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Employing Staff

Choosing and keeping the right people is central to the successful functioning of your business. Objectives should be set which will ensure that conditions are created and maintained to provide profitable and efficient use of your personnel.

Key Issues

Recruitment - this means advertising vacancies in a variety of ways and providing adequate information to prospective employees. Advertising in local newspapers is an excellent method of attracting applications to job vacancies.

Consider the skills, qualifications and experience required to do the job. Separate these into "essential" and "desirable". This will help in selecting the best applicant for the job.

Contact your nearest Job Network office or the website at www.jobnetwork.gov.au and find out what assistance you may be entitled to.

Another option is to use a private employment agency. Private agencies typically charge between 10% and 15% of the employee's first year's salary as a fee.

Selection - the basis of selection is fact finding, either by asking questions or by requiring applicants to demonstrate the skills they claim they have, such as operating a particular machine. Prepare an outline for the interview but be flexible about it. After you have made a short list, check references and send an offer letter to the successful candidate. Inform unsuccessful candidates as politely and as soon as possible.

When commencing a new employee, make the first three months of employment probationary. During the probationary period, the employee should be assessed and, if unsuitable, either retrained or, where appropriate, dismissed.

Better Business Tip

A practical interviewing tip to help you get the best employee possible: avoid hypothetical questions such as "How would you (deal with ...)?" and replace them with specific questions such as "How have you (dealt with ...) in the past?" A real example of an action is a far greater indicator of performance than an imagined guess.

Training the New Starter - informal on-the-job training is probably the most common training method used, except for highly skilled or technical positions. Formal training should also be considered once employees are established.
Don't forget about inductions once you have selected the new employee.

Now that you have the right people working for you, you need to ensure they are happy by continuing or increasing their motivation. High staff turnover is very expensive in a small business.

Motivation - employees remain motivated when the employer: takes an interest in their development; cares about their safety/health and general wellbeing; treats people as people not as numbers on a payroll; and sets joint goals and objectives so that employees know what is expected of them.

Better Business Tip

Don't ignore your best employees by focussing your attention on those who are struggling. You might think this is a wise way to invest your time and that your talented staff don't need your direction. But not investing time with your best staff will leave then feeling unmotivated and unappreciated. Your job is to motivate, guide and inspire your best staff to produce fantastic results. Getting bogged down with struggling staff will at best bring your organisation to an all round "average".

Tips for Good Staff Relations

Better Business Tip

Think about setting up a formal employee performance review system in your office. If you've ever been an employee you'll remember how hungry you were for management feedback. The review process will create a structure with specific points to cover where you'll be forced to communicate with your employee about how they're doing. Make sure you're prepared for a two-way review though! Perry Ure can assist you to create a formal review process.

 

Some General Guidelines

Wages - the majority of employees in Australia are protected by legally enforceable minimum wage rates, and are generally entitled to equal pay for work of equal value.

Awards - industrial awards are work codes which establish conditions of work such as minimum wages, hours of work, overtime, holidays, minimum periods of notice and other conditions such as safety requirements. Different industries have different awards. It is important to understand the awards pertaining to each position in your business. For more detailed information on specific awards contact the Award Enquiry Service on 131628. For pay rates on common awards, visit the Department of Industrial Relations' website at www.dir.nsw.gov.au

Hours of Work - the standard working week of most employees is 38 hours in a five day week, and usually all time worked in excess of the standard hours or outside the prescribed time must be paid for at penalty rates. Refer to the relevant award for the details applying in each case.

Paid Leave - generally staff are entitled to a minimum four weeks paid annual leave, but this can vary according to different awards. A loading on holiday pay of 17.5% or more is prescribed in many awards and most employees receive 10 or more public holidays per year.

Generally employees are entitled to one week paid sick leave per annum. However, details of entitlements vary so it is essential to refer to the relevant award for the details applying in each case.

Notice of Termination and Severance Payments - a number of awards may contain specific reference to the period of notice of termination and also the level of severance payment based upon years of service.

There is also legislation governing what is lawful or unlawful dismissal. Employees unlawfully dismissed may be entitled to claim for reinstatement or damages (in the form of financial compensation). It is, therefore, worthwhile to seek advice before proceeding with a dismissal.

Anti-discrimination Laws - in NSW it is generally against the law for you, or any of your employees or agents, to discriminate against or harass job applicants, employees, or those you provide services for, on the basis of their (or any of their colleagues', friends' or relatives') sex, pregnancy, marital status, race (including colour, ethnic background, descent, national identity and ethno-religion), homosexuality, disability, transgender or age.

Trade Union Members - union membership is not compulsory in Australia, but some awards give preference to union members.

There are a number of compulsory requirements to be aware of when employing staff.

Safety and Workers' Compensation - minimum standards exist for physical working conditions to ensure occupational health and safety (OH&S). It is compulsory for all employers to insure for workers compensation liability.

Anyone employing others must obtain an insurance policy that covers the full amount of the employer's liability under the Workplace Injury Management and Workers Compensation Act 1998 and the Workers Compensation Act 1987 in respect of all workers employed. Penalties for failure by employers to take out workers compensation insurance were increased from 1 January, 1996, including the introduction of imprisonment for up to six months as a penalty option under Section 155 of the Workers Compensation Act 1987. You are liable for all workers recognised under the law for workers compensation. Contact the Workcover Authority for more information on 131050.

Superannuation - for specific details on your obligations, contact your Accountant at Perry Ure.

Pay-As-You-Go (PAYG) - from 1 July, 2000, the Pay-As-You-Go (PAYG) system replaced the PAYE system.

Under the PAYG system business receives a single tax statement providing a business's total net tax payable (or refundable) across a range of business taxes.

In practical terms, the PAYG system is comprised of:

The PAYG return form is the same Business Activity Statement (BAS) which is utilised for GST.

Wages Book - the law requires that every business must keep wages records if the business has any employees. There should be a record for each employee showing details of all wages and deductions, as well as the "take-home" amount.

Pay Slips - all employees must be provided with pay slips. These must include the employee's name and classification, date of payment, dates relating to pay period, gross pay (including overtime), tax deductions and particulars of all deductions, including employee superannuation contributions and net pay.

Enterprise Agreements - these are agreements between the employer and employee(s) to settle their own working arrangements away from centralised controls. Agreements are to be registered with the Industrial Registrar who ensures minimum conditions are met. For more information contact the Department of Industrial Relations on (02) 9243 8888.