Expanding into Australia and New Zealand: Where businesses most often underestimate what’s involved
Expanding into Australia or New Zealand can take several different paths. Some businesses choose to set up a local entity. Others explore remote hiring models. Increasingly, many look to Employer of Record (EOR) or Professional Employer Organisation (PEO) solutions to enter the market more quickly and with less administrative burden. At the centre of each approach is the same challenge: employment. Businesses know there are laws, obligations and compliance requirements involved in hiring overseas, and that processes need to be followed. What is less clear is how those laws actually work in practice, and how they apply to real employment situations day to day. This is where businesses tend to underestimate what is involved. Working with a locally based, on-the-ground EOR provider often brings these realities into focus early. It helps uncover the practical considerations that are not always obvious at the outset, particularly across two distinct employment markets like Australia and New Zealand. Understanding the rules is only the starting point Employment frameworks across Australia and New Zealand are well documented. It is relatively easy to find information on minimum standards, contracts and employer obligations. The complexity starts earlier than many expect, during the initial setup phase. How employees are engaged, how contracts are structured, how payroll is established and how obligations are defined from the beginning all have a direct impact on compliance. Decisions made at this stage set the foundation for everything that follows. Once employees are in place, the focus shifts to how those rules are applied in real situations. Day-to-day employment decisions rely on process, timing, documentation and an understanding of how regulators and mediators interpret actions in each market. As Fran Davies explains: “Most businesses we speak to understand there are compliance requirements. Where they often need support is in how those requirements are applied in real situations, particularly when decisions need to be made quickly.” Where underestimation tends to show up In practice, the gaps appear in common business scenarios rather than unusual ones. Managing employee performance within local frameworks If employee performance issues arise they need to be managed carefully. In Australia and New Zealand, managing those situations requires a structured and well documented approach. Steps need to be followed in the right order, with clear communication and fair process. In New Zealand, expectations around fairness and employee protection can be particularly strong, which increases the importance of handling these situations carefully. Without local guidance, businesses can move too quickly or miss critical steps, which can lead to disputes. Handling redundancy and restructuring correctly Redundancy processes are another area where detail matters. Employers need to consider consultation requirements, timing, documentation and how decisions are communicated. These elements are closely linked to employment compliance and employer responsibility. Even when a business understands that redundancy must be handled carefully, the practical execution can still create risk if not managed correctly. Having access to locally based expertise helps ensure these processes are managed in line with each market’s expectations, with the right steps taken at the right time. Meeting payroll expectations and supporting employees locally Payroll is often viewed as an operational task, but it carries significant compliance responsibility. This includes managing: Employee entitlements and leave Superannuation in Australia and KiwiSaver in New Zealand Local variations such as salary sacrifice or novated arrangements Ongoing payroll accuracy across different employment conditions Employees also expect timely, clear responses when they have questions about their pay or benefits. Providing that level of support requires local knowledge, responsive on-the-ground support, and the correct processes in place. Treating Australia and New Zealand as one market Australia and New Zealand are often approached as a combined expansion opportunity. In reality, each market has its own employment framework, expectations and regulatory approach. Australia operates within a more structured system, while New Zealand can involve more interpretation in areas such as dispute resolution. Managing both markets successfully requires an understanding of how these differences affect day-to-day employment decisions. As Fran notes: “Each market has its own expectations. Having a clear understanding of how employment works in practice across both countries makes a significant difference as a business grows.” What this means for expanding businesses The impact of underestimating these areas often traces back to decisions made during the initial setup phase. When employment structures, contracts or payroll are not set up correctly from the outset, issues rarely stay contained. As the business grows or more complex situations arise, those early decisions often need to be revisited. This can lead to rework, increased costs and duplicated effort. Internal teams may also find themselves managing unfamiliar processes while trying to maintain day to day operations. Over time, this reduces efficiency and makes it harder to manage employee matters with confidence across Australia and New Zealand. Building the right foundation from the start Addressing these challenges comes down to having the right structure in place early. For many