News

15 Apr, 2024
Discretionary spending ‘absolutely being hammered’ by cost of living concerns
SOURCE:
Herald Sun
Herald Sun

Australian Retailers Association’s Fleur Brown says discretionary spending is “absolutely being hammered” by cost of living concerns.

“There’s a six-month or so lag effect with any interest rate increases,” Ms Brown told Sky News Australia.

“So, we’re still cycling through the impact of what happened last year when it comes to interest rates and consumer spending.

“That’s the most affected category.

“There’s a bit of bouncing around that happens.”

15 Apr, 2024
NZ recession scare drags down consumer confidence
SOURCE:
ragtrader
ragtrader

ANZ-Roy Morgan New Zealand Consumer Confidence has fallen by 8.1 points in March to 86.4.

The recent blow comes after steady gains over recent months, with ANZ and Roy Morgan citing the recent contraction of New Zealand’s gross domestic product (GDP) by 0.1 per cent in the December quarter. This led to recession headlines taking over the news cycle.

Consumer confidence is measured through monthly surveys, answered by just over 1,000 respondents.

Late-month responses to the survey were markedly weaker than those that preceded the release of gross domestic product data.

Inflation expectations in New Zealand were unchanged at 4.5 per cent, while expected house price inflation fell from 4.1 per cent to 3.4 per cent. This series has no predictive power for house prices but is a lens on the “wealth effect” on spending.

The future conditions index made up of forward-looking questions fell 8 points to 93, while the current conditions index fell 9 points to 76.

The net perceptions of current personal financial situations fell 11 points to negative 23 per cent with 20 per cent of New Zealanders saying they are 'better off' financially than this time a year ago, down 4 percentage points from February.

Meanwhile, a rising 44 per cent - up 7 percentage points - say they are 'worse off' with the net result back where it was in September last year.

A net 19 per cent of respondents expect to be better off this time next year, up 1 point from a month ago, while a net 24 per cent of respondents think it’s a bad time to buy a major household item, down 6 points, bringing a steady run of improvement to an end.

The net perceptions regarding the economic outlook in 12 months’ time dropped a sharp 14 points to negative 34 per cent with only 12 per cent (down 8ppts) of respondents expecting 'good times' for the New Zealand economy over the next year and almost half (46 per cent - up 6ppts) expecting 'bad times'. 

The 5-year-ahead measure dropped 10 points and into negative territory for the first time since May 2023 at only negative 5 per cent. This includes 22 per cent (down 7ppts) who expect 'good times' for the economy over the next five years and 28 per cent (up 3ppts) who expect 'bad times'.

“News that the economy re-entered recession in the second half of last year appears to have hit Consumer Confidence hard,” ANZ and Roy Morgan claimed. 

“Only around half of the week 4 survey responses will have come in after GDP data was released on 21 March, but the responses for that week overall were notably lower. 

“That said, the preceding weeks were also softer than February, so the monthly fall in confidence isn’t just about recession headlines.”

8 Apr, 2024
Inflation steady at 3.4pc in February amid rate pain
The Australian

Inflation has held at 3.4 per cent in the year to February, in more good news for mortgage holders and the Reserve Bank as it battles to bring consumer price growth back under control.

Analysts had expected inflation would drift higher in February, and KPMG chief economist Brendan Rynne said the third steady month reaffirmed his view that “the inflation surge is now over”.

“Despite the RBA’s cautious ‘nothing’s off the table’ message, the next interest rate move will be down – the question now is just when,” Dr Rynne said.

The latest data come as Labor and unions push the Fair Work Commission to deliver a minimum-wage increase that matches or beats inflation for 2.9 million workers, or nearly one in four employees.

“Wages growth will be crucial in the future direction of inflation and hence the cash rate,” Dr Rynne said.

An extraordinarily strong jobs report for February and RBA governor Michele Bullock’s message earlier this month that the central bank was keeping its options open had hit hopes for rates relief in 2024.

READ MORE: Unions seek 5pc minimum wage rise | Greens’ ‘break-up’ legislation warning |

Investors, however, remain convinced of a rate cut to 4.1 per cent by the September 24 board decision, with an 80 per cent chance of a second by the end of the year.

Excluding more volatile items, inflation dropped to 3.9 per cent, from 4.1 per cent, according to the latest figures from the Australian Bureau of Statistics, but another measure of underlying inflation - the trimmed mean - nudged higher to 3.9 per cent.

Behind the encouraging headline figures, however, there was plenty of evidence of the intense cost of living pressures facing households, especially for services Australians struggle to avoid.

Rental inflation accelerated to 7.6 per cent in the year to February, from 7.4 per cent in the month before, as new tenants struggle to secure properties amid historically low vacancy rates.

Petrol prices were 4.1 per cent higher over the year, above the 3.1 per cent annual rate in January.

Insurance prices surged an incredible 16.5 per cent, just above the previous month’s figure and to the highest in the history of the data.

Education costs were up 5.1 per cent, above 4.7 per cent in the year to January.

The ABS said the rise in education costs “was driven by higher primary and secondary school fees as well as tertiary education following the indexation of higher education course fees”, and noted that fees have increased around 5 per cent annually for the past three years.

ANZ economist Madeline Dunk highlighted that services inflation - a declared area of concern for Ms Bullock and her board - lifted from 3.7 per cent in the year to January, to 4.2 per cent in the latest numbers.

