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Dismissing staff is a part of life for fast- Essential ingredient: The Chefs growing companies – the skills these companies Toolbox founder David Mills need from their employees change as they focuses on hiring the right people Staff grow, and small companies cannot afford to carry the non-performers, who can hide in Managing director Jonathan Dutton of the ranks of bigger companies. CIPS Australia, a professional association for “It is never fun to let someone go,” former procurement professionals, says “we need a without investment banker David Mills says. Since he flexible workforce as we go through different started his company The Chefs Toolbox, which stages of growth”. The organisation employs sells kitchenware by party plan, Mills has had to nine full-time-equivalent staff members, and sack four staff. “With two, we couldn’t get the has another 18 part-time staff and contractors. StreSS right behaviour, no matter what we did. With “We grew 78 per cent in [revenue] last year the others, we had a change in requirements.” and 176 per cent the previous year,” Dutton WorkChoices, the industrial relations laws says. “That demands different skills. Without introduced by the former federal government, the [WorkChoices] legislation, taking on a full- allowed small businesses with fewer than time employee is a huge commitment.” 100 staff exemption from unfair-dismissal laws. Dutton says he would employ more staff and Easier dismissal meant easier employment for grow faster if the old regime had continued. small businesses. Fast-growing companies could Because of the changes, he is employing more employ new staff without fear of time-consuming casual staff. “We offer professional part-time or costly challenges if they needed to sack people. jobs: marketing, an education manager, a With changes to industrial relations laws, finance manager and a copywriter,” he says. Fast starters, cautious unfair-dismissal rules are much tighter: companies with up to 15 employees can “We find that women returning from maternity leave want part-time work.” about hire-and-Fire extend probation to 12 months before they must comply with the new laws, governed by Each time Mills sacked staff from The Chefs Toolbox, he paid them more than their Flexibility, are keeping a fair-dismissal code, now being written in consultation with small and big business groups. entitlements. “We would have a cheque ready. The tears dry up then,” he says. “All your a close eye on the new In a downturn, a dismissal is a redundancy and does not come under unfair-dismissal laws. remaining staff watch how you treat people. People on low to mid-levels are not likely to unFair-dismissal laws. BRW Fast Starters companies surveyed felt protected by the WorkChoices unfair-dismissal push too hard, but you don’t want to risk it. We erred on the generous side.” Nicolas Walker report: kath walters rules. Although 68 per cent felt the imminent changes will have no effect on their hiring decisions, the rest have doubts. Expensive senior roles cause fast-growing companies the biggest worries. Being unable to sack a poor performer is what disturbs 68 April 24–June 4 2008 | www.brw.com.au the sleep of Nicson White, founder of the mattress-sanitising franchise Health Protect International. With changes to the laws, White has opted to put his senior staff on contracts. “[The new laws] make you ask the question ‘Why hire?’,” White says. “You can have consultants on a contract basis, and they are working 100 per cent for you and only for you.” White says that being sued for unfair dismissal would probably destroy his fledgling company, which employs six full-time staff and has increased revenue by 230 per cent over the past year. Fast Starters cannot afford to stop hiring, whatever the laws — the prospect of being without enough staff is even scarier than hiring the wrong ones. In a survey of the Fast Starters, 74 per cent said finding staff was the hardest part of starting their business, and 68 per cent said changes to the laws would have no effect on their hiring decisions. Profusion Group recruits executives for the banking and finance sector, and business is booming. But co-founder Rodney Jones has had to recruit from overseas to fill positions within his own company. “Australia is a place where What else people want to come and live and work,” he says. “We find it easier to attract people from governments overseas than from larger corporations.” should do Jones says big companies beat him on the pay and conditions they offer staff. “And staff see • Buy more locally made a move to a smaller company, no matter how products and services strong the brand, as more risky.” Of his 32 staff, • Provide grants for sales four are sponsored from the United Kingdom, and marketing but Jones says the government could make • Make it easier to hire it easier and cheaper. “You have to employ skilled migrants a lawyer, and the process can take up to two • Introduce a world-class months. There is also a limit on the number broadband network of foreigners you can bring in as a proportion of your staff.” More than 90 per cent of Fast Starters have employed a staff member within a year of starting business, and 36 per cent within a Tax wish list week. Leading Mobiles, a Telstra mobile phone dealer, had so much trouble finding the right • A tax honeymoon in people that it started its own recruitment the start-up phase company. Director Allister Lewison says the • Abolition of payroll taxes high employment rate means some staff move • Reduce the number between jobs rather than working hard for a of taxes promotion. “They move because they can,” • Simplify compliance he says. “There are so many jobs.” Lewison has become more cautious about hiring, and has introduced more paperwork to cover himself. He stopped using external recruitment companies because many of his recruits did not stay. He started a recruitment service as a separate business and found better candidates, with enough left over to provide to others.
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