Adapting to minimum wage and other legislative changes in Australia
On the heels of the changed 457 visa news came the announcement of staged cuts to Sunday penalty rates over the next four years – followed by the Fair Work Commission’s decision to increase Australia’s minimum wage by 3.3 per cent. That’s a lot of important legislative changes for organisations to understand and manage.
For business leaders, changes such as the increase in the minimum wage, can be a concern. Some argue that it will affect their organisation’s bottom line and therefore stifle jobs growth. The Australian Retailers Association executive director, said in an recent article in the Sydney Morning Herald, “Our members are constantly experiencing significant cost pressures through international competition and advances in technology, therefore we believe this wage increase is unfavourable for all businesses operating in the retail sector.”
Here are four points to consider as you prepare to mitigate the business impact of a minimum wage increase and other legislative changes.
Employee wages aren’t just a cost – they’re an investment in your productivity
Organisations could discover that when wages go up at their lowest-paid positions, job vacancies may disappear as more workers could agree to take these jobs they would have earlier rejected. Businesses incur many hidden costs and missed opportunities due to vacant jobs and employee turnover. Paying higher wages can help fill vacant positions quickly, reducing these costs.
For example, electronics retailer JB Hi-Fi, chose not to pass on lowered Sunday penalty rates. In a statement to SmartCompany, JB Hi-Fi group chief executive Richard Murray said, “As a leadership team we gave careful consideration to the potential impact of the Fair Work Decision on the Group and our people and decided the best outcome for our existing team members was to maintain their current pay and conditions.”
Are your processes and systems as efficient and accurate as possible?
43% of hourly workers surveyed admit to exaggerating the amount of time they work during their shifts(1). Employee timesheet error and fraud can be a big problem for Australian businesses using legacy or manual processes – but it doesn’t have to be. You can improve your time capture, rostering and leave management processes to substantially increase accuracy, business efficiency and savings. Integrated, real-time solutions could also improve the productivity of managers by eliminating the ‘behind-the-desk’, manual effort required to review timesheets, leave requests and schedules.
Redefine success to go past the minimum wage battleground
The trouble with being in a low-cost, low-wage industry is that by competing on price or by competing on who can pay the lowest wages, it becomes harder to invest in adding additional value to your products or delivering a premium service. These legislative changes could be an opportunity to change your business model away from a ‘race-to-the-bottom’ commodity pricing structure. Could a new strategy allow you to pursue bigger profit margins, which also makes it easier to be generous to your employees and your customers?
Automation can strengthen the human element
Many low-wage industries are looking to automate more work that was previously done by humans. According to a recent MIT Technology Review, Asia is speeding up global Artificial Intelligence (AI) adoption. Business leaders across many industries view AI and robotics as constructive, with expected efficiencies and higher productivity. The Human Resource (HR) professionals surveyed by MIT overwhelmingly believe that their role will change, to manage both man and machine.
For example, fast food restaurants are testing new self-serve kiosks where customers can place their orders via touchscreen. Work collaboratively with your HR team and employees to re-imagine job descriptions to find the essential tasks and services that require the human element of interpersonal connection and creativity. Remember good ideas and productivity solutions can come from all levels of the organisation – proactively reach out and listen to the employees who are on the front lines dealing with customers each day.
Employees aren’t just a ‘cost’, they’re your biggest asset. Successful, competitive businesses will find creative ways to work collaboratively with employees to increase their efficiency, boost productivity and find new opportunities to build a stronger business – rather than being defeated by legislative changes such as a higher minimum wage.
(1) “How Software Can Reduce Payroll Losses Industry View | 2015”, Software Advice