businesses, this is where an Employer of Record (EOR) or Professional Employer Organisation (PEO) model plays an important role. It provides a framework to: Engage employees without establishing a local entity Manage employment compliance and obligations locally Ensure payroll accuracy and correct entitlements Support visa sponsorship and workforce mobility Provide consistent HR and workforce support It also creates a clear point of accountability, which simplifies decision making and allows businesses to focus on growth rather than navigating unfamiliar employment requirements. Final thought Expanding into Australia and New Zealand brings strong opportunities for growth, with several pathways available depending on how a business chooses to enter the market. Whichever approach is taken, the businesses that navigate it well focus on getting employment set up correctly from the beginning, with a clear understanding of how local requirements apply in practice across both markets. For those choosing an
Australia payroll services: how PEOs can help global businesses pay their employees wages
As globalisation continues to bring businesses closer together, more and more foreign companies are expanding into Australia. However, managing global payroll for Australian workers can be a challenging task, especially for companies that are not familiar with the country’s complex payroll laws and regulations, or they haven’t established a legal entity in the country. In such instances, engaging the help of a Professional Employer Organisation like ANZPEO will enable these organisations to hire through a legal Employer of Record, meaning the PEO manages payroll for the organisation as their workers’ legal employer. What is a Professional Employer Organisation (PEO)? PEOs are companies that provide outsourced HR services, including global payroll services, to other businesses. They can assist overseas businesses by handling their Australian workers’ payroll and ensuring compliance with Australian payroll regulations. In the instance where the PEO is also the Employer of Record for an organisation’s full time employees, the PEO becomes the legal employer. For every pay run, you, the client organisation, pays ANZPEO your workers’ wages, and ANZPEO pays those funds to the employee as their legal employer. Here are some of the ways that PEOs can help overseas businesses process payroll for their Australian workers: Knowledge and expertise in Australia payroll regulations One of the main advantages of using a PEO is that they have expert knowledge of payroll laws and regulations of the Australian government. This means they can help overseas businesses comply with these regulations, which can be complex and challenging to navigate. By working with a PEO, businesses can avoid potential legal issues and penalties that may arise from non-compliance. Simplified payroll processing Processing payroll for Australian workers can be a time-consuming and complicated task. PEOs can simplify this process by providing efficient and accurate payroll services. They can also handle other payroll-related tasks such as superannuation contributions, employee benefits, severance pay and annual leave or parental leave management. When it comes to tax services, PEOs can assist businesses with tax contributions by ensuring compliance with local tax laws and regulations, calculating and deducting taxes from employee salaries, making tax payments to the appropriate authorities, facilitating payroll tax and making contributions to payroll taxes, and providing accurate tax reporting and documentation to businesses. Access to advanced payroll and HR software PEOs use advanced payroll software to manage payroll processing. By working with a PEO, businesses can access this software without having to purchase it themselves. This can help them securely store and manage an employee’s personal information, such as their Tax File Number (Australia’s equivalent to the U.S Social Security Number), and save money on software and IT costs while also benefiting from the latest payroll processing technology. Managing employee payroll through a PEO also offers significant benefits to an organisation’s employees. Many offer employee self service CRMs that allow them to log hours and manage leave entitlements through the platform rather than requesting them from their employer. Reduced administrative burden Managing employee payroll can be a significant administrative burden for businesses, especially for those that are expanding overseas. Organisations that choose to outsource payroll processing to a PEO can reduce their administrative workload, allowing them to focus on other core business activities. Flexibility and scalability PEOs can provide businesses with flexibility and scalability in managing their Australian workers’ payroll. They can offer customised payroll solutions to meet businesses’ specific needs, whether they have one employee or hundreds. As business growth picks up pace, PEOs can also scale their services to meet the growing payroll needs. How can ANZPEO help your international business manage your payroll in Australia? For overseas businesses expanding into Australia, managing Australia payroll can be a daunting task. By partnering with ANZPEO, you can benefit from expert knowledge, simplified payroll processing, advanced software, reduced administrative burden, and flexibility and scalability, without having to establish a legal entity in the country. Outsource payroll processing to ANZPEO so you can focus on your core business activities while ensuring compliance with Australia payroll regulations. Speak to us today.
