5 EOFY HR Questions for Small Business
As the end of financial year rushes towards us, Small Business owners are bombarded with a to-do list as long as their arm. But it is essential to think about your human resources as you plan for the next 12 months.
Here are the top five HR questions for Small Business we are asking our clients this month.
1. Have you benchmarked your employee salaries against the award in the last 12 months?
Effective July 1st, 2021, the minimum wage will increase by 2.5% to $772.60 per week. This increase will be rolled out in stages this year and apply to award rates effective from either 1 July 2021, 1 September 2021 or 1 November 2021, depending on your award. If your business is subject to an award (and the majority of small businesses are), 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 that 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.
2. When is the last time you reviewed the classifications of your staff?
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 is now working 40 hours a week and exclusively. The Casual employee that started working variable hours now works the same hours and shifts every week.
Both scenarios are red flags that the way you initially engaged these staff may no longer survive scrutiny from Fair Work.
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 make sure 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 up from scratch tomorrow. It can assist you to move from thinking about what your current staff can do to what the business really needs for the future.
4. When is 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 is 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 their contribution to your success. A small cost of living increase every year 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 what the market rates are for your industry. If there is a shortage of skilled people, you want to ensure that your employees feel valued and so they aren’t enticed away by your competitors.
It is easy to become complacent when it comes to managing your staff when you are 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: June 2021