While the growth of your business is an exciting and rewarding time, it can also be extremely daunting for employers that are ill-informed as to the necessary changes to move from a small business to a medium-sized or large business.
Along with managing the increasing complexities to fund growth, the effect on cashflow and balancing stakeholder needs, your human capital risk grows exponentially.
Ralph Waldo Emerson said “nothing great in life was ever achieved without enthusiasm” and I couldn’t agree more. But as I highlight below, enthusiasm alone is not enough.
Termination of Employment
It’s much easier to justify the termination of an employee on “reasonable business grounds” in a smaller business, as there are generally limited roles to redeploy the employee or there are frequent changes in the operational requirements of the business, such as peak and trough periods. Additionally, smaller businesses are not required to provide redundancy pay.
Therefore, as your business grows the termination risks associated with a “genuine redundancy” and financial burden of making employees redundant increases.
In terms of unfair dismissal parameters, if a person has not been employed as a full time, part-time or regular casual employee for 12 months or more then the employee cannot make an unfair dismissal claim. However, in a large business, this time period reduces by half.
This is particularly important for businesses where there is a sole manager for a growing team ‚Äì not only is your time stretched as to how much one-on-one time you can spend with employees to evaluate their performance, you also have a smaller time period to decide whether their performance is suitable for the business before that employee can claim for unfair dismissal.
Work Health and Safety
It stands to reason that the more employees your business has, the higher the probability of an injury or incident occurring in the workplace. The WHS legislation has been structured to reflect this, meaning the number of first aid officers required in the workplace is based on the number of employees.
Regardless of the number of employees a business has, the manager/employer in question is considered a PCBU (Person Conducting a Business or Undertaking) and has a legal obligation to control risk in the workplace to the best of their abilities.
Legislation dictates that the “cost of eliminating / minimising risk” is taken into consideration when deciding what is “reasonably practicable” for a PCBU to do. Therefore, as your business grows, it will become less and less acceptable to use “cost” as an excuse for not putting in place health and safety precautions.
Businesses with less than 100 employees are legally not required to report to Workplace Gender Equality Agency, however are still able to access the Agency’s education and incentive activities.
Keep in mind that a small business which promotes equal employment opportunity in line with larger businesses may use it as a selling point for potential employees, over a larger business that simply promotes equal employment to the legal minimum requirement.
When deciding to grow your business, it is crucial to seriously consider the impact such a move will have on your legal and ethical obligations. While it shouldn’t deter you, you do need to be informed and prepared for what impact the growth will have on the operations of the business in the future, in particular, your employee engagement.
At the end of the day, it is the tireless work and enthusiasm of the people you surround yourself with that will ensure the success of your business, so as a business leader, you owe it to your employees to first and foremost consider how changes to the business will impact upon what they do.
Lyndell is an experienced human resources generalist who thrives on ensuring her clients receive the pragmatic HR support they need to hatch, match and dispatch. She is the CEO of performHR, an Australian organisation that works with small to medium businesses across a wide range of sectors including retail, professional services, finance and insurance, manufacturing and engineering sectors, community housing, aged care, disability services and franchising.
She leads a team of dynamic and energetic employees who strive to provide pragmatic HR solutions in a timely manner, packaged and delivered to ensure that it meets business objectives; always balancing legal obligations and ethical aspirations. Please feel free to contact her if you have any HR needs or visit the performHR website.