Creating an Employee Value Proposition that will captivate Australia’s skilled workers
A little while ago, we published an article about the current challenges many Australian businesses are facing in sourcing and hiring top talent. As the country experiences its lowest population growth in three decades, companies are staring down the barrel of widespread skills shortages, record-high wage growth and employment levels, and high demand for goods and services for years to come. Labour shortages have plunged Australia into a candidate-driven market, giving job seekers the upper hand in deciding what roles they consider going for and under what circumstances. Top skilled workers have the luxury of choice when it comes to negotiating better pay and company benefits like flexible working conditions and health insurance. Companies that wish to attract and retain top skilled workers in Australia must consider what it is they value most, and what they look for, in their ideal role. Recognising and acknowledging these values in job descriptions and interviews will ensure businesses attract the most suitable candidates to their open roles. What are candidates looking for in their ideal role in 2023? According to Randstad’s report 2022 Employer Brand Research, salary is no longer the biggest motivator when it comes to choosing a role or changing jobs. 62% of candidates say they want work-life balance in their next role, with 58% saying they want a better salary and benefits, followed by job security (56%), job training (53%) and work atmosphere (51%). According to Seek.com, the top three drivers for candidates in their job hunt align with Maslow’s hierarchy of needs and have largely remained the same for over ten years; salary (survival), work-life balance (connection) and career development (self-growth and development). What’s interesting about this finding is that the top drivers are all about them, not the company. So, while it’s important to address factors like company reputation and culture, candidates will mostly resonate with the areas of an EVP that speak to their individual values. Work-life balance is no longer a “nice to have” aspect of a role but an expectation and, in many cases, a requirement. As workers are expected to meet increasingly tight deadlines and hit targets, they’re working longer hours and taking on responsibilities outside their scope of work. Those with young families who want to return to work also want the flexibility to maintain family life. They want to get the work done in an arrangement that works for them. If it’s work-life balance that candidates are valuing in today’s market, then this will come at an advantage for Australia employers that are feeling the crunch from dwindling revenue in a challenging economy. Companies can now negotiate on terms other than salary. Companies that offer hybrid working conditions (part working from home, part working in office), fully remote conditions and/or flexible working hours can also cast the net wider in their hunt for candidates. Instead of limiting their search to the city they’re headquartered, they can look to regional towns and even overseas. How to create an Employee Value Proposition that will captivate Australia Skilled Workers So how do Australian businesses create an Employee Value Proposition (EVP) that will win over the right candidates? Understanding what candidates want from an employer, and acknowledging these values in their EVP, will help Australian businesses capture the attention of top skilled workers that will help meet their business needs. What is an Employee Value Proposition (EVP): An EVP is a company statement that communicates the unique benefits of your company to prospective employees. It usually covers your company values and culture, as well as things like remuneration, benefits and company perks. It outlines why your organisation is the ideal place for your ideal candidates. According to Vervoe, companies that deliver on an EVP see a 70% decrease in employee turnover and an almost 30% increase in new hire commitment. Although your EVP communicates to candidates and employees what they’ll get in return for working at your organisation, it’s not the same thing as your employer brand, which encompasses the reputation the wider world, not just employees and potential employees, has for your organisation. Your EVP can be as short or as long as it needs to be, so long as it highlights all of the critical elements it needs to include and what’s most important to attract the right candidates. For an EVP that captivates Australian workers in 2023, consider the following: Worklife balance: what factors within your organisation promote a healthy work-life balance? Do you enable your employees to work from home part- or full-time? Do you allow them to choose their own working hours within reason? Part of Hubspot’s EVP encompasses a statement on how they offer unlimited vacation, fully remote work, a five-year sabbatical and parental leave, along with a raft of company perks. They promise to “help you be the best “you” that you can be”. Remuneration: outline how/if you can meet your employees’ salary expectations and include additional rewards such as bonuses, travel allowances and additional paid leave. Also, consider whether or not their salary will be increased periodically – say, by 5% every 12 months – and under what circumstances. Job security: Your EVP should encompass all the ways in which your organisation will protect its employees from layoffs, economic downfalls and other factors that could impact employment. Does your organisation prioritise future-minded leadership? Does it encourage learning and development or have a no-redundancy policy? Career development: include the opportunities you offer employees to further their careers, develop their skills and train them in new areas. This is where you’ll include learning and development efforts such as Professional Development Plans, mentoring and coaching, educational allowances and so on. Affiliation/reputation: skilled professionals don’t want to be associated with a weak brand, poor business performance or Corporate Social Responsibility record. In this section, consider factors like your corporate values, wider reputation, the quality of your product and/or service, growth objectives and position in the marketplace. How your organisation impacts its people and the wider community is a key consideration for
What are the average Australia salaries for skilled workers?