“The RBA would take comfort in the current trajectory of inflation, with inflation on track to undershoot their (March quarter) forecast of around 0.8 per cent. But there are some signs that we may encounter the ‘last mile’ challenge,” Ms Dunk said.

There was better news for grocery bills, as inflation in the broad food and non-alcoholic beverages category fell from 4.4 per cent in the year to January, to 3.6 per cent in the latest data.

Bread and cereal price growth remains the highest at 7 per cent, an improvement from 7.4 per cent. But fruit and vegetables were 0.5 per cent cheaper than a year earlier, and meat and seafood prices were 2 per cent down.

The more complete quarterly inflation report showed consumer price growth fell to 4.1 per cent in December, well down on the December 2022 peak of 7.8 per cent.

Jim Chalmers has said that the focus in the May budget will begin to shift away from high inflation to supporting growth, after the economy ground to a near standstill at the end of last year.

22 Mar, 2024
‘Being a director isn’t easy’: Longo tells C-suites to stop whinging
Financial Review

Corporate watchdog chairman Joe Longo has politely told C-suites to stop whinging about director duties because ultimately legal compliance and maximising profits go hand-in-hand.

“Being a director isn’t easy. If it were, anyone could do it,” Mr Longo told an Australian Institute of Company Directors conference in Melbourne on Thursday.

“Good directors run successful, profitable businesses. That’s not going to happen unless every director takes an active stance of curiosity and starts asking the right questions – to understand their business.”

The head of the Australian Securities and Investments Commission since 2021 dismissed concerns about the principles-based directors’ duties in the Corporations Act, saying decision-making involved complex judgments that were best made using high-level principles.

The ASIC chairman outlined four key questions to help people avoid ending up in ASIC’s sights.

First, are you acting honestly?

Second, are you putting the company first?

Third, do you have a continuous curiosity to understand all aspects of the company’s core business and the risks associated with it?

Fourth, are you challenging management to ensure your understanding is well-founded, and getting trusted professional advice?

“If the answer is yes – not just once, but again and again – then you will get to a point where concerns about complying with your directors’ duties aren’t keeping you up at night,” he said.

“And you’ll go a long way towards meeting the compliance challenges, and seeing past them to the opportunities and benefits.

“The fundamental reality is if you’re acting in good faith and want to run a profitable business, and not fall foul of what’s expected of you in terms of the law, that’s hard work.”

Cyber threat

Mr Longo cited cybersecurity as an example, using his speech to issue another clear warning to directors that ASIC was gearing up to act over failure to adequately prepare for attacks.

“Let me be especially clear here, it is a foreseeable risk that your company will face a cyberattack,” he said, but the increased compliance that went with the risk was also a broader opportunity.

“A major attack could destroy or at least erode consumer confidence in your company, being better prepared and more cyber resilient can only be a benefit,” he said.

“But also, as with climate disclosure, if directors in general have to be more focused and deliberate about cyber preparedness, this should also shore up the cyber resilience of associated entities like third-party suppliers.

“The point is that increased expectations don’t mean decreased profits or a meaningless list of endless tasks. They mean better business.”

The speech is the latest in a series of warnings to directors about cybersecurity. Mr Longo has been on a publicity push to make clear to directors what’s coming so that looming legal action comes as no surprise.

Mr Longo also cited compliance with climate-disclosure obligations as an opportunity rather than a threat, telling the room full of directors that having information about companies across the value chain could be used to mitigate risks and highlight opportunities to boost shareholder value.

“Not all new obligations on directors necessarily mean an increased burden. Nor do they necessarily make it harder to balance the scales between profit and legal requirements,” he said.

22 Mar, 2024
Board directors should serve shorter terms says former CBA chair
The Sydney Morning Herald

Former Commonwealth Bank and Telstra chair Catherine Livingstone has suggested directors should not serve on boards for more than nine years, warning that rigidity at the top level of companies is hurting the talent pool.

Livingstone said it was time to reconsider what is deemed an appropriate tenure for directors, suggesting six-year stints could be more appropriate to balance experience with attracting fresh faces.

There are no hard limits on how long a director can serve on a company’s board in Australia, but listed company directors are usually re-elected every three years by shareholders, and a cycle of nine years is seen as typical.

Livingstone highlighted that director tenures had been declining in the long term.

“Two generations, or 40 years ago, it was not uncommon for directors to be on a board for 15 or 20 years,” Livingstone said in an address to an Australian Institute of Company Directors event on Wednesday morning.

“One generation, or 20 years ago, tenure limits of nine to 12 years had become widespread. Directors generally do and expect to serve their full tenure. But perhaps it’s now time to evolve our thinking again.”

Governance advisory firm Ownership Matters in 2020 analysed a pool of more than 5000 directors who served on ASX 300 boards since 2005. It found the tenure of non-executive directors was lengthy, and board turnover was not dependent on company performance.

The research also showed the number of male directors serving for more than 10 years greatly outnumbered women in a ratio of 9:1.

Livingstone suggested that current arrangements could deter staff who would make “great directors” but who did not want to commit to nine years or let the company down by leaving after three or four.

“It’s not to suggest that six years should be a new tenure limit, but rather that the fixed-tenure limits being a lower bar and an upper bar results in an unhelpful rigidity,” she said.

Livingstone is currently the chair of rail freight business Pacific National. She has also chaired CSIRO and served as president of the Business Council of Australia.

She said the board directors’ time at the top had gradually reduced over the past 40 years due to the changing nature of the role.

Livingstone told the event while gender diversity on boards was important, it was not a “sufficient condition” and organisations should prioritise diversity of thinking.

