How do you deal when a key employee resigns from the company, or worse, decides to go to your competitor?

For small businesses, the impact of a key employee leaving can be significant. The impact on the business will be are the more obvious if the one leaving is client-facing.

According to HR experts, the best way to handle this is for a business to acknowledge that employees will quit sometime in the future, and that more often than not it would happen without your prior knowledge.

Conducting constant conversation with employees about their goals and dreams is a good idea, but there is minimal effect when this is done in a proper setting in the pretext of a performance evaluation.

As an alternative, maintain some kind of formal system for reciprocal feedback and review and at the same time ensure that you are talking to your team members on a regular basis about what their goals are with their function.

Reasons Employees Leave

Nowadays, people resign from their jobs sooner and more frequently, particularly if they are younger. You’d be disappointed if you expect people to remain with your company for five to 10 years.

In most cases, the main reason why people leave jobs is not because of how they were being paid.

What was discovered during exit interviews is that the key reasons people go is the training and the manner on how they were managed. They were not being given the opportunity to grow and learn, or the way they had been managed was not right.

It was also found that a company making a counter-offer of higher salary to the employee doesn’t work very often. In most cases, when the employee does accept the counter-offer, they still leave within six months anyway.

People look for intangible things from their role, which they get from having constant communication with them about their role.

Uncertain business

The key is to be prepared, if a key person in your organisation is leaving and you can’t do anything about it. Businesses must carry out a risk audit, drawing up the roles and responsibilities of each employee.

Ask yourself what the impact to your business would be if employee X walks out tomorrow? Does this person do a task that only he or she can do? Do they have several clients that need to be informed of their leaving?

The audit will give you a rough summary of the skills and capabilities that you have to take care of in the short and medium term should a key employee resigns.
This will put you in a better spot to come up with a strategy.

An essential thing that you can do if a key employee resigns is to have an exit interview. This can be done by you, but an independent party will most likely obtain more truthful views on an employee’s time with the company.

The next course of action

It can be disturbing when a colleague resigns and you didn’t get the reason for their leaving. This lack of information can result in office gossip, amplifying the complaints the employee may have had. By being open and transparent as much as possible about the reason why the person resigned, you can provide the right information and handle the narrative.

It is also important to have a plan for your next course of action.

Provide employees the information about what you are going to do to handle the person’s leaving. For example, you can inform them on when the employee’s last day in the office is, when you will begin the hiring process for the replacement, or the date you expect to have a new person on board.

Lastly, if the employee is leaving to take a post with a competitor, make sure to run by them again any IP protection or confidentiality provisions in their contract. While not offering full protection, this would protect you in some ways.

After all of these, don’t forget to rally the troops. Any time that something bad happens in the business, getting people together is crucial. This may even allow you to give someone else the chance to fill the void left the by employee’s resignation.

If you are in need of accounting and other related services, contact PJS Accountants. We offer accounting and other bookkeeping services to individuals and companies, big and small. Allow our team to evaluate your business and advise you on the right measures to create an excellent financial management strategy for you.

A number of very important changes have recently been made by the Fair Work Commission to annual leave entitlements for employees contained in the Fair Work Act 2009.

It is now critical for you to familiarise yourself with these changes because:

• The changes are now officially authorised for implementation.
• Prosecution and penalties apply to those who will not comply.
• Employers must now update their existing annual leave policies and procedures.

Below is the detailed explanation for each important change:

New Cash out Policies

For the first time, all employees covered by the Modern Award are now entitled to cash-out a part of their accrued annual leave. However, there are four very strict rules to follow in order to cash out:

1. Employees can only cash out a maximum of two weeks’ annual leave every 12 months.
2. An employee must always have a remaining balance of at least 4 weeks after the cashing out has been processed.
3. Each agreement to cash-out annual leave must be recorded in writing, and
4. The amount paid to the employee must be no less than the amount they would have received had the leave been taken.