Australia is well known for its strong economy, but the cost of living, particularly in 2022, when inflation is wreaking havoc on society, is very high compared with other countries. Skilled workers, who generally possess tertiary degrees and are more professionally experienced, must be paid a fair wage that reflects their skills, experience, and cost of living. Companies that do not offer their candidates a fair salary will not attract the best talent to take on their roles. If they do, employees are much more likely to shop for a better-paying position sooner. Identifying what fair and reasonable salaries are for your skilled workers can be a challenge, particularly when you’re hiring through a professional employment organisation from a country such as the US or UK. How do Australian salaries compare to the rest of the world? In a report by the Organisation for Economic Co-operation and Development, Australia has the 9th highest average wage globally, sitting at 30% above the world average. As of 2019, the average income earner was taking home around $USD58,000, compared to $US44,000 in the US. The local average salary in Australia is also above that of the UK, Canada and New Zealand. For skilled workers in Australia, however, it varies. They tend to be higher in most professions in the UK but lower than the average salaries for skilled workers in the US. A study conducted by Outsource Accelerator compared the difference in salaries for high-skill roles in Australia, the United States and the UK. All figures indicate annual salary in USD. Role USA UK Australia HR Managers $78,007 $46,669 $66,518 Software Developer $81,994 $39,913 $62,653 Software Engineer $109,087 $44,459 $62,653 Team Leader $75,823 $31,174 $45,428 Senior Project Manager (12+ years’ exp.) $102,318 $80,343 $107,890 Program director (12+ years’ exp.) $69,508 $94,623 $145,972 Accountant $67,190 $72,923 $58,479 Accounting supervisor $79,408 $48,529 $60,195 Labour shortages and increased cost of living have driven wage growth Things have changed a lot since the pandemic. This year’s Skills and Jobs Summit addressed the key economic challenges in Australia today, namely the labour shortage that is driving unemployment down (currently at 3.4%). However, labour shortages typically drive wage growth up, forcing corporations to offer further incentives in the hope of attracting top talent. Short talent supply for skilled jobs in Australia over the last 12 months has forced pressure on several industries and jobs, leading to this sharp increase in pay rises. The Australian Bureau of Statistics announced a 2.6% annual rate of wage growth “after three-quarters of consistent wage growth, driven mostly by wage rises across the private sector,” says Michelle Marquardt, head of Prices Statistics at the ABS. To combat this rapid wage growth, the Australian government has announced key initiatives that aim to promote greater participation in the workforce, for example, encouraging more skilled migrants to acquire 482 visas by increasing the annual immigration intake from 160,000-195,000. How do employee entitlements compare between the UK, US and Australia? Like most countries, employers of Australian workers must also consider employee entitlements to be paid on top of salaries. Such entitlements differ to those of the US and UK. United States Unlike Australia, paid sick leave and paid annual leave are not compulsory offerings under federal US law. However, many states have mandated paid sick leave and many companies offer paid annual leave at their discretion. US companies are required to cover 6.2% of their employees’ salary for social security, 1.45% for Medicare, as well as state and federal taxes. In some instances, large US corporations that do not offer health insurance to their employees are subject to penalties. Employers are not legally obligated to provide pensions or retirement benefits for their employees, though many do provide them with retirement savings plans that contribute to their 401k. United Kingdom In the UK, full-time permanent workers are entitled to 4 weeks (20 working days) per year of paid annual leave and eight days for paid public holidays. Paid sick leave is not mandatory, but some companies might offer a paid sick leave scheme. An additional 8% of a UK employee’s wage must be paid to their pension scheme. Australia In Australia, all full-time permanent workers, regardless of income, are entitled to 20 days (four working weeks) of paid annual leave. For some professions, they’re also entitled to annual leave loading of 17.5% on top of their wage. In addition, workers get ten working days of personal leave per year, which covers sick days and carers’ leave. Both annual and personal leave are accrued pro-rata, but only annual leave gets paid out if not taken. The number of paid public holidays varies from state to state. In New South Wales there are 11, in Queensland there are 9, and in Victoria there are 13. By law, all employers in Australia must also contribute an additional 9.5% of their employees’ salaries to their nominated superannuation fund (equivalent to the 401k plan in the US) Paying your Australian skilled workers an adequate salary will not only ensure they’re able to afford the cost of everyday living, but it will also make your company a secure and fair place to work. Looking to hire workers in Australia? Speak to ANZPEO about how to remunerate your skilled workers correctly and according to their skills, experience and profession.
