want to keep doing it
- Conversely, there are some who don’t want to work from home but would prefer to return to the office and finally
- The pandemic has caused people to rethink what is important to them in life and where work fits in their lives and that impacts on their job choices.
As a result of all of these factors, the labour market is more competitive than it has ever been.
So how do you optimally position your business to be a preferred employer in these challenging times?
What do you have to offer when that potential employee asks the question: “Why would I want to work for you?”
What difference has the pandemic made to the answers to that question?
There have been numerous studies and surveys undertaken on what people want in their workplace and their career.
Generally, we shouldn’t be surprised with what these tell us – they are pretty obvious, when you think about it – people want:
- The opportunity to deploy their skills and talents on work that they enjoy
- The contribution that they make in their work to serve a purpose – to give meaning to their lives
- A sense of belonging in working for an organisation that they feel part of and can feel proud of
- Recognition for the work that they do in both monetary and self-esteem terms
- Flexibility that enables them to balance work commitments with other elements of their lives
- A sense of fairness and respect in the inclusion and behaviour of people in the organisation (ie everyone gets a fair go) and
- Trust in their employer, their boss and their colleagues to support them in their role, relationships and wellbeing.
These have always been important elements of a positive workplace culture, but the impact of the pandemic has amplified them.
Additionally, when it is an employee’s labour market as is very much the case today, candidates can pick and choose based on their personal preference set.
The challenges for employers
To be successful in today’s job market, an employer must have a valid and attractive Employer Value Proposition (EVP) which clearly answers that question: “Why would I want to work for you?”
For many business owners and managers, this requires a real mind shift – to open your mind up to new ways of working and new ways of leading and managing your people.
What flexibilities can you offer people in relation to when, where and perhaps even how they work in the role that you need filled?
While you might ideally want people to return full-time to the office, have a think about why you want that. Is it because that works best for you (because it is the way it was pre-pandemic) or is it because it is best for your people and, for that matter, the business?
Perhaps a hybrid arrangement could work – some time in the office with some time working at home or at a remote hub like a cowering space near the employee’s home.
Then there is that question of what your EVP is. Do you know?
One of the more remarkable things that we have found over the years is that 80% of job ads don’t actually give you a reason to apply for them and don’t differentiate from their competition at all.
If “people are your greatest asset” as is so often said, why don’t most job ads reflect that?
Again, you need to open your mind to where you are most likely to find the skills that you are looking for and what might be important to them in a role.
For example, a number of years ago we assisted a client with recruitment of a part-time administrative person, They started thinking of the role as 3 days a week for a full day.
Then we talked about where they would be likely to find the right person and what they had to offer someone in that segment of the labour market.
The business was in a quality suburban shopping strip with a good supermarket, a chemist, a dry cleaner and the other traders that you normally find in these places. There was a tram that stopped out the front of the office and there was nearby free parking. It was ideal for a parent with school children to work during school hours and get the other daily stuff done like picking up something for dinner or getting that script filled or the dry cleaning done. That meant that the kids could be picked up and taken home without any detours.
They pitched it that way and got what they wanted because they thought about what a candidate would be looking for in the context of their personal needs. They crafted the role to fit that.
What is your EVP?
If you look at the 7 factors above, which of those give you a strategic advantage over your labour market competitors?
Then consider ways that you can:
- Define your value proposition (be clear about what you offer and why it is of value) taking into account the specific market that you are likely to find people in
- Articulate your value proposition (how do you leverage that to attract and retain the people that you need) and
- Present it engagingly and authentically, making sure that it is real – you won’t keep people long if they find that the rhetoric didn’t fit with the reality.
Your people are a great resource for this.
Part of opening your mind up is about looking at how you interact with your people and how they might contribute in different ways to support the business.
Your people will have things that they value about working for you and they will also have ideas on what isn’t working so well or things that could help to attract and retain the people you need.
So ask them what they think.Run ideas that you have past them to see what they think.
Optimise the relationships with your people by really making them feel that their opinions and work contributions are both valued.
Would any of your employees be good ambassadors for your business (eg they might be happy to be in a video telling the public why they love working in your business)?
We know how effective customer testimonials can be for sales of our products or services – why wouldn’t testimonials by your staff work as well?
If you would like some assistance in developing your EVP so that you can position your business as an Employer of Choice – for real – we can help.
by Peter Maguire | Aug 14, 2022 | C1: Commitment, C2: Capability, C3: Competency, C4: Culture, Employee Engagement, Fair Work, Human Resources, Other stuff, Wage Obligations
Is an enterprise agreement the answer?
Wouldn’t it be great if you could simplify compliance with modern awards and related matters?
If you could tailor content to your workplace?
If you could have everyone on the same terms of employment?
Guess what – you can do all of those things and more in an enterprise agreement.