The following must also be noted by all employers:

• Employees under 18 years of age will also need their parent / guardian to sign the cashing-out agreement, and
• Employers remain strictly prohibited from coercing or misleading employees into cashing-out their accrued annual leave.
• A small number of Modern Awards are still subject to variation to permit cashing-out of annual leave. Always check the applicable Award carefully.

The cash-out leave policy is still in effect for employees who are not covered by either a Modern Award or an Enterprise Agreement. However, it is subject to the separate rules contained in section 94 of the Fair Work Act 2009. These rules are similar as those listed above, however there is no limit on how much annual leave can be cashed-out in each 12 month period.

Excessive Annual Leave

The issue of unwieldy leave balances is common in many businesses. With the latest changes, employers will now find it easier to guide employees to take annual leave and thus minimise, or do away, with excessive leave balances.

What is ‘excessive leave’?

• If the employee is not a Shiftworker: 8 weeks’ annual leave
• If the employee is a Shiftworker: 10 weeks’ annual leave

Most, but not all, Modern Awards now have a ‘model directed leave term’. This new provision will permit employers to direct an employee to take annual leave. As is the case with cashing-out of annual leave, very strict rules apply:

1. The employee and employer must firstly meet with one another and discuss ways of reducing the excessive leave balance. If they’re unable to reach agreement on when or how annual leave should be taken, your business can then direct the employee to take some of their annual leave. This is referred to as ‘directed annual leave’.
2. The directed annual leave period must begin:
   • no earlier than 8 weeks, and
   • no later than 1 year from the date the annual leave direction is issued by your client
3. The directed annual leave period must be at least one week long, and
4. The employee must have at least six weeks of annual leave left after the directed leave period has been completed.
5. The Employer’s direction must not be inconsistent with any leave arrangements already in place. This includes any annual leave policies or procedures which apply in their workplace.
6. An employee may subsequently request annual leave despite the employer’s prior direction for it to be taken. If this happens, the employer must disregard their previous direction when considering the employee’s new annual leave request, and in the case where an employee has had an excessive leave balance for over 6 months and the employer has failed to issue a way for the leave to be taken, the employee is allowed to unilaterally take some of their leave. In this case the same rules as mentioned above for employer-directed leave will also apply.

Leave in Advance

Under most Modern Awards, employers are now allowed to grant their employees with annual leave prior to that leave having been accumulated by the employee.

Notably, the new ‘model clause’ also specifically permits employers to deduct any subsequent ‘annual leave debt’ from the employee’s last pay if their employment terminates prior to their accrued annual leave having been restored to a positive balance.

The following rules apply to annual leave provided in advance of accrual:

1. The mutual agreement must be recorded in writing.
2. The agreement must confirm the amount of leave in advance being provided, the date when that period of leave will commence.
3. The agreement must be signed by both the employer and the employee, as well as the employee’s parent or guardian if they’re under 18 years of age, and
4. A copy of the agreement must be kept in the employee’s records.

Payment of Annual Leave

Several Modern Awards have historically required employees to be paid their full wage or salary in-full and upfront when they begin a period of annual leave.

Most Modern Awards applying this rule have now been changed to permit employees who are paid via EFT to continue getting their wage or salary payments ‘as usual’ during their period of annual leave.

Any advice stated above is of a general nature only. For guidance on your individual business situation, consult with your human resources department or accountant.

PJS Accountants offer accounting and other bookkeeping services to individuals and companies, big and small. Allow our team to evaluate your business and advise you on how to create an effective strategy for employee annual leave management. For enquiries, contact PJS Accountants.

Our attention space has been one of the major casualties of the information age. According to a Microsoft study conducted in May 2015, an adult human’s average concentration span had decreased from 12 seconds in 2000 to only 8 seconds in 2015. Putting this finding into context, the attention span of humans is a second shorter than that of a goldfish, which has an attention span of nine seconds.

The constant barrage of emails and phone calls is relentlessly assaulting our ability to concentrate. Moreover, social media has accustomed us to frequently change tasks and divide our attention. Being frequently distracted can put our mental health at risk as well as our physical well-being.