Australia’s Jobs and Skills Summit
Held in September, Australia’s Jobs and Skills Summit brought together representatives from unions, employers, civil society and governments to address the economic challenges caused by current labour shortages. The Summit and subsequent Employment White Paper that was released focused on: keeping unemployment low while boosting productivity and incomes delivering secure, well-paid jobs and strong, sustainable wages growth expanding employment opportunities for all Australians, including the most disadvantaged addressing skills shortages and getting our skills mix right over the long term improving migration settings to support higher productivity and wages maximising jobs and opportunities from renewable energy, tackling climate change, the digital economy, the care economy and a Future Made in Australia ensuring women have equal opportunities and equal pay Led by the Prime Minister and Treasurer and supported by other key ministers, the Summit recommended immediate actions and opportunities for medium and long-term reform. The key recommendations to come from the event covered a range of different areas, including: Technical and Further Education (TAFE) One billion in funding was committed to paying for free TAFE courses and more than 460,000 free TAFE places. Other training opportunities will be created to encourage more women, First Nations people, regional Australians and culturally diverse Australians to participate in the workforce. Measures will be put in place to reduce barriers to employment and increase apprenticeships. The Government also pledged to develop a comprehensive blueprint with key stakeholders to support and grow a quality Vocational Education & Training workforce. Overseas migrants One of the main contributors to Australia’s workforce shortages is a lack of migrant workers. During COVID, many immigrants and short-term visa holders returned home, which reduced the ‘pool’ of skilled and unskilled workers in Australia. At the Jobs and Skills Summit, it was decided to expand the permanent migration program from 160,000 to 195,000 people between now and the end of next year. For temporary workers and international students, visas will be extended and work restrictions relaxed. Funding has also been committed to fast-track the current backlog of visa applications. In addition to this, international students who study nursing, engineering, IT and teaching (to name a few) will be allowed to stay and work in Australia for an additional two years after completing their course. Master’s graduates will have their post-study work-rights visas increased from three to five, and PhD graduates will be able to stay six years, up from four. Fair Work The Government will update the Fair Work Act to create a simple, flexible and fair new framework that ensures all workers and businesses can negotiate in good faith for agreements that benefit them. These include small businesses, women, care and community services sectors, and First Nations people. In addition to this, the Government will: Consider options to support the Fair Work Commission build cooperative workplace relationships Consider how to best help employer representatives and unions improve safety, fairness and productivity in workplaces Amend relevant legislation to give workers the right to challenge unfair contractual terms Initiate a detailed consultation and research process on the concept of a living wage, reporting back in late 2023. Initiate a detailed consultation and research process considering the impact of workplace relations settings (such as rostering arrangements) on work and care, including childcare. The Government will also update the Fair Work Act to: Provide proper support for employer bargaining representatives and union delegates Provide stronger access to flexible working arrangements and unpaid parental leave so families can share work and caring responsibilities Provide stronger protections for workers against adverse action, discrimination, and harassment Women in the workforce To encourage female participation in the workforce, businesses with 100 employees or more will be required to publicly report their gender pay gap to the Workplace Gender Equality Agency. Employers with 500 or more employees must commit to measurable targets to improve gender equality in the workplace. Pensioner working hours Finally, pensioners will be able to earn an additional $4,000 during the 2022/2023 financial year without losing any of their pension. This is on top of the $480 fortnightly earning limit that currently applies. The goal of these changes is to deepen the talent pool and remove barriers to entry so more Australians can actively participate in the workforce, which should make a difference to wage pressures and skills shortages currently being experienced by employers. You will find the extended outcomes document with all the immediate actions and areas for further work here. Need to build a skilled team of employees in Australia? Contact ANZPEO for help finding, recruiting and onboarding the right people today.
2022 changes to Australian workplace relations laws
When you employ staff in Australia, you must take steps to comply with the latest workplace relations laws. In 2022, some of these regulations have changed. Here’s what you need to know about the latest updates if you employ people in this country. Workplace relations law in Australia Australian workplace relations laws are in place to protect the rights of Australian employees. They fall under three main categories: – Legislation – Industrial instruments – Common law Many laws protecting Australian employees also fall under the Fair Work Act 2009, which covers the majority of workers in Australia and protects their minimum terms and conditions. It is important to be aware that the Fair Work Act does not cover every industry. What’s more, some requirements differ from state to state. Recent changes to Australian workplace relations laws As of 2022, any company that employs Australian workers must be aware of several significant changes to Australian workplace relations laws. Vaccination policy Less a change and more a confirmation, The Fair Work Commission recently concluded a case that confirmed mandated vaccination policies are not unlawful. Based on the outcome of this case, an employer is entitled to implement a mandatory vaccination policy, even if there are no standing public health warnings. While the case was specific to the Australian Submarine Corporation (ASC), the ruling will most likely be held as a precedent should other cases arise. If your workplace is considering imposing a mandatory vaccination policy, it is worth noting the following conditions of the recent ruling: – Employees must be given time to either comply with the mandate or to decide to take other action. – The ASC is expected to review the policy after 12 months as the impact of the pandemic is rapidly changing – The ASC also must consult on mandatory booster requirements before making them mandatory. Mandatory vaccination is an evolving area of workplace relations right now. Check in with your ANZPEO for the latest information if you are considering a policy change. Domestic violence leave Another update to Australian workplace relations laws that is on the way is the implementation of domestic violence leave. The new Labor government intends to add ten days of extra leave for sufferers of domestic violence. A late addition to the plan also allows leave for casual workers who suffer domestic violence. This leave is intended to create a safety net for victims of domestic and family violence. Knowing they have the leave means they can take time off to escape their dangerous circumstances without fearing losing their jobs. Return to Work Laws In South Australia recently, return to work laws regarding injury claims have been given a shake-up. Previously, each injury was assessed and given a percentage rating, with 5% or more being the lowest threshold for a lump payment and 30% or more being labelled as a serious injury. Now workers can combine multiple injuries to create a sum percentage. So, an ankle injury of 3% and a shoulder injury of 29% will generate a total of 32%. Workers who meet the criteria for serious injury may be entitled to help with their medical expenses and weekly income maintenance. Workers with less than 30% may only be entitled to a lump sum payment. Minimum wage As of July 1st 2022, the Fair Work Commission has implemented a 5.2% increase in the National Minimum Wage. They have also increased modern award minimum wages so wages under $869.60 will attract an increase of $40 a week, and wages above $869.60 will increase by 4.6%. The high-income threshold The high income threshold restricts an employee’s access to an unfair dismissal claim (unless they are covered by an enterprise agreement/award). Until July 1st 2022, the high-income threshold was $158,500 per annum, but it has now risen to $162,000 per annum. The compensation limit for unfair dismissal has also increased as of July 1st, now coming in at $81,000. Superannuation This year also sees a rise in the minimum superannuation guarantee from 10% to 10.5%. The superannuation contribution base has also increased to $240,880 per annum, and there is no longer a minimum threshold except for persons under 18 years of age who are required to work at least 30 hours a week to obtain contributions. Need to know more about Australian workplace relations laws? Contact ANZPEO today.