“You may have a range of experience around the table but not enough ability of those directors to contribute to the specific needs of the organisation,” she said.

“I think there’s just too much ticking of the box and not enough thought around the question of diversity on boards.”

However, Woolworths chair Scott Perkins said he saw the performance of directors as a greater issue than their tenure.

“There should be no expectation that a director is appointed for 10 years,” Perkins said. “There should be an expectation that a director is appointed for as long as he or she is performing.”

Perkins spoke of the importance of having experienced directors with long corporate memories sitting on boards.

He said it was critical for Woolworths, for example, to have directors who were on the board in 2016 when “the wheels just about fell off the trolley” – in reference to the retailer slumping to its first-ever loss as a listed company – to help turn around its balance sheet.

22 Mar, 2024
3 ways to avoid candidates backing out of a job offer
HRM - The News Site of the Australian HR Institute

Recent research reveals that within a 12-month period, half of candidates have accepted a job offer and then backed out at the last minute. How can recruiters avoid falling victim to this concerning trend?

The road from engaging a candidate to welcoming them into an organisation can often feel like a treacherous one. No matter how many resources are invested into recruitment, even the smallest of doubts on the part of a candidate can derail the process and lead to a great deal of lost time and effort. 

As a result, recruiters may well breathe a sigh of relief upon hearing that a candidate has accepted a job offer – particularly those feeling the pinch from current skills shortages. However, recent research serves as a warning to employers that an accepted offer does not necessarily constitute a done deal. 

In fact, in a survey of over 3500 job candidates, one in two respondents said they had backed out of a job offer after accepting a position within a 12-month period.

The research, conducted last year by Gartner, also found more than half of HR leaders (59 per cent) expect competition for talent to intensify in the coming months, indicating a risk that this trend will continue to cause problems for recruiters seeking in-demand skills.

“What our research is telling us is that candidates today are often not as committed as we would like them to be further into the process,” says Jonathan Tabah, Director, Advisory at Gartner.

“We’re in a market right now where there are lots of jobs around and confidence in job availability is quite high. There’s also still a lot of flexibility in the marketplace for candidates – they can accept an offer in another city without moving, so they have more choice now… And [the stage where candidates back out] has continued to move back deeper into the process.”

Why are candidates backing out at the eleventh hour?

According to the research, the top reasons why candidates ditched one job offer in favour of another were greater flexibility (59 per cent), better work-life balance (45 per cent) and higher compensation (40 per cent). 

Given candidates’ strong focus on flexibility, it’s noteworthy that the uptick in employees abandoning job offers has coincided with an increase in return-to-office mandates. According to AHRI research, mandated office days increased by 11 percentage points (48 per cent) between 2022 and 2023.

“There are a lot of conversations between HR and business leaders around the trade-offs of these return-to-office mandates and the impact they have on employees,” says Tabah. “Very rarely are they also considering how this is going to make it harder for them to bring in additional talent to replace the talent they may lose as a result.

“It is incumbent upon the recruiting leaders within an organisation or recruiting agency to communicate clearly with their senior stakeholders that this is the trade-off that you’re asking us to make.”

“Friction and delay are your enemies, and that’s where we’re going to see the most attrition.” – Jonathan Tabah, Director, Advisory, Gartner

The results indicate that employers who fail to convey work-life balance as a guiding principle throughout the recruitment process also risk seeing candidates back out, he says.

“It was probably a single-digit number of years ago that we would look each other straight in the face and say, ‘You come to work as a professional. You leave your personal issues at home.’ Now, saying that would be like smoking in the office. Today, we [need to] talk about how we’re going to support the whole person.”

How can HR ensure candidates stick around after accepting a job offer?

Keeping potential candidates engaged in the hiring process is set to become a growing challenge in the coming years. 

To help hiring managers overcome this challenge, Tabah offers a number of key tips for employers to avoid top candidates slipping through the cracks.

1. Map out the hiring process

When employers observe that candidates are getting cold feet midway through the hiring process, it’s important to take a data-backed approach to identifying where and why they are losing talent.

“Where candidates are backing out of the process could be different for everyone. So it’s really important that [employers] map their candidate journey,” says Tabah. 

“Take a very diligent and thoughtful approach to understanding exactly what the candidate journey looks like. What are the steps in the process? What are the key points of friction or delay in that process? Friction and delay are your enemies, and that’s where we’re going to see the most attrition.”

Once these friction points have been identified, he suggests looking at potential process improvements based on that information and, crucially, holding hiring teams accountable for executing these changes.

2. Examine drivers of attrition 

Focusing on what candidates want is undoubtedly key to a successful hiring process. However, Tabah believes employers would benefit from paying more attention to what candidates don’t want.

“We spend a lot of our time talking about drivers of attraction when we’re talking about hiring, but I’m also a really big believer in drivers of attrition,” he says.

“Why someone’s leaving another organisation is going to give us a really important cue as to what’s important to them, what would be a breath of fresh air to them and what would make them want to come and work for us.”

For example, if an employer learns that someone is leaving due to a poor relationship with their boss, it would be useful to take the time to speak to the qualities of their soon-to-be manager, or arrange a meeting so that they can get to know each other. Or, if they wish to leave due to a stressful, high-pressure environment, you could reinforce your company’s wellbeing approach and connect them with current staff who can testify to this.

For a well-rounded approach, it’s useful to look at broader industry trends that contribute to attrition as well as the unique factors pushing an individual employee to seek new opportunities. For instance, in many industries, employees are becoming increasingly put off by employers not having formal policies in place to support flexible working. 

