Human Resource Management
Recently, with the heavy rain from Cyclone Debbie, the Queensland Premier announced that people should go home and stay indoors particularly on the Thursday afternoon when the rain was going to be at its heaviest. With vivid memories from the 2010/2011 floods, many workers heeded this and left work to go home. It was reported last week that the Moreton Bay Regional Council Mayor advised his staff, after the fact, that if they had gone home on the Thursday they needed to take that time as recreational leave. As I am sure you can imagine, this has not gone down well with his staff and, generally, the wider public.
Human resource management 101 tells us that if you look after your people, they in turn will look after your business providing, generally, more productivity than they are paid for. It is important that your staff feel valued and appreciated to maintain productivity and output for you.
In the case of the Moreton Bay Regional Council, to just put all that day’s leave to emergency leave would not be a hard stretch and the staff would feel the organisation cared about them.
You see, I believe that a business’s people are its greatest asset. Unlike computers and machines, people can think for themselves and bring, in many instances, multifaceted input to a business, not just the skills and knowledge that the job they do requires.
Fostering a negative culture towards staff results in high turnover, work to rule and generally a very poor image for the business with customers (sorry everyone, but if your people are not happy they are happy to tell others).
Generally, it costs 1 ½ times a person’s salary to replace that person. Downtime whilst you recruit a replacement, the time it takes to recruit, potential loss of productivity whilst someone else does the work and not their own, as well as, training and induction of the new employee into the job until they come up to speed, all contributes to the cost of turnover.
A work to rule culture also stifles productivity and output. In this circumstance, employees are only committed to doing the hours and work they are employed to do and in many situations simply stop working when the day is over or it is smoko or lunchtime.
Also, remember your people are your marketers too. Recruitment is a marketing tool for your business so if your people are not happy, then you gain an image of not being a very good place to work.
There are many simple and, in some instances, no to low cost ways to show your people that you value them and their contribution to your business – here are two previous blogs to help – Recognise and Reward your Staff with NO BUDGET / Low cost Staff Reward and Recognition Initiatives
After some two years of consideration, in a landmark ruling by the Fair Work Commission, Sunday and public holiday penalty rates have been cut for the hospitality, fast food and retail sectors.
Full-time and part-time workers in retail will have their Sunday penalty rates dropped from 200% to 150% of their standard hourly rate, while casuals will go from 200% to 175%.
For hospitality employees, there will be a reduction in Sunday pay from 175% to 150%, while casuals’ pay in this sector will remain unchanged.
In the fast food industry, full-time and part-time staff will see rates drop from 150% of base rate to 125% on Sundays and Casuals will drop from 175% of the base rate to 150%.
For many years now employer advocates have been pushing for a reduction to penalty rates on Sundays on the basis that they are too high and have no place in a 24/7, seven-day-a-week economy. They have gone on to argue that these penalty rates have penalised some businesses’ trading as they have made it prohibitive to open on Sundays and public holidays, thereby leaving them unable to compete with larger businesses and chains.
The unions argue that the penalty rates should remain as compensation for people to give up time with loved ones to work on Sundays and public holidays.
So will this cut result in more businesses trading on Sundays and public holidays or has the Commission not gone far enough?
Did you know that at least 18% of Australians work in their pyjamas when they work from home – more than any other nation.
So if you deal with a client who works from home make sure you give them a call before dropping in or be prepared to face the consequences!!
But on a more serious note, if you are considering the option of working from home be aware that it is not for all people. It sounds great, but unless you are very disciplined and well organised it can lead to disaster.
There can be many distractions that you think you can handle without too much hassle, but in reality it is not that simple.
Working from home maybe one of those things that you want to try before jumping in the deep end. It can work and be very enjoyable, but you need to look at it from all angles.
- If you have or need clients to come to your workplace how do they feel about it?
- Can you separate home from work hours; that is instead of giving you a more balanced lifestyle would it in fact take the balance away.
- Do your clients understand that simply because you work from home does not mean you are available 24 hours a day seven days a week?
- How do you feel about the isolation of working from home?
- Are you the kind of person who is energised by the interaction with colleagues and the social aspects offices provide?
The other key areas to consider, when considering working from home, are the taxation, other legal/regulatory requirements and insurance/workplace health and safety implications. I hear many comments from people who work from home about what they think they can claim in tax, relying on home insurance coverage even though they are operating a commercial business, not realising some local councils have strict rules on home base businesses etc etc. It is imperative professional advice is sought, before setting up a home base business, from an accountant, lawyer, the local council and insurance broker (to name a few) to get the facts and make sure all the right things are in place and no nasty surprises arise down the track.
If you are considering working from home, take the time to talk to a number of people who have done it or are currently doing it and ask them for honest feedback as to what the benefits and downsides are for them so your decision can be well informed.
The cost to your business to replace staff is around 2½ times their salary. By example, if you need to replace an administration officer on $40k per year salary, the cost to you could be around $100K.
That’s ridiculous I hear you say … well consider the following which contribute to the costs:
- direct costs to recruit (eg, recruitment agency fees, advertising fees etc)
- salary costs to undertake the recruitment process (ie, salary of the person/people who will take calls from potential applicants, read applications and shortlist, undertake interviews and referee checks etc).
- productivity cost having staff focused on the recruitment activities rather than regular duties.
- productivity cost of other staff who have to pick up the work of the vacant position whilst recruitment process is being undertaken (this could include overtime costs as well).
- costs associated with inducting/training the new staff member in their job and associated processes.
- IT costs of setting the new staff member up in the system etc.