Top recruitment tips during a labour shortage in Australia
Overcome Australia’s labour shortage It’s no secret that there is a shortage of good workers in Australia right now. Unemployment is hitting near record lows, with the Australian Bureau of Statistics recording a drop to 3.5% in June. While high employment is good for the nation for many reasons, it means finding skilled and productive staff can be difficult. So what do you do to ensure that your workplace is both a magnet for high-quality workers and a haven for your current people? Let’s start with attracting employees. Beat labour shortages in Australia You want potential employees to see your company as a desirable workplace so there are plenty of responses to your job advertisements. Here are some ways you can do that: Marketing Many businesses now apply a marketing strategy to attract talent. An easy place to start is with a careers page, which will highlight the many reasons to work for your organisation and give people an easy way to send through their details. Your careers page can have videos promoting your workplace and even blog posts about what it’s like to work there. Don’t be afraid to add some personality so your company stands out. List the benefits people receive when working with you such as rostered days off, subsidised healthcare or regular team gatherings. Pay competitive salaries At the end of the day, money talks. If you can offer above award wages (award wages are the minimum standard for many professions, particularly trade-based roles), you will be able to attract more applicants and have more flexibility around who you choose. Offer perks Other perks in addition to a competitive salary will put your business ahead of the competition. – Working from Home Allowance: Over the past few years it has become more commonplace for some sectors in the workforce to work remotely from home. You may consider paying you workers a Working from Home Allowance to cover costs such as electricity and internet cost. – Food: There’s nothing better than a free lunch. Even if it’s only once a month, a free lunch can be an excellent motivator and a way to develop camaraderie across your team – Health insurance: In the USA, many companies include health insurance as part of their package but it is not the same in Australia. However, offering a monthly health insurance rebate of $100-$200 can be an appealing perk – RDOs: Some businesses and organisations in Australia offer their workers a nine day fortnight — they work slightly longer hours or take a shorter lunch break in return for every second Friday or Monday off work. – Flexible hours: Staggered start times can make a big difference to people’s schedules and stress levels. It’s easy to set a window for start times, e.g. between 7:30 am and 10 am, so long as people work their standard 7.5-8 hours per day. Retention Of course, to reduce the need to hire, you need a strategy to hold onto your existing team. What’s most important is creating a place people enjoy showing up to, whether virtually or in person. – Workplace culture Culture exists at every workplace and can be tricky to define but when you get it right you have fast-moving teams who get more done with less effort. One way to guide culture is to have clear values and to share them as part of the hiring and onboarding process. When challenging behaviours arise, you can refer people back to the company values and have constructive conversations. People work better together when they have a sense of kinship and belonging. Hosting regular catch ups and events is a great way to foster a stronger team. If you have people working remotely, consider some online games and activities. – Be free with your feedback Staff work better when they know where they stand. Frequent, constructive feedback can help your employees improve while also letting them know they are noticed and valued. Scheduling regular catch ups also allows them to raise any concerns, frustrations or issues. – Build your social and environmental conscience Studies have found employees and in particular the younger generation will hesitate to accept a job if their employee doesn’t have a strong Corporate Social Responsibility (CSR) policy, and 83% would be more loyal to a company that helps them contribute to social and environmental issues. CSR means actively contributing to the community and taking steps to minimise waste and build a more sustainable future. Some studies have even found the youngest workers prioritise purpose over salary. Focusing on improving your business in this area can help to attract ‘bright young things’ and build their loyalty. Want more information about how to quickly fill staff vacancies in Australia? Talk to ANZPEO.
