The Importance of Staff Retention

Many companies are now beginning to view employee retention as a critical issue. High Employee turnover increases expenses and can also have negative effects on company morale.

Implementing strategies devised to retain good workers can help counterbalance replacement costs and reduce the indirect costs associated with high staff turnover such as lost clients and loss of morale.

Employee retention has become an important topic for many reasons.

These include:

• Social media networking tools such as LinkedIn make it easy to observe new job opportunities or get poached by another company
• Costs associated with hiring new staff, advertising, interviewing and hiring etc.
• Training new staff
• Loss of productivity. It can take up to 2 years for a new staff member to reach the same productivity levels as existing staff members
• Loss of engagement. Retained employees who see a high turnover often get disheartened and lose engagement

The longer staff stay with an organisation, the more productive they get .They get to know the systems, products and learn how to work together as a team.

Many high performing companies have loyal employees and each company has its own strategies for retaining their employees.

Some of the interesting things to consider:

• Compensation is a factor but does not play as big a role as you would think. Over-compensation will not offset a poor work environment
• Job fit is significantly important. Hiring the right people for the right positions by realistically advertising job positions will save you a lot of trouble in the long run. If you oversell a job you can suffer from high staff turnover. Effective retention strategies often begin during the employee recruitment process. Employees are more inclined to remain with a company that fulfils the promises made when their employment offer was extended. Companies that provide a realistic view of their corporate environment, advancement opportunities and job expectations to new hires can positively influence employee retention
• The work environment and culture matter. Staff want to feel appreciated, comfortable and included in their place of work. Employees that enjoy what they do and the atmosphere in which they work are more likely to remain employed with their company

Implementing an employee retention program is an effective way of making sure key workers remain employed while maintaining job performance and productivity.


In the end the most prosperous organisations are those that respect their employees and invest in building an engaged work place environment.

How much notice must you give before Dismissing an Employee?

When an employee is being dismissed, notice must be given. The notice starts when the employer tells the employee that they want to terminate the employment. Notice ends on the last day of employment.

The length of notice an employee must be given is determined by how long they have worked for you and their type of employment. If someone has worked for you continuously for over one year but less than three you must provide a minimum of two weeks’ notice.

An employer must give the following notice periods when terminating an employee;

• Less than 1 year’s employment - 1 weeks’ notice.
• 1-3 years employment - 2 weeks’ notice
• 3-5 years employment - 3 weeks’ notice
• Over 5 year’s employment – 4 weeks’ notice.

An employee is entitled to receive an extra week of notice if they are over 45 years old and have worked for the employer for a minimum of 2 years.

Sometimes an award, registered agreement or employment contract can specify longer minimum notice periods.

If a registered agreement has been put in place, check the terms of the agreement for the correct amount of due notice.

The minimum amount of notice an employer must provide is determined by the length of the employees continued service with them. Continuous service is the length of time an employee is employed by a business. Service does not include unpaid leave, with the exception of unpaid parental leave which does count as service towards notice of termination.

An employer may provide more notice than they are obligated to in the award, registered agreement or contract. The employee is only required to work out the minimum notice period although they are able to work out the extra notice if they choose to do so.

An employee is entitled to take annual leave during a notice period if the employer consents to the leave.

An employee may also take sick leave during a notice period if they provide notice of the leave as soon as possible and evidence (medical certificate ) if required.

If an employee has used up all of their sick leave they may take unpaid sick leave. They will still have to provide notice and evidence if required.

An employee cannot be forced to take leave as part of their notice period.

An employer can also provide payment as a replacement for notice, which can be equal to or exceed the total amount the individual would have been paid for the required amount of notice.

Redundancy Entitlements Exceptions

There are some circumstances where an employee whose job may have been made redundant will not be entitled to redundancy pay.

These circumstances are:

• The employee hands in their resignation without having an agreement in place with the employer to make a redundancy payment on termination.
• An employee is terminated due to misconduct or other reasons associated with the employees own performance or ability to do the job.
• The employer acquires other adequate employment for the employee.
• The employee has been employed for a period less than 12 months.
• The employee works for a small business. A business is considered to be a small business if the employer has less than 15 staff members.
• The employee had a contract or was employed for a fixed period of time that has come to an end.
• The employee was employed for an identified task or project.
• The employee is a trainee engaged only for the length of the training agreement.
• The employee is an apprentice.
• The employee was employed for a particular season.
• An employee was hired as a casual employee whose casual service is no longer needed.
• In a transfer of employment circumstance where it is proposed to transfer the employee to employment with a new employer.
• The employer is unable to pay the employee. This exception can only apply where Fair Work Australia relieves the employer from their redundancy pay obligations.