- productivity cost whilst the new staff member is coming up to speed on their job until they are at peak productivity (research suggests this could be anywhere between 4-12 months).
When you look at the costs in this light, I suggest it highlights the need to look at ways to foster an environment where employees want to stay.
Employee retention refers to the ability of an organization to retain its employees. Employee retention is a business management term referring to efforts by employers to retain current employees in their workforce.
Retention does not mean keeping an employee by obliging them to stay so it should not be costly for the company. Retention means encouraging the employee’s free choice to maintain his/her relationship with the company. Conversely, retention is not about keeping everyone all the time at any cost. This would require too much money and energy. Certain criteria must be introduced, such as measuring competency, performance and engagement in order to know which employees to keep. Your methods must depend on the level of the commitment of the employee.
The most commonly used method of retaining employees is without doubt remuneration, with different systems of financial or non-financial bonuses that become part of a “global remuneration package”. The list is long but it includes bonuses, super and non-super benefits, and stock options. Policies that are solely based on the accumulation of financial bonuses don’t differentiate between employees.
Businesses can also utilise reward and recognition systems to re-enforce value of employees. For these systems to be effective, they must be transparent, equitable and fair otherwise you can experience the opposite effect resulting in disgruntled employees and a toxic culture.
The following Retention Questionnaire published humanresourcesmagazine.com.au (2006) is a great start to understanding where you, as a business owner, are at in your approach to staff retention. Take some time to answer the following questionnaire in order to get an indicative feel for the capacity of your business to keep its employees engaged. The following questions are simply an indicator of commitment to retention.
- My company is well regarded by people looking for work and employees say flattering things about their job.
- I have an employee-centric culture that values internal customers as much as external ones.
- My employees have ample opportunity to understand how their work contributes to the bottom line of the company.
- I provide my employees with opportunities for growth and development.
- I provide a comfortable, safe work environment and I have a good reputation in the community.
- My leadership is accessible and provides vision and direction.
- I care for the wellbeing of my people by making employees’ lives easier and less stressed.
- I know how much it costs me to replace every employee who resigns/needs to be replaced.
- I know the reasons for these departures and the difference between an avoidable and an unavoidable departure.
- I know why employees stay or leave my company and what keeps them engaged.
- The rate of turnover in my company is lower than the average in the industry.
- I spend more time and money on my retention program than on recruitment.
- Salaries and bonuses are linked to performance or the development of competences.
- Our managers are trained to select, identify, guide, coach, reward and retain their people.
- I know my job forecast and professional development plan for the next two years.
- My employees are aware that they are an ‘asset’ in which one needs to invest and not a ‘cost’ to reduce.
- I use a job satisfaction or engagement survey in order to understand the requirements of my employees.
- I know who the talented employees in my company are.
- I think that my company does what is needed in order to retain its valuable employees.
- I regularly measure the effect of my retention strategy.
How many did you tick?
Under 5: You are regularly in the job market and finding it increasingly difficult to attract staff. Either you are challenging established thinking that a salary and a job are enough to motivate your employees or perhaps you have turnover rate of zero, so retention is not a priority for your company?
But let’s take a moment to think about the following: For your birthday, which present from your partner or spouse would give you the most pleasure? A cheque or a gift appropriate to your hobbies? The cheque would be easy and practical, but is not what one would expect to receive from a close family member. In this case, why do you as a company systematically use this method? It is time to research the individual satisfaction and personalised retention?
Between 5 and 10: The retention practices of your company are largely inspired by the concept of ‘the carrot and the stick’ and are centered on financial reward and Friday drinks. But you recognise that this mass motivation, used to obtain better productivity has reached its limits. Retention is not about “one size fits all”.
Between 10 and 15: You are conscious that your employees are as important as your clients and that you need to concentrate on the former to assure satisfaction of the latter. You know what is at stake with retention and you are committed to answer your employees’ demands in a culture of engagement. Excellence is on its way!
Between 15 and 20: You are an employer of choice and everybody should know it.
If you are finding your staff turnover is too high and would like some help to improve the situation, call me today (3264 4783) … I can help!
I have suggested in a previous Blog ways to reward and recognise staff’s awesome contributions that require no Budget. On the journey to being an Employer of Choice you may be in a position to utilise some other initiatives which are low cost.
To help you further, here are some low cost suggestions to show your world beater staff they are noticed and valued:
- Movie Tickets.
- Gift Certificates or vouchers.
- Book of Stamps.
- A framed memento/letter/certificate.
- Inscribe a favourite book as a gift.
- Balloons decorated with appropriate messages.
- Purchase a plant or flower arrangement with appropriate message.
- Buy the person something to use in his/her hobby.
- Lunch-on-me coupons.
- Take the person to lunch as a form of thanks or to mark a special event.
- Doughnuts, bagels, or rolls as an early morning starter.
- A “funny” trophy that is passed among team members based on “inside” criteria. .
- Submit the person’s name for a Wall of Fame award. This will result in a one-time increase on their pay.
- Something engraved with the person’s name, such as a pen set, business card holder, plaque, or portfolio.
- Paid subscription to a professional magazine or newsletter.
- A small contribution to their favourite charity in the person’s name.
- Time-off; full day or half-day.
- If your business is real estate (with sales people running around) or a hot factory, how about iceblocks in the freezer to cool your people down.
- During winter to warm staff up, add some chocolate milk mix in the kitchen for hot chocolates.
- A small box of lollies or chocolates with a thank you card.
Talk to Sally (Balanix Solutions) today for more assistance towards best practice Human Resource Management in your business – (07) 3264 4783.