What is an enterprise agreement?
An enterprise agreement is an agreement made between an employer and a group of employees on wages and conditions of employment for that group of employees.
They can be made with all or some employees in a particular enterprise and have to be approved by the Fair Work Commission.
They can incorporate modern awards that have application to the group of employees or they can exclude those modern awards, totally replacing them.
How are they made?
The process starts with the issue of a Notice of Representational Rights which informs the employees concerned that their employer wants to make an enterprise agreement and that they have the right to be represented in negotiation of that agreement.
Employees nominate one or more people to represent them and they can nominate themselves if they wish to.
If an employee is a member of a union, the union has default bargaining rights unless that employee nominates someone else as their bargaining representative.
The employer and employee representatives then develop a draft agreement and, when it has got to stage where there is a reasonable level of confidence that people are OK with it, a vote of employees is organised.
If a majority of the employees who vote, vote in favour of it, it is approved subject to certification by the Fair Work Commission.
What happens at the Fair Work Commission?
A copy of the signed agreement together with an Application to Approve an Enterprise Agreement (Form F16) and a Statutory Declaration (Form F17) and various other documents are filed with the Fair Work Commission.
The Commissioner who deals with it is then primarily concerned with the following questions:
- Whether the Agreement satisfies the Better Off Overall Test i.e. employees are better off under the Agreement than they would be under the relevant modern award(s).
- Whether the group of people covered by the agreement does not unfairly exclude other employees and
- Whether the Agreement has been fairly made i.e. the correct process has been followed, people have been properly consulted, prescribed timelines observed and people have been properly informed about the effects of making the Agreement on their wages and terms of employment before they voted on it
If the Commissioner has any concerns, an undertaking might be required or submissions might be invited for consideration.
Once the Commissioner can answer “yes” to the 3 questions noted above, the Agreement can be formally approved and legally takes effect from 7 days after the date of that approval.
Reasons for doing an enterprise agreement
There are a variety of very good reasons that might apply depending on the particular award coverage and the circumstances of the business. These include:
- Simplification: modern awards try to cover whole industries or particular occupations across multiple industries and we often find that much of the content in modern awards has little or any relevance to particular businesses. So we can trim it back to what is relevant.
- Flexibility: all modern awards have Individual Flexibility Clauses which allow some flexibility with existing employees in a limited range of matters and Facilitative Provisions which also allow some room for negotiation on some things. However, they won’t necessarily provide the sorts of flexibilities that employees might want and the employer is happy to offer and that can be addressed through an enterprise agreement.
- Customisation: modern awards are largely a one size fits all approach and we know that one size doesn’t fit all. For example, classification structures in modern awards are often difficult to apply to a particular business because they lack definition or they just don’t make sense. In most cases, they were developed decades ago and really don’t take account of technological and other changes to the way we work and the skills that we use today. If you pay people sufficiently above award, you can make your own structure that makes sense for your business and your people.
- Fairness: some modern awards have specific provisions which are just unfair for employer and employees. For example, modern awards which have Industry Specific Redundancy provisions allow an employee who resigns after at least one year’s service to receive a redundancy payment of up to 8 weeks while an employee who is retrenched after more than 5 years’ service gets less under the modern award than they would under the National Employment Standards that apply to most other employees. With an enterprise agreement, you can put everyone on the same footing with things like that.
- Protection: for some businesses, having an enterprise agreement of your own offers protection from coercion to enter into an enterprise agreement with a union which would force you to pay your workers at major project rates on all of the work that you do. That can make your business uncompetitive for other work. If you are in such an industry and have a non-unionised workforce who are happy to be that way, your own enterprise agreement can help you to get the right balance in paying higher rates on major project work and at lower levels on other work. Equally, a head contactor on a major project would likely want your business to have an enterprise agreement so as to avoid industrial relations disruptions to the project. All enterprise agreements are published on the Fair Work Commission’s website and you can use that to publicly demonstrate your employer value proposition to prospective employees because it is locked in by law.
Conclusions
The process for making an enterprise agreement is complicated and the Fair Work Commission’s approach to them is complex. Additionally, individual Commissioners can have their own way of dealing with them.
That means that you do need professional assistance in developing and implementing one and we can assist with that. Equally, if any of the scenarios described above fit your business situation, it can be a very worthwhile exercise that can deliver real positive change in workplace flexibility, fairness
and employee engagement.
If any of this is of interest to you, take advantage of our free first consultation to explore your options and how we can help.
Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094
by Peter Maguire | Jun 15, 2022 | C1: Commitment, C2: Capability, Fair Work, Human Resources, News, Wage Obligations
FWC lifts Minimum Wage by 5.2%
This morning, the Fair Work Commission announced its decision in the 2021-2022 Annual Wage Review. This has been the most anticipated annual wage review for some time given the recent commentary from our new Federal Government about ensuring that wage increases keep pace with inflation which is tracking at 5.1%.