Danger Posed by Distractedness

A Pew Research found that in 2015 alone the number of pedestrians in the US who were seriously injured or died as a result of wandering into traffic while looking at their phones totalled 8,000. In Augsburg, Germany, stop lights have been installed at busy intersections for pedestrians who are distracted with their phones.

Impact on the Workplace

Office workers are interrupted every three minutes recent studies have found. Once interrupted, it can take about 23 minutes to get the focus back on the original task. Whether it’s the chat between colleagues within earshot that you can’t tune out, the never-ending meetings and memos or a co-worker stopping by your desk to ask a question, the current open-plan set up in offices is tailor made to break focus and concentration.

Here are five tips to fight this frequent attack of distractions and interruptions, especially if you are working on detailed or creative tasks:

1. Deactivate notification for new messages for email, text messages, Facebook and LinkedIn. Your work life will be transformed by following this one tip alone.
2. If you have an office door close it and ask everyone not to disturb you unless it is a real emergency.
3. Turn off your mobile phone and stand firm against FOMO (Fear of Missing Out) and remind yourself that it wouldn’t be the end of the world if you are incommunicado for a while.
4. Save a time in your day for intentional thinking. Intel recently launched a program letting employees set aside several hours each week for ‘heads down’ work. During this time, employees can choose not to reply to emails or join meetings. The results were really positive, as within the first few months after the program’s launch a patent-worthy innovation was developed by an employee during ‘heads down’ hours.
5. Be in charge of your email. Consider using an email management tool such as SaneBox if you always end up being a slave to your inbox. By using SaneBox or similar tools such as Mailstrom, Alto or Inky, you can control the frequency and flow of email communication. Alternatively, place clear restrictions around your access to email during the day. Many people have become very productive by developing a habit of checking their email for only 20 minutes, four times daily. Between these periods, their ‘out of office’ notice is turned on informing when they will check their email next so people know when to expect a reply.

To be able to establish momentum and slip into a low state, it is important to be able to concentrate and focus intensely on critical tasks. Remember these words from famed American author Og Mandino: “It is those who concentrate on but one thing at a time who advance in this world”.

If you are in need of accounting and other related services, contact PJS Accountants. We offer accounting and other bookkeeping services to individuals and companies, big and small. Allow our team to evaluate your business and advise you on the right measures to create an excellent financial management strategy for you.

A major factor when deciding between using a recruitment agency and recruiting using in-house systems is COST. The hiring process involves many types of costs, and all of them can pile up. One type is the outlay to advertise your position, which can be expensive, if done incorrectly.

Here are three tips to remember when undertaking your recruitment campaign:

1. Posts outside of mainstream job boards too

The quality of responses you receive will depend on where you advertise your vacancy. You may immediately post on mainstream job boards, but consider your position and the places where your prospective applicants may be searching. Many people blow their recruitment advertising money on job boards that they know because they are popular, not because they’ve checked candidate traffic or quality. Check out niche job boards. While some may be more expensive than mainstream job boards, but if you can find your target candidates there then it’s a good use of your money.

2. Don’t forget that an employee may not be quick to manage your posting

You have to constantly check on candidate quality if you want a well-managed recruitment campaign. Don’t wait until the end of your allotted advertising month to assess your applicants. Do it as you go. If you think that you or any of your staff don’t have the time to check the campaign every week, consider how much you would lose, if at the end of the moment you discover that you have lost a most deserving candidate to a more diligent employer.

3. Review your figures

You may be wasting so much in recruitment advertising by not bringing in the deserving candidates. You’ll never know if you are spending your advertising dollars right if you neglect to do a report at the end of every campaign to identify which job boards gave the best results. You can avoid making the wrong advertising decisions if you ask your candidates where they saw your job ad and make a month-on-month comparison.

The recruitment process, particularly job advertising, is one area where there is no need to waste money. If you want to know if your advertising dollars are being spent in the right manner, talk to your accountant or call PJS Accountants. We offer accounting and other booking services to individuals and companies, big and small. Allow our team to evaluate your financial situation and advise you on the right measures to gain repeat business. Contact PJS Accountants for enquiries.