It is important to state that in a situation where an employee may not be entitled to redundancy pay, the employer will still be obligated to give notice, unless the employee has resigned or has been terminated due to serious misconduct.

Minimum notice periods.
An employer is obligated to give the following minimum notice periods when dismissing an employee:

Period of continuous service	Minimum notice period
Less than 1 year	1 week
1-3 years	2 weeks
3-5 years	3 weeks
over 5 years	4 weeks

An employee is entitled to an extra week of notice if they are over 45 years old and have worked for the employer for at least 2 years.

An award, registered agreement or employment contract can set out longer minimum notice periods, for example, 1 month as opposed to 1 week.

Employers of Choice

In the past, employers looking to hire the best staff would offer higher salaries than their competitors. Now they are thinking out of the box in a bid to lure staff away from the competition with a range of perks. Some of these perks include paid parental leave and a day off for parents on their child’s first day of school.

A high salary is no longer the most important factor for many workers, many are now desiring a better work/life balance.

An employer who can offer an appealing workplace culture is more likely to attract and retain superior employees. The features of the atmosphere available at an employer of choice support the interests of employees and customers.

Here are some tips for becoming an Employer of Choice;

• Employ people with diverse backgrounds including indigenous and people from other cultures, women, gay and youth.
• Include all staff in management and leadership opportunities.
• Encourage high levels of satisfaction among staff.
• Strive to have a good reputation in the business and the wider community.
• Utilise reward and recognition programs.
• Flexible work practices.
• Career development programs.
• Involve employees in decision making.
• Family-friendly policies.
• Job Security. Employees are better able to concentrate on their goals and work if they are not concerned about losing their job.
• Respect: Your employees should always feel they are respected by their bosses and co-workers.
• Access to Information: Share information about the business with your employees, it will help to make them feel more involved and motivated.
• Work-Life Balance: work-life balance initiatives such as flexible scheduling choices, allow employees to work undistracted by family and life events occurring outside of the workplace.
• A recognisable brand – One which is associated with values that are supported by your company and employees. If a potential employee has not heard of you, they are less likely to consider you  their first choice for work. Ideally you want to attract employees with similar values to your business.
• Honesty and integrity - Treat everyone with the appropriate respect and professionalism that you would expect in return. Employers need to fairly develop and apply policies, treat all employees with the same regard and consideration, and make workplace guidelines clear and enforceable across the board.
• Create a community. Establishing a strong community in your workplace, which is positive and supportive, will provide a sense of belonging that will attract and retain the right people long term.

Unique Recruitment Ideas

If you’re trying to attract your ideal candidates, who already have a job elsewhere, you may have to think outside the box when it comes to your recruitment strategies.

That’s why many companies are embracing creative recruiting.

These recruitment methods can help your business stand out from the crowd and put you in touch with your ideal hires;

•    Handout Recruitment cards: Print out business size cards for your employees with the company name, phone number and website on them and the words “now hiring”.  Ask your employees to keep a stash of these cards on them wherever they go. Whenever they come across someone doing an exceptional job, whether it’s at a café or the cashier at the grocery store, they can hand them a “now hiring “card. Once you have found someone with the right personality or mind set you can teach them the other essential skills that may be needed. You will be bowled over at the great employees you will be able to find from very diverse backgrounds using this approach.

•    Employee Referral Rewards Program: It can be very beneficial to hire someone that has been referred by a current employee. A current employee knows the culture of your company and can sense if a person will be a good fit with your organization and team. Offer incentives to employees to refer others.

•    Billboards: Renting a billboard on a busy road near your location is a great way to inform people that you are currently hiring. Make the imagery fun and memorable to catch people’s attention. Keep the wording to a minimum and make the web address easy to remember so that once people are back at their computer they are able to look up the website.

•    Look for talent in an unlikely places: The Director of Talent Acquisition at Quicken Loans (which is regularly listed in Fortune’s 100 best places to work) believes that the secret to their recruiting success is by looking for great people in unexpected places. For example , the company once organised a ‘blitz’ on local businesses , retail stores and restaurants , asking employees to go out and interact with workers and offer interviews to any that were exceptional or stood out from the crowd. Quicken believes that 'Too many companies focus on industry experience when they recruit... We can teach people about finance. We can't teach passion, urgency and a willingness to go the extra mile.’