This year, the decision has a few different elements in that FWC decided to:
- Award a $40 per week increase in the national minimum wage and award wages that are currently below $869.60 per week
- Award a 4.6% increase to award wages that are currently $869.60 per week or more
- Defer the operative date for a few industries (those in aviation, tourism and hospitality industries) to 1 October 2022
- Apply the increases for all other Awards from the normal date of 1 July 2022.
The $40 per week increase in the national minimum wage equates to 5.2% and increases it to $812.60 per week or $21.38 per hour.
The new rates are payable from the commencement of the first pay period occurring one or after the relevant operative date.
For employers, the different scenarios that can apply are:
- If you have employees who are covered by a modern award and you otherwise apply all of the terms and conditions of the award, you must ensure that employees are paid at least the award rate for their classification as adjusted for this decision.
- If you have employees who are award free and not covered by an enterprise agreement, you must ensure that they are paid at least the National Minimum Wage as adjusted for this decision.
- If you have employees who are covered by an award and you pay them on an annualised wage basis or on a salary or all purpose rate which sets off certain monetary employment conditions such as annual leave loading, overtime and shift loadings, penalty payments and allowances, you need to recalculate the rate of pay to ensure that the employee remains better off overall against award entitlements and comply with any award provisions that might apply to annualised wage arrangement.
- If you have employees who are covered by an enterprise agreement which provides for annual adjustment of wages in line with Annual wage Review decisions of the Fair Work Commission, you need to adjust wages by the designated amount or percentage from the operative date for the relevant award.
- If you have employees who are covered by an enterprise agreement but the agreement does not provide for annual adjustment as per 4, you need to ensure that wages paid are at least equal to those applying to the underpinning modern awards or the National Minimum Wage as applicable from the relevant operative date.
- You need also to have regard to any provisions in employment contracts which might provide an obligation to pass on any increases separate from or additional to any of the above scenarios.
Please also note that there have been a number of changes to the Fair Work Act and modern awards since the last Annual Wage Review.
This likely also means that you will need to review your employment contracts, something that we recommend that you do at least once a year in any case.
If you need assistance in understanding and applying the effects of this decision in your business, we are happy to assist. We offer a free initial phone consultation if this is of interest to you. Contact us at 0438 533 311 or enquiries@ridgelinehr.com.au.
Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094
by Peter Maguire | May 28, 2022 | C1: Commitment, C2: Capability, Fair Work, Wage Obligations
Creative compliance – classification structures
This is one of our creative compliance blogs where we explore options for being a little innovative within the constructs of the Fair Work system.
The Challenge
One of the difficulties that employers and employees can have with modern awards is understanding the classification and wage structures ie where a particular employee’s job fits and what the minimum rate of pay for that job is.
Why is this difficult?
Sadly, it is because classification structures in many awards simply don’t describe the work that people do. Some make no reference to tasks performed, some have some generic content around level of supervision or degree of independence which isn’t very helpful and some have stated qualification levels which, in some cases, are not actually relevant.
How can that be the case?
Back in the early 1990s, employer associations and unions negotiated new so-called “skills based classification structures”. Ostensibly, this was about aligning job classifications and wage rates with industry training and qualification levels.
However, what actually happened was:
– Industry training people built the training curriculum and qualifications frameworks;
– Industrial relations people separately negotiated structures for each industry against a set of job benchmarks framed as a % of a tradesperson’s rate in the context of the particular awards relevant to the particular industry or occupation and the wage structures that already existed in those awards;
– Some industries simply set award classification levels by reference to the qualifications framework for the particular industry or occupation with little or no definition of tasks performed;
– Others set award classifications by aligning existing award wage levels for particular jobs (eg for a trades assistant or a forklift driver) with the closest benchmark % of the tradesperson’s rate, largely ignoring the qualifications framework in the negotiation process but including references after setting the wage levels; and
– While there were guidelines and the Australian Industrial Relations Commission nominally oversaw the process and had to approve the award classification structures, each industry pretty well did its own thing.
Some awards kept schedules of the pre-existing classification levels as references which were helpful.
Note: Ridgeline HR Practice Leader, Peter Maguire was a member of the Australian Textile Employers Industrial Relations Council and participated on the working party that developed the structure for the textile industry.
Then, with the advent of the Fair Work system, modern awards were created and there has been an ongoing modern award review process going on in the Fair Work Commission for the past 9 years.
With some awards, those reference schedules have been removed in these processes.
Of course, there is the other problem – that the way work is performed and the skills and knowledge required to perform that work effectively today can be very different to what it was when those so called skills-based classification structures were created 30 years ago.