This dual focus on attraction and attrition allows for a comprehensive understanding that enables employers not only to attract top talent, but also build an environment that encourages long-term commitment and professional growth for existing employees.

3. Avoid the ‘us-versus-them’ dynamic

In a job market where many candidates are spoilt for choice, one thing that’s sure to put talent off is a hiring process that positions the employer as an adversary rather than an ally, says Tabah. 

One driver of this perception is a lack of transparency in the recruitment process, particularly when it comes to compensation. The impact of this is demonstrated by Gartner’s findings, which show nearly half of candidates (44 per cent) decided not to apply to a job in a 12-month period because the job description did not include salary information.

Read HRM’s article ‘How to approach a salary negotiation with a new hire.’

“Part of it is just that the lack of information makes it harder to make the decision,” he says. “But, secondly, it also calls the organisation’s culture into question. 

“It sends the signal that we’re withholding this information. We’re negotiating with you already. If you were truly transparent, and you were looking for a win-win partnership, you wouldn’t be hiding information. And everyone recognises that.” 

This off-putting ‘us-versus-them’ dynamic can also manifest in the interview process, he says, making it crucial to coach hiring managers in the way they present the employment relationship during an interview.

“For those of us who have ever been through an interview, there’s really nothing worse than feeling like you’re sitting on the opposite end of the negotiating table,” he says. 

“What [we should be] trying to do is figure out whether we can be on the same team. And recognising the opportunities to do that is really important.”

22 Mar, 2024
Traditional learning methods are failing: How new techniques can succeed
Inside Retail

With Gen Z now dominating the ranks of Australian retail workers, traditional learning models are failing to deliver for businesses. Now retailers are turning to new digital techniques that boost retention – and their bottom lines. 

Mark Eggers, co-founder of Yarno – the tech company that created a gamified team-based learning solution aimed at retail workers (and others who don’t sit behind a desk all day) – says businesses relying on outdated training formats are missing upselling opportunities. All too often, employers are discovering what their team members do not know through low sales, errors, accidents and breaches of company policy.

“The ‘one-and-done’ learning method has been proven not to work,” he explains. “Multiple studies have shown that within an hour you’ve lost 50 per cent of the information you’ve just learned and within one month, you’ve lost up to 90 per cent.”

Traditional learning methods often have overwhelming volumes of information, courses that run too long and which use outdated formats such as emails, PDFs and PowerPoint documents. The result, he says, is poor knowledge retention, minimal insights, low engagement and wasted resources of time and money. Even 11 years ago, educational researcher Dr Katy Jordan discovered that the average completion rate for open, six-week online courses was just 15 per cent.

“We are looking at ways to get across more engaging learning content because most retail workers are younger and these younger generations ingest media differently to you and me,” Eggers told Inside Retail. “We’ve got to get the information in a format that they’re used to. Text on a page doesn’t work, so ideally, you can use video and text as a combo with something fun to make it engaging.”

Yarno specialises in a gamification approach – applying mechanics, tools and techniques used in game design throughout the learning process to improve the speed of retention, engagement, and quality of the learner’s experience. 

Delivered as a multiple-choice quiz, employees can complete them in a designated time behind the scenes or – as many prefer – on a train or bus on the way to work. 

These typically take the form of two to three-week-long campaigns with daily sub-three-minute Q&A sessions delivered by their platform that uses repetition to help educate staff about almost anything – especially new products, promotions or procedures to deal with customers in stores.

Workers might be asked about the features of newly released products, for example. Any answer they get wrong will be corrected and repeated in a few days, and a question answered correctly twice over the learning period will be ‘retired’ because it is clear the staff member has recalled the answer. This is a learning style called spaced repetition that Eggers says is proven to embed and reinforce knowledge. It also helps retailers identify knowledge gaps among their staff.

Alex Barry, project manager – customer & team experience at Supercheap Auto, Australasia’s largest automotive business with 300 stores and 3800 team members – agrees. “Traditional training doesn’t show us what they originally knew or didn’t know or how they retained that knowledge over time. Supercheap identified low-performing product areas and worked with Yarno to create campaigns targeting those areas.”

One campaign improved team members’ knowledge and confidence in advising customers about auto paint and panel supplies. By the end of the campaign, the retailer’s Net Promoter Score (NPS) rose nine points in just six weeks, with the score in the paint and panel category at its highest ever. Almost 50 per cent of the stores exceeded their sales targets for the period.

Team-based learning drives completion rates

A key component in these courses is the team-based approach that can foster better relationships within groups of staff across a retail network, pitching not just individuals against each other, but store or state teams, with a leaderboard and incentives.  

“The team leaderboard for me is the larger driver because you are intrinsically motivated to want to help your team out. It’s a very Australian thing to want to pull your socks up for your mates, and get on with the job.”

Yarno’s customers see course completion rates of above 85 per cent due to the engaging nature of the content and a fostered spirit of team competition. 

Winning Group has seen an increase in sales of some products ranging from 20 and 40 per cent after deploying gamified app-based training modules. Another customer reported a 66 per cent decrease in accidents within its logistics operations. 

Edu-toks counter short attention spans

Another technique is short-form videos typically lasting less than 30 seconds, which Yarno dubs Edu-toks, a play on TikTok. “These are an engaging way to counteract increasingly shorter attention spans among learners and get key points across. They can be tailored to front-of-house or behind-the-scenes staff. For example, a forklift driver might point to different parts of the screen where distribution centre safety tips are displayed. 