Hiring the Best Candidates

Hiring the right candidate is vital for any organisation if they are to thrive. Here are some important tips to help you attract and select the best candidates.

•    Select an appropriate interviewing team.

Senior managers and experienced employers should be involved in the interviewing and hiring process, however it is also good practice to involve the people who will be working alongside the selected candidate .Present employees who are engaged in similar roles within the company will be able to relate to the candidate and encourage them to feel more compatible and involved with the organisation.

•    Prepare fully for the interview.

Relevant questions and criteria should be prepared ahead of time. It is also helpful to determine the interview structure and style before you begin interviewing candidates. You should try to ensure that the candidate talks 70% of the interview and the interviewer only talks for 30% of the time. The interview questions should be based on the job requirements and should not discriminate on grounds of sex or race.

•     Develop an accurate job description.

It is easy to overlook the job description, however in many cases, an applicant can be attracted to a job exclusively because of how the position is communicated. If the job description is not clear enough, it can fail to attract candidates with the right qualifications and abilities.

•    Fully explain the job.

It is important to fully explain the job to the candidate and make sure that they understand what is expected of them. If a candidate is hired into a position they don’t fully understand and their expectations do not match the job, it is likely they will leave soon after being hired. This will mean that you will have to begin the whole recruitment process again.

•     Communicate often.

Make sure to communicate with all applicants frequently throughout the recruitment process. Inform the candidates who are selected, as well as the ones who aren’t, as soon as possible.
When someone applies for a job within your company they are also forming their first impression of you and your organisation and what it may be like to work there.

•      Select a broad range of candidates.

If you shortlist too severely you can end up with only one or two candidates left to interview. You should always have a minimum of three to four candidates left for the final interview. This will ensure that if you do not get your top candidate you will still be left with a few good choices.

•    Follow up.

Once the successful applicant has accepted the position, follow up straight away with the necessary paperwork. Make sure that the salary, probation periods and benefits have been discussed throughout the recruitment process so there are no unexpected surprises for the candidate.

•    Start with a probation period.

Starting a candidate’s position with a probation period allows the manager a chance to test the employee’s skills and talents and gives both parties a way out if the employee is not performing or the job is not what they had expected. Probation periods vary in length but are commonly around 6 months .You may choose to start the employee on a slightly lower pay rate or withhold giving full employee benefits until they have fulfilled their probation period.

Redundancy and Unfair Dismissal

Employees who have been made redundant may still be able to make an unfair dismissal claim against their former employer if the correct procedure has not been followed during the termination process.

Under the Fair Work Act 2009, an employee is unable to make a claim for unfair dismissal in the case of a ‘genuine redundancy’, however what is the difference between a ‘redundancy’ and a ‘genuine redundancy’?

Redundancy occurs when an employer no longer wants a job being done by a specific employee to be carried out by anyone, meaning that the job would no longer exist, or if the employer becomes bankrupt or insolvent.

In order for it to be considered a ‘genuine redundancy’, the employer must follow any consultation requirements in the award or registered agreement before the redundancy takes place. Failure to perform any of these steps may end up in a terminated employee claiming that the redundancy was not genuine and filing an unfair dismissal claim.

If an employer has decided to implement major changes or restructuring that is going to affect employees significantly, the employer must take these steps

1. Notify the affected employee(s) of the proposed changes
2. Discuss the proposed changes with the affected employee(s), including possible measures to reduce the adverse effect on employee(s)
3. Give proper consideration to matters raised by affected employee(s)
4. Provide the affected employee(s) in writing with relevant information about the proposed changes, including the nature of the changes proposed and the expected effect on employees.

Discussions must be held as soon as possible after a decision has been made by the employer to make the intended changes.  Employees are entitled to have trade union representatives present at all discussions and the employers must also confer with the representative.

One unfair dismissal claim involves three employees of BananaCoast credit union Ltd. Their roles were made redundant, but they learned a few months later that their employers had hired workers in very similar positions.

All though they were out of the fourteen day lodgement period, the Fair Work Commission found the employees entitled to make unfair dismissal claims as they were unaware that at the time that their redundancy wasn’t genuine.

Another case in Victoria, Nitro Gym made an employee redundant without following the correct procedures and the employee filed an unfair dismissal claim. Fair Work Act Australia found that the redundancy was not a ‘genuine redundancy ‘and awarded the employee close to $8000 in compensation.