Why you should outsource your HR

While most large companies have an in-house HR team, this isn’t always viable for SMBs, so outsourcing your HR might be the ideal solution.

It can free up your time, and help you to protect your business into the future – without breaking the bank.

For more important reasons to consider outsourcing your HR read this interesting article from Lisa Spiden at Dynamic Business:

"As a business owner, dealing with your business’ HR needs can be time consuming, and not having the right knowledge and understanding of HR issues can lead to potential legal problems and penalties for your business.

While most large companies have an in-house HR team, this strategy isn’t always viable for many SMBs, even though they face the same issues when it comes to recruiting employees, dealing with disputes, and developing, recognising and rewarding employees.

If you don’t have the scope to employ a HR person, outsourcing your HR might be the ideal solution. It can free up your time, and help you to protect your business and your employees into the future – without breaking the bank.

HR outsourcing companies can take on a wide range of HR-related tasks for your business, including recruitment, dispute resolution, and compliance.

Here are some of the reasons why you might want to consider outsourcing your HR:

Ensure compliance with employment legislation
The law surrounding employees is complex and often subject to change. It is difficult to keep up with the current legislation, while also focusing on running your business.

Professional consultants at HR outsourcing companies understand best practice, and can help make sure you avoid non-compliance, and the resultant disputes and penalties.

Save time
Recruiting, managing staff issues, ongoing development and rewarding of staff members can be extremely time consuming, and many business owners don’t have the time to devote to these tasks.

If you are better spending your time working on your core business, outsourcing your HR is a sensible decision that can allow you to focus more on the things that you do best.

Save money
By improving the efficiency of your HR practices, you can streamline processes and help reduce your costs. Recruiting new employees can be costly, particularly if the employees you hire aren’t the right fit for your business, or the role.

Using the services of an HR outsourcing company means that you have a better chance of getting the right employee first time.

Build a competitive advantage
Many HR companies are capable of developing training programs for employees, and are available to help with performance management and feedback.

Effectively managing employee performance can build loyalty, and help keep your employees motivated, engaged and working more efficiently. This can in turn help your business build a competitive advantage, and can give your employees access to skills and knowledge that they would not otherwise have.

HR is a complex area, and while you might not need a full team of HR professionals, you can get valuable assistance when you need it by outsourcing."

Link to original article.

1 July 2013 - Changes to superannuation

From 1 July 2013, the super guarantee rate is going up from 9% to 9.25%. This will increase to 9.5% from 1 July 2014 and continue to rise each year gradually over 7 years until it reaches 12% from 1 July 2019.

If you were making super payments at the minimum 9% rate, you need to adjust payments to the new rate from 1 July 2013.

Superannuation is paid on top of the minimum entitlements in the award or agreement that applies.

Can an employee’s pay be reduced to cover the superannuation increase?
Employees can’t be paid less than the minimum wages that apply to them.
If an employee is paid more than their minimum entitlements and if their employer wants to reduce their wages to compensate for the increased super rate or for any other reason, the employer should seek independent advice from a lawyer or their employer association.

Changes to pay slip requirements
There are also changes to the information that needs to be included on pay slips. From 1 July 2013, employers will be required to give additional information about the superannuation contributions they have made or will make for the benefit of their employees.

Start date	Super guarantee rate
1 July 2013	9.25%
1 July 2014	9.50%
1 July 2015	10%
1 July 2016	10.50%
1 July 2017	11%
1 July 2018	11.50%
1 July 2019	12%

Real Life Case Study - Performance review process

Continuing our series with real life examples of End2end Business Solutions success stories - 

One of our clients has recently undertaken a new performance review process which has been underpinned by having the 'right' conversations with staff.  

The system is a simple management by objectives (goals), with a key focus on the “having the conversation” rather than focussing on the forms and paperwork.   The staff were very excited about the introduction of the new process, as previously there had not been consistency in the review process; and the management team were also very supportive of it.

As part of the review process, the directors/owners of the business were also reviewed based upon the operations aspect of their roles.  Initially there was concern amongst the director’s, however, once the process was completed they appreciated the concept of focussing  on, and reviewing their current period achievements, and identifying the goals to focus on moving forward.  

Remuneration and development requirements also formed part of the process, and increases and bonuses were paid accordingly.   A customised training plan for the company is now being developed to be implemented as an ongoing program for all staff. 

The review process also included End2end Business Solutions individually coaching the managers, to train and give them confidence in “having the conversation” regularly with their staff.  A large number of the staff receive their bonuses monthly or quarterly,  and now the managers have the tools and system in place to have these conversations regularly,  so that there is consistency and employees know exactly what is expected of them.   The managers are finding that the more they have ‘the conversation’, the more confident they are becoming in conducting the review process.

The outcome of the new review process has been greatly improved morale, as employees are seeing the benefits of the review and of the company implementing resulting changes.

What is Sham Contracting

Sham contracting is when an employer tries to disguise an employment relationship as an independent contracting arrangement. This is usually to avoid paying legal minimum rates of pay, tax, and entitlements, such as annual leave and sick leave. Arrangements such as these are not genuine and may be regarded as sham contracting.

Employers should be careful to avoid sham contracting. Just because a worker has an ABN or invoices for payment doesn’t automatically mean they are an independent contractor. Calling someone an independent contractor or getting them to sign a contract saying they’re an independent contractor doesn’t automatically make them one either.

Sham contracting arrangements are unlawful under the Fair Work Act 2009 (FW Act).

Employers should be warned – currently the courts are cracking down on sham arrangements and employers will be penalised if they contravene the legislation. It doesn’t really matter what name you give the relationship with your workers, or what type of contract you have; the courts will look at how that relationship works in practice, and impose heavy fines if you short-change your workers.  

To avoid corporate and/or personal liability, company directors and other senior managerial staff must ensure that they act within the scope of the law in their employment arrangements and that they are properly advised about any contracts in question.

Employers can avoid a contravention of the sham contracting provisions if they can show that they did not know that it was a contract of employment, rather than a contract for services and must also demonstrate that the intention was not reckless.

MINIMUM WAGES INCREASED BY 2.6% - 1 July 2013

Effective July 1, Australia's 1.5 million minimum wage workers are set to receive an additional pay raise of $15.80 per week, a 2.6 % increase over their existing wages.

The effect of this increase will see the National Minimum Wage increase from 1 July 2013 to $622.20 per week, or $16.37 per hour.

Employers should also note that the minimum rates of pay within all Modern Awards will also increase from the first pay period on or after 1 July 2013.

What this means for employers:

1. Employers who pay above National Minimum Wage are not obliged to increase their rates of pay, but should make sure that they will not actually be underpaying employees once this increase is applied;
2. Employers who pay their employees at the National Minimum Wage will need to apply the increase in the first full pay period on or after 1 July 2013; and
3. Employers who pay under an enterprise agreements should ensure that those base rates are at least equal to or more than the respective increased minimum rates.

The 2013-14 wage rise is small compared from the 2012 pay hike, due to the country's below trend growth as well as the coming superannuation rise. Although less than what minimum wage workers wanted at $30 a week, it was still more than what the business groups said they can afford at only $5.80 a week. In line with the Federal Government’s submission, the increase does take into account “changes in living costs and the economic environment”.

For more information or assistance in assessing its impact on your business, please contact Annette at End2end Business Solutions on 02 8977 - 4002