“It doesn’t have to be super complex, but the alternative to that would be four bullet points on a page talking about forklift tips,” continues Eggers. “Our version is more enjoyable and relevant because the character in the video is someone they work with. It’s not some generic safety tips the company might have borrowed from another platform and tried to make relevant.” 

With an estimated 70 per cent of workers nominating training as a top priority in their work, most workers get less than 24 minutes a week of formal training. One of the reasons for this in a retail business is it can be difficult to teach staff unless you pull them off the shop floor. 

“That’s why big retailers – like Rebel, BCF, and Winning Appliances – use us, because we can deliver it in a format that can be done very quickly and at a time the worker wants to. Retailers have traditionally found it very difficult to get staff in a room because they have both casual and shift workers. If you have 300 stores, how are you going to do that at scale? It’s an expensive exercise and we have made it very cost-effective to achieve mass-scale training.”

Eggers says using high-tech, cost-effective learning models is critical in learning and development programs (L&D) at a time when many companies are trimming budgets. “It is one of the first things the CEOs strip out of the budget in a downturn because it is a short-term win on the books. Companies like us can work with their experts on the subject matter, and take the heavy lifting around the content and production at a lower rate than they can achieve with internal resources.”

Of course, as some retailers’ experiences with Yarno demonstrate, budgeting for learning and development need not be considered an expense. If sales are increased, productivity improves, accident rates fall and customers report greater satisfaction with a brand, such spending should be considered an investment with an easily identifiable return rather than a necessary expense.  

1 Mar, 2024
What could the ‘right to disconnect’ mean for your business?
HRM - The News Site of the Australian HR Institute

A right to disconnect and to work from home could soon become a reality in Australian businesses. Here’s how HR professionals can prepare.

The right to work from home and the right to disconnect from work are both currently  being considered as additional new rights for employees in Australia.

While there are a number of steps that need to occur before these rights become legal entitlements, the issues are being debated. It’s important for employers, HR professionals and people managers to understand how these changes might impact the way they run their businesses.

Currently, there are no rights either in modern awards or legislation that give working from home entitlements or the right to disconnect. Similar provisions, which were temporarily included in the Clerks – Private Sector Award 2020 during the COVID-19 pandemic, were removed after working from home directives were lifted.

The Fair Work Commission (FWC), in conducting its four yearly modern award review, is considering whether the right to work from home and the right to disconnect should be included in modern awards. They are currently seeking submissions on the potential inclusion of both rights, which are expected to be heavily supported by unions and workers.       

The next phase of the Closing Loopholes Bill

At the date of writing, the Government has secured support to pass the Closing Loopholes No 2 Bill through the Senate by reaching agreement with the Greens and a number of independent senators. The agreed version of the Bill includes the right to disconnect.      

The push to have employee protections to work from home will unsurprisingly meet opposition from some employers, particularly considering the recent objective of some to mandate at least part-time office attendance.

This has resulted in recent examples where enterprise agreements have been unable to be agreed upon without stipulated working from home provisions.

It is likewise anticipated that creating a legal right to disconnect will be resisted by employer groups and deemed difficult to manage, monitor and enforce. This is especially true for organisations that have redesigned their work structures to be asynchronous.

However, research undertaken by the Greens also demonstrates that 56 enterprise agreements already include a right to disconnect, covering tens of thousands of employees. In Australia, it was first included within the Victoria Police Enterprise Agreement of 2019. Many of the provisions in these agreements typically come with extensive exceptions, allowing business operations to continue largely unaffected.

What might the right to disconnect look like?

The legislative right to ‘disconnect’ is proposed to cover all employees, not just those covered by modern awards.

At the time of writing, we understand that the proposed right as set out in the Closing Loopholes No 2 Bill that has passed the Senate, is a right for workers to disconnect from “unreasonable” out-of-hours contact from employers.       

Under the proposal, the FWC would be empowered to issue stop orders, similar to the stop bullying and stop sexual harassment orders. If the stop orders are breached, it is envisaged that civil remedies may be imposed. The Commission would have the power to determine what is “unreasonable” contact, taking into account a non-exhaustive list of factors such as: 

  • the reason for the contact;
  • the frequency and method of contact;
  • remuneration;
  • role and responsibilities; and
  • the worker’s personal circumstances, which may include family responsibilities.

This change is purported to support a healthier work-life balance for employees. In fact, research from the Australian HR Institute, which surveyed over 600 senior HR professionals and senior decision makers, shows that almost two thirds of respondents think a right to disconnect would have a positive impact on workplace flexibility and 41 per cent already have some form of right to disconnect in place.

However, there are still plenty of points of clarity needed. For example, how this proposed change would interact with overtime and penalty rates is currently unclear.

Other considerations for HR and employers to keep in mind include:

  • The practicalities of preventing contact with employees outside their working hours, especially for global businesses spanning multiple time zones, raises logistical and management considerations.
  • An increase in employee claims if: the right is allegedly breached; or employees perceive unfavourable treatment, such as disparities in pay or promotions, compared to colleagues who remain connected outside standard working hours. This is also a consideration for employees who’d choose to work from home if that were to also become a legal right.
  • Businesses relying on flexibility for connecting with employees outside regular work hours, particularly those with global operations, may experience disruptions to their operations.
  • Employee morale may be affected if some exercise the right and others do not, leading to dissatisfaction within the workforce. This could result in a perception that some colleagues are not contributing, placing a heavier workload on those who choose to stay connected beyond regular hours.

