5 EOFY HR Questions for Small Business
As the end of the financial year rushes towards us, Small Business owners are bombarded with a to-do list as long as their arm. But thinking about your human resources as you plan for the next 12 months is essential.
Here are the top five HR questions for Small Businesses we are asking our clients over the next month.
1. When was the last time you benchmarked your employee’s salaries?
On the 1st of July 2023, there will be an increase to both the minimum wage and award rates. The announcement for those increases will be announced in mid June.
If your business is subject to an award (and the majority of small businesses are), you will need to take the time to check that your wages are still above the award minimums. Even if you pay above award rates, an increase may mean you are no longer paying enough to meet the Better Off Overall Test, especially if you incorporate entitlements such as leave loading or penalty rates into your base rate.
For some Awards, this may also mean changes to entitlements such as penalty rates or spread of hours, so it is always good practice to review these areas too.
If you need more tips on how to approach this, our next free webinar on the 28th of June, 2023 will be full of advice. Click here to book.
2. When was the last time you reviewed your employee’s employment status or award classifications?
Contractor v’s Employee. Part Time v’s Casual. Employment relationships can evolve, especially in a fast-growing small business.
The Contractor that started working for you occasionally works 40 hours a week now and exclusively for you. The Casual employee that started working variable hours now works the same hours and shifts every week.
Both scenarios are red flags that how you initially engaged these staff may no longer survive scrutiny from Fair Work.
The same goes for award classifications. Roles evolve over time. Some awards require you to progress employees on their length of service. Make sure you review this at least once a year to ensure you are paying correctly.
3. Do you have the right team for the next 12 months?
Hopefully, you have set clear goals for what you want to achieve in your business over the next financial year. But have you taken the time to think about whether your current staff will help you get there?
As your small business evolves, the skill mix required to deliver your services can change. The skills needed for a start-up phase may no longer be relevant as the business moves to a more sales and marketing focus. You may also need to employ new people to ensure you can keep up with growth.
Unfortunately, many business owners don’t step back to assess what the business needs to move forward. They are more likely to focus on the people they already have. A good exercise is to think about how you would structure your business if you were going to set it up from scratch tomorrow. It can assist you in moving from thinking about what your current staff can do to what the business really needs for the future.
4. When was the last time you looked at your job descriptions?
Once you have worked out what roles you need, you should update your job descriptions to reflect them. Even existing positions will change over time in a growing business.
If you have a firm idea of what each role needs to achieve, you can set clear expectations and boundaries for your employees to ensure they understand what you need from them. Use this process to clarify their roles and get buy-in on where the business is heading.
5. Are you rewarding your existing employees?
When was the last time you reviewed your employee salaries for more than just compliance with the award? Many business owners set and forget when it comes to wages when they are paying above award rates. This may mean it has been several years since their employees received a pay rise.
To retain excellent staff, you need to remunerate them fairly and reward them for contributing to your success. Every year, a small cost of living increase demonstrates to your employees that you value them. If you had a good year, a well-timed bonus is appreciated by the people that helped you get there.
You should also keep an eye on your industry’s market rates. If there is a shortage of skilled people, you want to ensure your employees feel valued so your competitors don’t entice them away.
It is easy to become complacent when managing your staff when busy. Being proactive in the short term can ensure you don’t end up with preventable HR issues down the track.
If you need help to work through these or any other HR questions, check out our HR Services or give us a call on (03) 4216 5200 to see how we can help.
Updated: May 2023