3 Important Issues for Business Owners to Consider

In my new role as HR Advisor I would like to take this opportunity to share with you the three things that I have found to be the most important issues for business owners to consider.

1. Employment Agreements

Most importantly, you need to ensure you have effective employment agreements in place. This contract outlines the relationship between employers and employees. First of all, this contract is mandatory and a business without these agreements in place is at risk of getting a $10,000 fine per employee or $20,000 for the company, from the Employment Authority.

Employment agreements are easy to put in place when you are recruiting new staff. There are almost never any queries about the clauses or content at this early stage of the relationship. However, the same cannot be said for trying to get these in place months or years later. While rolling out agreements to your existing staff is completely doable, it can be a time consuming and frustrating process for everyone involved. It will invariably be disruptive, and there may be some ill-feeling stirred up as a result. At the very least it will bring out a pedantic side of your staff you may not have known existed. For example, we had one client forced to change the wording of “Queens Birthday Weekend” to “The birthday of the reigning sovereign”. You can imagine the “thorough” nature of the rest of this person’s feedback!

While you have to factor the necessary time for this retro-fitting process, most importantly you need to be patient and retain your sense of humour until agreement in place you will generally never hear another peep about them.

Another thing to consider is that there have been a number of changes to employment legislation over the last few years and you want to make sure you do not have any vulnerabilities exposed as a result of these. Be proactive on this one, make sure you are covered otherwise you may open yourself up to problems.

Furthermore, it is always worth having a second pair of eyes to look over your agreements, even if you have had them drawn up by a reputable organisation. For example I recently looked over a friend’s employment agreement and was shocked to see that she did not have any Restraint of Trade or Non Solicitation clauses in her contract. In effect, there was nothing preventing her from going out and setting up in direct completion with her employer once she had worked her three week notice period. However, even more concerning than this was the fact that there was nothing stopping her from headhunting her employers entire staff and also directly marketing her new business venture to their entire client base. This is a shocking oversight for a firm that offers relationship based professional services and that there are relatively low financial barriers to setting up a new business in this industry. Who was responsible for this? You might ask. I was shocked to see that the logo of a well respected law firm on the front cover of the contract.

2. Redundancy

If you consider that running a business is a bit like cooking, sometimes the best dishes are arrived at by throwing in a slurp of this and a shake of that, while at other times you have to follow the recipe exactly or the dish ends in disaster. Well, going through the redundancy process is one of those times you want to follow the recipe exactly!

While redundancy is not a process we ever desire for our businesses, it is from time to time necessary to ensure the ongoing success of a firm.

It is vital that you follow the redundancy process exactly, so as to avoid opening yourself up the possibility of getting a personal grievance against the business. This can be as critical as the wording you use within both your written and verbal communications with the staff member in question.

You must also follow what it says in the individual employment agreement and any policies that you have in place relating to a redundancy or restructuring process. Furthermore, to make things much more straight forward, make sure you have clauses in your agreement covering redundancy.

3. Work on your business

Be sure to give yourself sufficient time to work strategically ON your business; visioning, analysing market trends and developing strategies so as to ensure your firm maintains the desired trajectory. No doubt you are sitting reading this thinking – “but where do I get the time to do this?” This really is the curse of a successful and growing business. Effective staff development and delegation strategies can help you build this time into your week so you can commit to this important task.

Furthermore, make sure you give yourself the time and space to get away from the daily hubbub of the office for this process. If you can’t shut your office door and mute your phone, you might consider the strategy some of our clients, who bank with the BNZ use, whereby they book a space at their local Partners branch, for half a day per week for this purpose.

Remember that every business, like every ship, must have captain with their eyes of the horizon, providing strong direction. At the end of the day we all want to avoid Rena disasters! It is up to you to provide the vision for your business and effectively communicate that to your staff to ensure the ship safely makes it to port.

Written by: Lisa Anderson
HR Advisor, Pod Consulting Ltd