 What might the right to WFH look like?

While working from home arrangements are not possible in all sectors and positions, if the right is included within modern awards, many employers may need to consider negotiating and entering into separate flexible working arrangements.

These may be similar to ‘time off in lieu’ agreements (being a written agreement which could be as simple as email correspondence confirming an employee’s entitlement to take time off from work in place of receiving overtime pay for additional overtime) or formal flexible work requests under the Fair Work Act.

Separate agreements may also need to consider what working from home means on an individual basis including by:

  • Expanding the definition of ‘ordinary hours’ while working from home;
  • Abandoning the requirement to agree on employee start and finish times or to agree to a specific range of times;
  • Allowing for meal and rest breaks to suit personal circumstances; and
  • Changing recording requirements in respect of timesheet reporting of hours worked.

Presently, the Fair Work Act only allows flexible working arrangements in certain circumstances such as pregnancy and/or parental requirements. The proposed inclusion of a right to work from home in modern awards would be additional to and broader than the current right, without being tied to a particular attribute or responsibility.

 Proactive steps for business to take

While the FWC considers the inclusion of these new rights in modern awards, there are proactive steps that employers, HR and people managers can take now. 

Consider:

Policies and processes

  • Reviewing and assessing current policies and processes related to working from home requests, and for managing employees working from home.
  • Consider conducting an audit on the potential impact of a right to disconnect. For example, if your organisation’s workers had the right to not respond to emails from 6pm to 8am, what impact might that have on operations?
  • Examine practical measures that your organisation could take to prevent contact with employees outside their ordinary working hours if a right to disconnect was introduced.
  • Consider what policies or procedures would need to be revised or introduced.
  • Contemplate the right to disconnect provisions that would need to be introduced to employment agreements and enterprise agreements under negotiation.

Implementation 

  • Consider establishing a system to monitor employees’ work activities outside the agreed-upon working hours.
  • Actively encourage people leaders and managers to respect employees’ time away from work and employees’ out of work time.
  • Provide training to managers to prevent any adverse action against employees who exercise the right to disconnect.
  • From a wellness and work health and safety perspective, educate all employees about the right to disconnect and any applicable business initiatives, including promoting the wellness advantages of disconnecting from work.
  • Implement internal processes for employees who choose to work outside agreed hours.
  • Communicate to all employees, and across the business, the expectation that emails and tasks should be scheduled for delivery during agreed working hours.

Business implications

  • Assess whether your organisation can comply with its obligations to employees should they request to work from home.
  • Evaluate the impact that increased working from home might have on your business, culture and employee wellbeing, and, alternatively, what impact it would have to refuse working from home requests.
  • Based on duties and responsibilities, consider what reasonable business grounds you have for refusing requests to work from home.

 What happens next?

The FWC is publishing a ‘work and care literature review’ on 8 March 2024. Submissions will be open to interested parties during consultations in March and April 2024.  

It is anticipated that the Closing Loopholes No 2 in its agreed form, including the right to disconnect, will pass the Senate. Once passed, it will proceed to Royal Assent, after which there will likely be a period of time before the right to disconnect takes effect.

Aaron Goonrey is a Partner and leads the Australian Employment & Rewards practice at Pinsent Masons, Emma Lutwyche is a Special Counsel and Jeremy Bilski is an Associate at Pinsent Masons. The advice in this article is general in nature and does not constitute formal legal advice.

1 Mar, 2024
Unemployment rises to two-year high of 4.1pc
The Australian Business Review

Unemployment has jumped to a two-year high of 4.1 per cent, after a slowing economy created a “meagre” 500 jobs in January and added to the case for interest rate cuts later this year.

Treasurer Jim Chalmers said Australians needed to brace for a rising jobless rate, but declared the latest employment statistics were not a cause for alarm.

“What we’re seeing in these figures is that the labour market continues to soften in expected ways. Our labour market has been weakening, but it’s been weakening from a really quite incredibly strong and resilient base,” he said.

Unemployment has been trending slowly but steadily higher since hitting a 48-year low of 3.4 per cent in late 2022. Underemployment – which measures the share of those with jobs but who are trying to get more hours – lifted from 6.5 per cent in December to 6.6 per cent in January, while the workforce participation rate was steady at 66.8 per cent.

“Nobody likes to see the unemployment rate tick up, but it is still very low by historic standards,” Dr Chalmers said.

As Labor’s redesigned stage three tax cuts passed through the House of Representatives on Thursday, Dr Chalmers conceded that Treasury secretary Steven Kennedy, in a meeting on December 11 to discuss more cost-of-living measures, had indicated “the best avenue for doing that was via the tax system”.

Anthony Albanese on December 21 said the government was “not reconsidering” Labor’s long-held position that they would not touch the stage three tax cuts.

“It became increasingly clear to us over the course of summer that the tax system, and particularly the stage three tax cuts, were the most effective way to provide more cost-of-living relief to more people without adding to inflation,” Dr Chalmers said on Thursday. “Our position changed at the cabinet meeting on January 23, the Prime Minister runs an orderly and methodical cabinet process.”

The Australian Bureau of Statistics (ABS) figures showed unemployment in NSW jumped from 3.5 per cent to 4.1 per cent. While state and territory level labour figures are much more volatile than at the national level, unemployment in the Premier State has now lifted a long way above the 2.9 per cent low recorded in mid-2023.