Shouldn’t the Fair Work Commission fix it?
What is clear is that the award modernisation process really hasn’t been effective in modernising awards. It has largely been a rationalisation process to reduce the thousands of awards that operated federally and in States and Territories to a more manageable number. The Fair Work Commission has been effective in getting that number down to a bit over 120.
It has also been effective in standardising some provisions across awards to provide consistency but classification structures have largely been left alone and that is likely to remain the case.
What can you do about it?
If you are paying your people significantly above award, you have the opportunity of creating your own classification structure – something that you and your people see as being fair and that makes sense for your business.
You can do something entirely different to the award structure as long as people would all be paid more under your structure than they would be under the award structure.
What is important in implementing something of this sort is:
1. There are clear descriptors for each level which clearly differentiate between one level and the next
2. Your people are educated and consulted about the structure and are accepting of it as a fair way to recognise peoples’ skills and contributions
3. You have a process for people to seek reclassification based on their skills and abilities as they relate to your classification structure
4. Your classifications and remuneration satisfy the “Better Off Overall” principle i.e. they are above the award minimum rates for the corresponding award classifications
5. If other monetary award conditions (eg allowances or penalty payments or loadings) are to be factored into overall wage rates within your structure as well, your structure should include detail on what is included in the rates and how the calculations have been made
6. You update the rates every time there are award wage increases – generally these happen on 1 July each year via the federal minimum wage review conducted by the Fair Work Commission
7. You ensure that your contracts of employment and remuneration policies and procedures are aligned with your classification structure and processes.
You might also consider developing your own enterprise agreement and having that approved by your employees and the Fair Work Commission which makes it legally binding on all parties. It also serves as evidence that your pay and conditions are both fair and above award.
Conclusion
We do have strict compliance requirements under employment laws and modern awards but that doesn’t mean that you cannot be creative and compliant.
If you want to explore opportunities to get creatively compliant, book in for your free first consultation by calling us on 0438 533 311 or emailing us at enquiries@ridgelinehr.com.au.
Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094
by Peter Maguire | May 23, 2022 | C1: Commitment, C2: Capability, Fair Work, Human Resources, News
What’s Labor’s Workplace Relations Agenda?
There hasn’t been a lot of talk about workplace relations in the lead up to the federal election and it hasn’t really been put forward as an election issue. However, if you look at the workplace relations/employment policies on the ALP website, there are some big changes in the wings.
Even if the ALP is not successful in obtaining a majority in the House of Representatives in its own right, there are plenty of worker friendly partners in both Houses of Parliament for them to get their legislation through.
So what do they have in mind?
The central themes are around security of employment, equal pay and security of worker’s legal entitlements.
Specific changes proposed include the following:
- Inclusion of job security as an Object of the Fair Work Act so that the Fair Work Commission would have to consider job security in all of its decision making
- Extending the powers of the Fair Work Commission to make orders for minimum standards for new forms of work such as gig workers.
- Restoring the common law definition of a casual worker to undo recent Court decisions that placed primacy on the employment contract entered into at the start of an employment relationship rather than the character of the employment relationship during the relationship.
- Introducing a requirement for employees engaged through labour hire to be paid the same as workers directly engaged by the host to do the same work.
- Limiting the use of fixed term contracts for the same job to a maximum of 2 back to back contracts for a maximum aggregate term of 2 years.
- Including superannuation as a National Employment Standard so that workers’ superannuation entitlements are better protected and can be pursued as a workplace right if underpayment occurs.
- Making wage theft a crime but not overriding current legislation in States of Territories (it is currently a crime in Victoria).
- Consulting on the development (where practical) of portable entitlement schemes for Australians in insecure work.
- Legislating 10 days of paid family and domestic violence leave for full-time employees (pro rata for part-time employees) extending the recent decision by the Fair Work Commission to award-free employees.
- Legislating to require employers with 250 or more employees to publicly report on their gender pay gap and to abolish pay secrecy clauses and implementing all 55 recommendations of the Respect@Work Report
- Strengthening the ability of the Fair Work Commission to order pay increases for workers in low paid, female dominated industries.
- Reforming employment practices in the federal public service by only using non-permanent employment where it is essential and reducing the incidence of labour hire, outsourcing and back to back contracts.
- Introduction of a Secure Australian Jobs Code as a criteria for performing government funded work and government procurement.
- As expected, Labor will abolish the Registered Organisations Commission and the Australian Building and Construction Commission which were both primarily established to regulate unions and penalise unlawful behaviour by unions and officials.
So, there is a lot in all of this and there are major structural and commercial implications for businesses in a number of areas. In the months ahead, we will unpack these policies in more detail and keep you posted on developments.
Any questions can be addressed to us at enquiries@ridgelinehr.com.au or on 0438 533 311.
Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094
