BusinessDesk is proud to publish The Reset series, made in association with our trusted commercial partners and designed to supercharge your business in 2021. In this article, Sylvie Thrush Marsh, head of advisory at online consultancy MyHR, looks at why having strong HR systems is a foundation of successful business.
The economic turbulence and uncertainty created by the covid-19 pandemic has put many companies’ people, payroll, and leave-management processes to the test.
Businesses without robust systems have found themselves exposed to increased legal risk because they cannot effectively manage compliance with employment legislation.
Last year, MyHR supported more than 200 businesses to downsize, temporarily reduce wages, and manage the government’s lockdown requirements. Obviously, this was stressful and disruptive for everyone involved, but by ensuring that proper procedure was followed in each instance, these companies avoided any negative blowback.
So, how can you ensure your firm isn’t in the firing line from disgruntled employees or government regulators?
Your employment decisions will be scrutinised
Over the last four or five years, we've seen an increased employee appetite for legal action against employers, and the costs to employers who lose have been increasing year on year.
In the wake of covid-19, the caseload of the Employment Relations Authority (ERA) has doubled from 2019 levels, as upset and worried employees take personal grievance claims against their (ex-) employers.
Added to this is the fact the Ministry of Business, Innovation and Employment (MBIE) and the Ministry of Social Development (MSD) are now auditing companies that received the government’s covid-19 wage subsidies.
So, it’s clear that your employment decisions and processes will be under increased scrutiny in the coming year.
Getting decisions right in a rapidly changing environment
When covid-19 arrived in New Zealand, the government responded by taking significant steps to manage the country’s public and economic health. These included wide-reaching national (and local) lockdowns, preventing the majority of businesses from trading and throwing thousands of business owners into difficult employment straits.
In such extraordinary circumstances, business owners and managers without a firm grasp of employment law could have been forgiven for thinking that “all bets were off” and that they could respond with extraordinary measures.
However, at no point did the government relax or remove employment obligations, so many businesses landed themselves in hot water because they skipped important consultation requirements and went straight to making decisions about jobs, pay, and hours without their employees’ input.
All this could have been avoided with well-trained, supported managers who knew the legal landscape and how to meet their employment obligations. Those with such expertise and oversight were able to consult their employees even within the tight time restrictions created by the March and August lockdowns and the resulting economic uncertainty.
Towards the end of 2020, three MyHR clients (who both received the wage subsidy and reduced either working hours or staff numbers) were audited by MBIE and MSD and passed with flying colours. Across hospitality, FMCG, and early childcare, each MyHR client was able to successfully navigate the government’s requirements around wage subsidy application, payment, and management of their ongoing obligations to their employees.
This illustrates the necessity of having effective people systems and expert HR advice to ensure every decision you make is well considered and legally sound.
Steps you can take to ensure you’re on firm ground
All companies need to comply with employment legislation, regardless of the fiscal health of the business or the state of the wider economy. Failing to do so puts you at serious risk of costly and time-consuming legal action. Not knowing the law or having outdated systems or haphazard people management is no defence.
You need to ensure all your employment documents are up to date; that includes every employment agreement and job description, and your organisational chart. These documents provide management with a clear picture of the business, and if you need to make changes, you clearly understand everyone’s terms of employment.
Any restructuring should be backed by solid commercial justification, and the rules relating to acting in good faith, following a fair and reasonable process, and holding consultations with affected team members should be strictly adhered to. Find out more about getting the restructure process right.
What to do next
Don’t put your business at risk. Expert guidance, software, and resources can make life much easier.
MyHR’s Implementation Programme for new clients involves dedicated training components for managers and businesses, ensuring that your people are informed and well prepared to respond to any future challenges (including potential lockdowns in New Zealand).
The Implementation Program also involves a full Health Check on your employment agreements, job descriptions, HR policies and processes, so that you can face 2021 with the peace of mind that your compliance and employment documentation is fully up-to-date.
The low monthly subscription cost means access to the easy-to-use HR platform alongside experienced HR consultants. You’ll be supported to manage your business, and any HR issues won’t cost the earth.
Book a demo with one of the team to learn how MyHR can support you and your team in 2021.
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