ABS head of labour statistics Bjorn Jarvis said seasonal factors might have been responsible for the larger-than-anticipated rise in the national unemployment rate.

“Similar to January 2022 and 2023, the increase in the unemployment rate in January 2024 ­coincided with a higher-than-usual number of people who were not employed, but who said they will be starting or returning to work in the future,” Mr Jarvis said.

“While there were more unemployed people in January, there were also more unemployed people who were expecting to start a job in the next four weeks.”

Economists said the new data was further evidence rate hikes were having their intended impact on the economy, and supported the case for rate cuts later this year.

CBA head of Australian economics Gareth Aird said unemployment would likely hit 4.5 per cent by the end of this year, rather than the 4.3 per cent predicted by the RBA.

Capital Economics economist Abhijit Surya said the “meagre” additional 500 employed people in the month was “much weaker” than the forecast of about 30,000.

“We suspect that the RBA will be cutting rates by August itself, rather than November as most analysts expect,” he said.

RBA governor Michele Bullock said there were “probably” some businesses who were using high inflation as an excuse to gouge their customers. Speaking at Senate estimates in response to a question from Greens senator Nick McKim, Ms Bullock said “there probably are firms that are using circumstances of lack of competition, strong demand, and, as you mentioned, the cover of higher ­inflation” to boost profits over and above the rise in costs.

The ACCC is conducting a year-long inquiry into competition and pricing in the supermarket sector.

“If you’ve got inflation back around 2 or 3 per cent, and it’s in the background, it’s much more difficult, I think, for firms to use high inflation as cover,” she said.

“To the extent that there are competition issues here, I think it’s very relevant that the ACCC’s ­engaged and involved.”

Ms Bullock repeated that the RBA’s economists found no evidence that profit gouging had ­contributed to overall inflation.

1 Mar, 2024
HR’s blueprint for strategic alignment with technology leaders
HRM - The News Site of the Australian HR Institute

Skills-sharing is a two-way street between HR and IT, with both units offering important expertise that can help enhance the other’s work. Three HR leaders share how they’re working strategically with their IT and technology colleagues.

In the evolving landscape of organisational strategy, HR professionals have traditionally been advised to familiarise themselves with the language and context of finance, enabling them to engage more strategically within their companies. In the past, this advice proved instrumental, propelling numerous HR leaders into executive and board-level positions.

Yet, as the business terrain continues to evolve, a new paradigm emerges: HR’s symbiotic relationship with IT and technology leaders. This evolution demands HR’s acumen in leveraging technology to craft enriched employee experiences and optimise or streamline cumbersome processes.

However, this shift isn’t unilateral. Many HR professionals are already adept in navigating the technological realm, while IT and tech teams stand to gain valuable insights from HR’s strategic approach to change management. Therefore, the conversation should pivot towards fostering a mutually enriching alliance between HR and IT, one characterised by strategic collaboration and shared learning objectives.

To delve deeper into this, HRM spoke with three HR leaders to learn how they are fostering this synergy within their respective organisations.

It’s time for HR’s portfolio to expand

Partnering with the Chief Technology Officer is no different to working alongside the CFO or COO, says Denise Hanlon MAHRI, Chief People Officer at Janison.

“The key is to realise that you each have a responsibility to create an amazing workplace for employees, you just do it from slightly different angles,” she says.

In a previous role at a non-for-profit organisation, where Hanlon worked as the Chief Operating Officer, she was responsible for HR, finance, technology and a variety of other support functions.

“I remember the Head of IT asking what his department had in common with HR and why we should all be ‘lumped’ together. 

“I showed him the results of a recent employee engagement survey in which IT received [feedback] from employees about slow service, a superior attitude, and a general lack of appreciation that [IT] had a role to create a place where employees could work efficiently, be treated with respect and have access to the latest technology.”

By bringing the IT remit under Hanlon’s leadership, the data told a completely different story just 12 months later. It was a “vast improvement”, she says.

Clare Murphy FCPHR, Executive Director of Organisational Enablement at EACH, a for purpose organisation in the healthcare space, also sees immense value in having a remit that extends beyond HR alone.

Murphy previously EACH’s HR Director, but over the past 12 months her role expanded to incorporate IT, finance, infrastructure, quality and risk, the national intake service, as well as HR.

“Bringing these functions together meant we have a far more holistic view of the things that the teams are doing, and better understand the efficiency gains from avoiding the issues created when there are silos” she says.

“A simple example is that recently, in order to enhance our cyber security, IT proposed a change that required passwords having to be changed every 30 days. They consulted with HR, who advised that would have a significant impact on staff who would see this requirement as onerous. 

“IT came up with another solution that provided increased cyber security without the passwords being changed as frequently. After consultation with HR and Operations, this change was approved and they are working on a staggered implementation plan together to lessen impact to staff. If there hadn’t been that consultation and the password change was just done, we would have been dealing with complaints.

“[HR] can bring different perspectives when IT is looking to roll something out, even if it’s something simple like moving to a new system. HR can work with IT to ask, ‘How is this going to impact staff and what’s the best way to roll this out and make sure we’re considering workloads and offering different ways to implement something?”

That’s where projects like this often fall down: when functions are working in a siloed manner and don’t take the time to align their plans. An HR touchpoint saved the organisation precious time, says Murphy, and HR supported the IT team to consider the technology angle from a people perspective, demonstrating that consultation with staff is a critical element of a successful technology roll out.

