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I read a news article on the SmartCompany website last month ‘Unemployment rate hits 12-year high as SMEs struggle to hire in “rigid” IR system‘ that irritated me. I was irritated again when I read a similar article this week ‘Ai Group calls for Productivity Commission to make it easier to sack employees‘.

What irritated me was the notion that when things become more difficult, businesses want governments (state and Federal) to make things easier for them, rather than looking at what they can improve.

Let me explain what I mean in the context of these two articles.

Here’s the key extract from the first article:

Kate Carnell, chief executive of the Australian Chamber of Industry and Commerce, this morning told SmartCompany the rigidity of the industrial relations system, particularly when it comes to downsizing staff, was a significant roadblock to SMEs employing more staff. 

“We desperately have to make it easier for SMEs to employ and shed staff if business doesn’t go well,” says Carnell. 

“The industrial relations system is so rigid, it’s a risk to employ people when it’s really hard to down size.”

I’m sorry, but this is just not true.

It’s not risky to employ people; what’s risky is employing people in an unstructured, inconsistent and careless way.

Unfortunately for many businesses the implementation of proven methods for maximising recruitment success is a low priority, as many recruitment consultants who specialise in the SME sector would attest to (and I have written about before, most recently here and here).

However this does not just apply to SMEs. Last year we had the very well publicised case of Myer, a public company, completely embarrassing themselves with the hiring of a serial liar into a senior job.

The options for businesses are straight forward: If you have sufficient demand for an additional staff member then hire a temporary worker or contractor. When you have sufficient confidence that the demand will be ongoing, a permanent staff member can be hired (often the temp). Any smart leader will assess the temp/contractor on-the-job to ensure that both the skills and the cultural fit are at the required level. If in doubt; don’t hire.

When a new employee starts, there are some sensible steps that should be taken to maximise the likelihood of that employee succeeding (I have detailed these here).

It’s not hard. It just takes commitment and adherence to effective people practices.

Here’s the extract from the second article that got me riled: 

The Ai Group’s submission to the Productivity Commission’s inquiry into workplace relations…… states it is too difficult for businesses to sack poor performing employees.

Again, this is just not true.

It’s not difficult to sack people; what’s difficult is sacking people when you haven’t provided them with clear expectations, consistent coaching, documented and regular performance feedback and an opportunity to improve if performance has been lacking.

What’s difficult is sacking people on a whim or at short notice. 

How many high performing companies complain about the difficulties in sacking staff?

I can’t think of any.

Do you know why?

High performing companies become high performing largely because they pay attention to recruitment, induction, training, performance accountability and overall employee development. Consequently they recruit far fewer unsuitable people and those few that do sneak through are quickly performance managed out and at minimal cost.

Low performing companies become, and remain, low performing largely because they pay little attention to recruitment, induction, training, performance accountability and overall employee development. Consequently they recruit a greater number of unsuitable people and those unsuitable people are rarely performance managed out. When the employee’s underperformance has finally become too much, the company wants a quick fix. Guess what? The quick fix (eg redundancy) can be expensive and the company doesn’t want to pay.

I call BS on the bleatings of both the Australian Chamber of Industry and Commerce and the Ai Group.

Stop looking externally for the source of your problems. Prove that your members are committed to dramatically improving their people practises before complaining that things are too hard and various governments should make life easier for you.

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Ross you state that it is not true that it is too difficult for businesses to sack poor performing employees – I could not disagree with you more. You are a self employed person & as such have no idea how hard some businesses have it at the moment. I am an Industrial Relations consultant who works with hundreds of businesses around the country – some very high performing companies – and it is over complicated & far too difficult to remove underperforming employees as required. I applaud the work being done by Ai and other employer groups and hopefully when the amendments are made to the Fair Work Act later this year will rectify these issues and get business productivity back to levels it should be at rather than being constantly hindered by these unbalanced employee centric based rules.

John Pietersen

Hi Ross – terminating employees has been an issue for employers ever since the 'unfair' Fair Work was established – many have said the same thing, not just the Ai Group or this poster and recently examples that I can recall such as :

Reserve Bank of Australia governor Glenn Stevens asks if it’s too hard to hire and fire workers

CCIQ backs RBA Governor's comments on too hard to sack

Too hard to fire public servants: ex-Defence Materiel Organisation boss Warren King

Would love your thoughts, please comment.x
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