What to pay your staff
Before you hire any staff, you will have to consider the cost to your business. Staff costs aren’t just how much you pay a person, it’s also items such as providing a safe working environment, superannuation, leave and workers’ compensation insurance.
Sit down with your accountant and make sure you have your sums right. There’s no point in employing additional staff when you won’t get sufficient return from their work to make it worthwhile.
There are different ways of working out how to pay your staff, including:
Awards
Enterprise bargaining
Salaries and wages
Salary packages.
The different pay structures
Awards
If you’ve been in business for a while you’re probably aware of whether your industry is covered by awards. However, if you’re just about to expand, you may not be sure. Besides, some of your employees may be covered under one award, others under another and others not at all.
The industrial relations system has been undergoing massive changes in the last few years and it’s not a good idea to assume anything. Make sure. Ring the industrial relations or labour and employment government department in your state or territory to find out.
Enterprise Bargaining
Enterprise bargaining, put simply, is negotiation between an employer and employees about wages, conditions and work practices. Both federal and state laws apply to enterprise agreements. In many states, enterprise bargaining is being phased out and new agreements are no longer possible.
As this area is heavily legislated, go to your state or territory industrial relations or labour and employment government department and ask them whether such agreements are applicable to your industry and what’s involved.
Salaries And Wages
A salary is a figure calculated on annual payment, rather than on an hourly basis. A wage is more of a short-term figure based on hourly and weekly rates.
You may already know what the going rate is for the kind of work you want done. If you don’t, ask your business associates to get an idea of the range for the job. Or check with your local business association or chamber of commerce.
Salary Packages
Remuneration can be “packaged” so that the employee gets benefits other than just cash in hand. For example, providing a car, uniform, subscriptions to work-related journals, health and fitness programs or accommodation can all add to the attractiveness of a job while having significant tax advantages for both you and the employee.
Even the smallest of businesses can think in this way. Cinema tickets, a bottle of wine and dinner for two at a good restaurant are all rewards that can be offered to employees in return for reaching certain goals.
Resumés or applications?
Once you have considered the cost of the new staff person and how that person will be remunerated, you are able to proceed to the next stage – finding and hiring the right person. There are two main ways for you to choose appropriate applicants. You can ask people simply to send in a resumé of their work history and make your selection from there.
Or you can ask them to respond to the Job Description (often called Selection Criteria) which you will send out to them. This usually means they will have to write a paragraph or two about each of the points in the selection criteria. They will explain how their experience and knowledge is relevant to your job, giving examples from their work history. It’s usual to ask for their resumé to be included with the application.
Either way, make sure you ask for the contact details of three referees.
Pros and Cons:
A resumé:
No interaction between you and the applicants until you receive their resumés, which means less time spent on the process
Not as much information about the applicants compared to responses to the Job Description.
A Job Description application:
You need to give people a longer response time since they will have to prepare an in-depth, written document. Usually this is at least a fortnight but typically three weeks from when the ad first appears.
Someone will have to prepare application information (it could simply be the Job Description and a request to address each of the points in it, in writing), receive requests for the application information and send it out
You will have to read the applications and sort them.
Sorting resumés and applications
Once you have the resumés and/or applications, you have to sort them.
Look out for:
Holes in the story: if there are large gaps between jobs in resumés this might mean they’ve been in difficulties or simply that jobs aren’t easy to find these days. Make sure you don’t dismiss applicants because they’ve been raising children or caring for relatives.
Vagueness: sometimes you just can’t work out what the person has actually done because of the way the document is presented (perhaps like an essay, or under a series of confusing headings). The best type has a clear history laid out in chronological order. If it’s an application, it answers the questions directly in plain English, with relevant examples.
No cover letter: it’s usual to get a cover letter which will emphasise one or two of the applicant’s desirable features as well as mentioning the job being applied for. If you don’t get a cover letter, it may indicate naivety or someone who does exactly what is asked of them.
Bad presentation: if the resumé or application is poorly presented it might mean that the applicant has no eye for detail or pride in their work.
Job changes: if the resumé shows that the applicant has had many jobs, it might mean they’re quickly dissatisfied or have other problems. Or, it might be the kind of industry they work in. If you’re unsure what sort of person does the kind of work you want, and what’s typical, ring the industry association and ask.
Different careers: similar to the above, this might indicate someone who’s never satisfied or has no clear goals. However, a history of job changes is common in younger applicants as they find out what they want to do in life. Increasingly, too, it’s common for people to change careers three or even four times in a lifetime.
Fitting to size: if you read a resumé that seems as if it’s been made to fit the job, then maybe it has! Some people will do just that, working out from the briefest of hints the kind of job history you’d be looking for.
It’s a good idea to reply courteously to everyone, thanking them for applying. After you’ve sorted out the unsuitable applicants, make a short list of your preferences, perhaps three to five people. Ring them and arrange for them to come in for an interview.
Interviewing Prospects
It’s usual to interview between three and five people for a job. Remember that an interview can go for an hour, or sometimes longer, so it represents a sizeable amount of time. This must be weighed against your desire to get the right person for the job.
The following format works well for a job interview:
Prepare your questions: use the job description as the basis. It’s okay to ask the same questions that applicants have answered in their applications, since you’re interested in seeing how they interact in person. A sample list of questions is given later in this section. Think of other questions you’d like answers to, but remember you are not permitted by law to ask questions about the topics below:
Whether they are able to do the job because of their gender (some discrimination is permitted for particular jobs. You will need to check with your state or territory government department responsible for labour and employment regulations)
Whether they’re too old or too young for the job (except for junior rates of pay, which you’re allowed to specify)
Whether their religion will affect their ability to do the job
Whether their marital status will have an impact
Whether their race or nationality will hinder them or cause problems (such as their ability to speak English well or not. Translating and interpreting services are available nationally. Check the White Pages.)