Tackling pay raise requests in Australia in 2022 and 2023
Pay raises in Australia Inflation has hit hard in Australia this year, with costs jumping for essential items like food, fuel and energy/home heating. With expenses increasing across the board, companies that pay staff in Australia may find staff start to ask about pay raises. There are different ways to handle this question without increasing the risk of losing good people. When are staff entitled to a pay raise? When you pay staff in Australia, it is generally left entirely to the employer’s discretion as to when staff receive a pay raise. Pay raises usually depend, on three factors: 1. Contract conditions: Sometimes, a staff member’s contract stipulates that they are entitled to a raise when they meet specific requirements. If they meet these conditions, as an employer you must implement a pay raise. 2. Policies: In other cases, the conditions will sit under a company policy rather than an individual contract. Savvy staff will be aware of your company’s policies and employee agreements and there should always be someone on your team who is across this area. 3. Award or enterprise agreements: Awards and enterprise agreements related to pay rates in Australia may force your hand and make you implement a pay raise. Pay raises like this usually centre around minimum wage to counter the effects of inflation. Many Australian companies grant staff a pay raise at the beginning of the financial year (which falls on July 1st), after the latest consumer price index (CPI) figures are announced. The amount of the raise will usually match the rise in CPI —for example, over the twelve months to the June 2022 quarter, the CPI rose 6.1%. Another way to pay staff in Australia is according to staff members’ key performance indicators (KPI) over the year. A raise may be between two and five per cent, depending on performance. This system may be set up to rotate or follow a ‘scale’ so not all staff members receive a raise at the same time. Negotiating pay raises A staff member may come to you asking for a pay raise at any time. Unless it is related to any factor above, when you pay staff in Australia, you are not obliged to grant them a raise. If you can’t increase their pay, there are other strategies you can put in place to help them work towards a higher salary: – Help them to upskill: Explain to your employee they are not entitled to a raise at this time but walk them through ways they can increase their skills so they can increase the value they offer to the business in the future. There may be an opportunity for them to access training within the business or they may decide to independently seek further education. – Talk about promotion: Allowing an employee a pay raise may soon mean you are inundated with other employees asking for similar treatment. You may decide to discuss having them work towards a promotion instead. – Negotiate a raise: Maybe you can afford to give them a raise but not as much as they are asking for. Do some negotiating, and you might be able to find a compromise that works for both you and your staff member. What to do if you can’t afford a pay raise It’s difficult to give your staff raises when so many other business costs are increasing and profit margins are dwindling. To add to this, the superannuation guarantee has increased to 10.5%, which means your staff are receiving a pay increase of sorts. If offering more money is absolutely off the table, there may be other ways to add value to the workplace experience. Consider exploring: – Flexible working hours – Working from home options – Staff discounts – Novated car leases (where the employee salary sacrifices their car payments in order to reduce the amount of tax they pay – Real-time payments (access to pay each day rather than fortnightly or monthly for a small fee) – Equity (or company shares) – Incentives like weekly free lunches or Friday drinks – Subsidised childcare – Subsidised health insurance (most Australian businesses do not pay for health insurance) or gym memberships At this point in time, what’s most important is to be clear and honest in your communication. People always have the right to ask for a pay raise and you have the right to reject the request but there are ways to do so without impacting the relationship. Want help in understanding how pay raises work for staff in Australia? Talk to ANZPEO today.