Hanlon agrees, saying,”Often, HR comes up with an idea and just expects that the technology team will ‘find time’ to support it. The opposite is also true. Technology teams might plan a project that will require HR support, but fail to jointly plan the time and effort needed by both teams to make it a success.”

The impact of HR and IT working hand in hand

HR leaders and Chief Technology Officers often have complementary skills, says Hanlon.

“[Our CTO’s] strengths are my weaknesses and vice versa, and we have a mutual respect,” she says.

For example, Janison’s employee engagement surveys used to run manually, which Hanlon says were time-consuming and often lacking in useful analysis that the organisation could act upon. With the CTO’s support, she implemented a tool that could automate the process.

“It just seemed obvious to me to involve a member of the technology team before we’d even started investigating the right tool for us or planning any implementation. Doing this brought to the discussion all sorts of things that, as an HR function, we wouldn’t have thought were important – like integration with other technologies, data security, API’s, etc.

“I think the reason we received such good support from the CTO was that we flagged our plans for this project well ahead of implementation and formally captured it in our respective business plans.”

Desleigh White CPHR, an experienced HR leader who has worked across many sectors including multinational engineering, has previously worked closely with her IT team to onboard new talent.

“This seems like a simple example, but when you layer the complexities of a multinational organisation, the pandemic and major global organisational transformation, it becomes more complex,” she says.

“The company was in the middle of the creation of a joint venture, where systems, processes and suppliers were all about to change dramatically, so nothing had changed for some years. Our providers were also going to change, so there was little incentive for them to assist.”

It was taking anywhere from weeks to months to get new laptops for new starters due to global supply chain issues spurred by COVID.

“[IT and I] discussed the pain points, what was possible to change, what we needed and ways we could do that. We agreed on an interim process and a new supplier for peripherals, and developed a process to have managers order these. 

“When that didn’t work, we regrouped… and identified the issues in the process. We brought the supplier in as a partner… and, together, reimagined the process. We also quietly agreed that we needed to cut the third-party provider engagement back and develop an interim process for other equipment, outside the usual guidelines, but still compliantly.”

This collaborative problem-solving meant that new starters were able to have all the necessary tools on day one.

“People felt more included, engaged and supported. They were able to connect with colleagues quickly, which was critical during the pandemic. They were able to more quickly start doing their role because the basics were in place,” says White.  

A tech-enabled workforce

While the pace of technological change means that any skills HR leaders develop around technology now will likely need refreshing in the near future, White believes that getting comfortable with AI is a skill that’s only going to become more important for HR.

“Using the various AI tools to run questions or problems through can be a great way to get started on whatever you’re working on. Right now, my preferred [AI] tool is co-pilot, [but] I had fun using ChatGPT many months ago to write a policy on the use of AI in the workplace. It was a good starting point, then I used my knowledge and skills to add value and sense check.”

White is excited about all the ways in which technology will change work in the future and thinks other HR professionals should be too.

“We will certainly be using virtual reality more in training, learning and in workplaces generally. Technology, used well, could facilitate connections between people who are not co-located.

“It will also be interesting to see where robotics is able to support people and organisations. I imagine we will have colleagues who are robots in the not-too-distant future, something to embrace rather than run from.”

See HRM’s case study into how the Defence Force is using robotic employees to streamline work. And learn how Accenture is training its employees in the metaverse.

She also sees it being a useful tool to enhance some of HR’s work in the diversity, equity and inclusion space.

“I recall a candidate who was living with a disability – one of the key responsibilities of the role they applied for was setting up training rooms, moving chairs and desks etc. What if a robot was able to do those components, enabling that person to take responsibility for other components of the role. Maybe robotics and AI will open opportunities and support diversity, equity and inclusion?” 

But this doesn’t mean that you need to become a tech whizz. Murphy is the first to admit that she doesn’t have all the technical capabilities that her IT colleagues do, but she doesn’t need to.

“I bring the lens of, ‘How do we make sure what we’re doing is considering how it impacts operations?’ ‘How many change initiatives are we running at the same time?’ ‘What are people’s workloads looking like?’ ‘Is this the best time to implement a new system?'”

What’s most important is building a trusting relationship with your IT colleagues, she says. One in which psychological safety is at the fore.

“You need to feel comfortable to be upfront, honest and authentic when you don’t actually understand something. You can say, “I still don’t understand this, but I really want to. Can you spend some more time with me to explain this?’ Then you need to be comfortable saying, ‘No, I still don’t understand. Can you explain it differently?’ It’s a good lesson for IT people to learn how to talk to non-technical people outside of IT.”

The future of HR

Over Hanlon’s 35-years HR career, she’s witnessed many significant developments in technology, but says the heart of what it means to work in HR has always remained the same.

“I’m not sure that the role of the HR function is much different to what it has always been – to help create a place employees never want to leave and where prospective employees are banging on the door to get into. 

“Technology has always enabled HR to reduce the boring, manual stuff and leave more time for the tasks that require deep thought, human interaction and more complex problem-solving. I don’t see that this will be any different in the next 10 years. But hey, I’m not even sure what I’ll be doing next week!”

APPLY NOW

Upload Resume/Portfolio

One file only.
5 MB limit.
Allowed types: pdf, jpg, jpeg, doc, docx.
One file only.
5 MB limit.
Allowed types: pdf, jpg, jpeg, doc, docx.
* Required Fields. † For Designers, Design Assistants and Product Developers please attach your Portfolio including sketches, illustrations, trend boards, finished products etc... Please send through in pdf or jpg format. File uploads maximum size 5MB.