2022 COVID surge: Should your Australian-based team be working from home?
Unfortunately, COVID has made a comeback in Australia, with cases rising to several thousand per day across most parts of the country. Hospitalisations are on the rise again, and lots of people are coming down with influenza, which is circulating as well. As a result, people are starting to feel wary about travelling on public transport and being in crowded environments again. This has put working from home back on the agenda. Should staff be working from home due to COVID in Australia? Australia’s Channel 9 reported in late July that “Employers have been called on to allow work from home and consider mask wearing in the office as a “very significant” COVID-19 wave infects hundreds of thousands of Australians each week.” The increase in numbers has led Australia’s Chief Medical Officer Paul Kelly to call on “employers to allow work from home if feasible” and for people to consider wearing masks during the winter Omicron wave. However, the Health Minister and Chief Medical Officer have stopped short of issuing or pressing for lockdown or work from home mandates. At this stage of the pandemic, businesses and individuals are encouraged to make independent decisions. Some major companies have taken the initiative to have staff working remotely again. Amongst them are telecommunications company Telstra and major bank Westpac; both have advised staff to work from home if possible. According to Telstra, those who do not work from home are encouraged to wear a face mask in the office, and the company is providing employees with face masks as well as rapid tests. Meanwhile, the Australian Council of Trade Unions is calling for work from home policies for all who can, N95 masks for indoor workers, fully paid sick leave for all who are isolating and ventilation/air purification indoors. This comes partly on behalf of hospital workers, who are perhaps the people most badly and enduringly affected by this pandemic. The choice is yours The Prime Minister of Australia Anthony Albanese is yet to issue a firm directive around working from home or mask mandates in Australian workplaces. He has been quoted as saying, “Businesses will continue to make those decisions. They need to make them on the basis of safety, but also for some people we need to recognise that they can’t work from home.” As a company that employs Australians, it is up to executives and team members to decide what’s best for people and what’s possible. Before you make a decision, it’s worth reviewing government-issued guidelines in the states where your workers live. In the state of New South Wales, for example, businesses are reminded that they have a legal responsibility to maintain a safe and healthy workplace, and manage the risk of COVID-19 to workers. Guidelines say businesses can allow staff to work from home at their discretion and must continue to follow public health orders, including the rules for people, businesses and self-isolation. When it comes to vaccines and boosters, some workers still need to be vaccinated but it does depend on the work they do and their workplace. You can see more information about mandatory vaccination in Australia here. Along with working from home and asking people to wear masks, the other thing to consider is allowing staff time off work so they can go and get a booster shot. According to advice from the Fair Work Ombudsman in Australia, where an employer can require an employee to be vaccinated against COVID-19 (for example, because of the operation of a public health order), the employer should cover the employee’s travel costs and give the employee time off work without loss of pay if the appointment is during work hours. Finally, as a business, you still have to accommodate isolation rules for those who do test positive for COVID. Under current guidelines, someone who tests positive must stay at home for at least seven days or until they have no symptoms. When in doubt… If you’re unclear about how to respond to Australia’s current COVID wave, you can always speak with your PEO. We are always up to date with the latest news, mandates and recommendations. Need to get in touch with a PEO in Australia? Contact ANZPEO today.
Minimum wage changes in Australia in 2022
If you employ workers in Australia, changes to the minimum wage may affect your business, whether you pay award wages or not. Latest news about minimum wage The minimum wage in Australia will increase by 5.2 per cent from July 1st, 2022. This is good news for workers across the country who have been struggling to make ends meet on the current minimum wage, particularly in light of dramatically increased food, energy and fuel costs. The new minimum wage for workers who do not work under an award is $21.38 per hour, or $812.60 for a full-time working week (before tax). This is a jump from $20.33 per hour. Meanwhile, award minimum wages will be increased 4.6%, with a minimum rise of $40 a week. Award minimum wages who earn above $869.60 per week will get a 4.6% rise, while those earning less will receive a $40 increase. These changes will help to ensure that workers are able to live a more comfortable life and provide for their families. The increase is marginally above inflation but takes into account the expectation that the cost of living will continue to rise in 2022. Who earns minimum wage in Australia? Only two per cent of workers in Australia earn minimum wage. According to The Conversation, a further 23 per cent receive the minimum award rates. The changes will apply to all industries, except for hospitality, aviation and tourism, which are still catching up after the pandemic. Workers in these industries will see their pay increase from October 1st. The jobs that pay this rate include cleaning positions, fruit and vegetable ‘pickers’, hospitality dishwashers, laundry workers and some retail assistants. If you employ people in Australia, it’s worth being aware that the minimum wage applies to all workers over the age of 21. Workers on supported wage systems, apprentices and trainees may also be paid below this rate. Outside of these categories, it is illegal to pay less than minimum wage. It is interesting to note that many workers are liaising with their unions to negotiate collective wage increases to accommodate the rising cost of living. Teachers in NSW are one example; they have gone on strike throughout the first half of the year to demand higher pay. Managing pay raises While the change to the minimum wage in Australia is good news for workers, it does create challenges for employers. The new minimum wage will need to be factored into business costs, and this may mean that some businesses have to increase prices or cut back on other areas in order to make ends meet. As an employer, you may experience pressure from your team to increase wages, even if people are earning above the minimum wage. If this is the case, you will need to start thinking about negotiating and figuring out what’s possible. Many workers are considering negotiating a pay raise at this time, especially because there is a skills shortage in Australia. It’s a good idea to work with your PEO to put a plan in place that will help you respond to requests. Make sure you are compliant All businesses that operate in Australia are accountable when it comes to paying minimum wage and meeting other payroll requirements. It makes sense to work with an Australia-based PEO to ensure you are paying people fairly and correctly. When you liaise with a local provider, you’ll have more confidence around this area of your business. Contact ANZPEO to find out more about employing Australian workers in 2022 and beyond.