If they subscribe to a particular type of political opinion or membership
If they have a physical, intellectual or other disability. (You can ask questions such as “This job requires lifting 20 kg occasionally and standing on your feet for eight hours. Would this pose any problem for you?”)
Whether their medical history will hamper their ability to do the job
What their sexual orientation or preferences are
Whether they are a parent or not, or plan to be.
If you are unsure about the suitability of a particular question, ask yourself this – is it directly relevant to the job? For instance, asking if someone is married or not may seem like an innocent question but later it could be construed as discriminatory. A person’s marital status does not usually affect a person’s ability to do a job.
You can ask questions about whether they have criminal records, but if they do (they don’t have to tell you), you can’t take that into account when assessing their suitability for the job, nor can you disclose any lapsed convictions to anyone else. A lapsed conviction is an adult conviction more than 10 years old or a juvenile one more than five years old (as long as there’s been no conviction since and the maximum sentence for the original offence was not more than 30 months).
Select a suitable time and place to hold the interview. Obviously, your busiest operating period will not be a good time. A quiet room, if it is available, is good.
If you are going to test the applicants for certain skills, such as typing speed, you need to give the same test to each applicant. You may want to let the applicant know when you set up the interview that a test will be given.
Open the interview. Set the applicant at ease as much as possible by thanking them for attending and offering them tea, coffee or water.
Start with the facts. Before you hear from them, tell them briefly what the job involves. Include the following:
Brief outline of the business (when it started, main business activity, number of employees and locations, etc.)
A detailed run-down of the position’s duties and expected results. For example, a sales assistant might be responsible for serving customers and have a personal sales target of $2,000 per week
Other people, departments, clients who they’ll be expected to work with and the manager to whom they’ll report
Show them around the working environment or describe it to them
Mention any future changes, perhaps in the business plan, which will affect their role. For example, major expansion plans leading to more responsibilities
Outline the hours and whether there’s flexibility available or overtime needed
Discuss restrictions on holiday dates owing to expected busy periods
Cover any other particular expectations or benefits of the position.
You do need to be careful about what you say about the job. If you make careless promises or use sloppy language the applicant could claim you made an offer that had certain conditions attached to it.
It’s illegal to act in a way that could mislead job seekers on things like the availability, nature, terms or conditions of the job. Only discuss items that are clearly known. If you’re uncertain about something, say “subject to negotiation” in response to any questions about it. This is because a contract of employment is often considered a mix of written documents, spoken words and the customs and practices of the particular employing organisation.
Questioning. Remember to ask both fact-finding and general questions so that you get a reasonable idea of the type of person and his/her personality and whether this individual will work well with you. Questions you can ask include:
What skills do you have that would be beneficial to this position?
Tell me about your last job
What did you like the least about it?
What did you like the most about it?
What contributions or improvements have you made to your current/last job?
Why did you leave?
Why does this particular job appeal to you?
What appeals least to you?
Giving information. The interview will inevitably lead to more questions from the applicant. Make sure you anticipate what questions are likely to be asked and be ready with answers. For example, they may ask about salary specifics, hours, bonuses, car parking, uniforms or leave arrangements.
Closing. Thank the applicants for their interest in the position. If you’ve worked out during the interview that the applicant isn’t suitable, discuss this now and give some reasons. For example, not enough relevant experience for the job.
After The Interview
After the interview draw up a shortlist of the preferred applicants. If you’ve interviewed five people, limit the list to three. If you interviewed three, narrow it to two.
Use objective criteria such as their experience, qualifications and real life examples provided in the interview. But don’t neglect your “gut feelings” about someone. Your intuition is important too.
Keep a record of your reasons and select your preferred applicant.
If necessary, interview the shortlisted applicants again.
Ring the referees and ask them about your preferred applicant. Because they’ve agreed to be referees, they will probably be ready to speak favourably of the applicant. They may be a personal or family friend rather than a previous employer. Also ring previous employers who aren’t listed as referees but are on the resumé. They’re not obliged to give you a reference but you will probably get an honest opinion about the applicant from them. Let them know that the applicant didn’t list them as a referee but that you’re checking yourself.
Issues to cover when doing a telephone reference check include:
What is the nature of the relationship between the referee and the applicant?
How long has the referee known the candidate?
Can the referee give some specific examples of the applicant’s performance at work?
How motivated is the applicant?
What are the applicant’s particular strengths?
What are the weaknesses?
Don’t reject other applicants until the preferred person has accepted your offer. You may have to resort to your second choice.
Once your preferred applicant has accepted your offer, then contact the others and let them know the outcome. Give them a few reasons why they weren’t chosen.
Employment offer and letter
Once you’ve made a verbal offer and it has been accepted, it’s important to put it in writing.
The person receiving the offer must make an unconditional acceptance of the offer before a contract of employment exists. In the case of a written offer, the offer is accepted once the agreement is signed by the employee and returned to you.
If the employee will be covered by an award or enterprise agreement you need to provide them with a letter of appointment with a standard set of basic conditions attached.
In the letter, emphasise that the contents of the letter of employment comprise the actual offer of employment. This avoids any possible conflict with statements made during the interview or at other times.
It’s also important to get the wording just right. For example, the letter should cover these points:
It should say: “we offer …” rather than “we confirm our offer”
It should state that “acceptance is conditional upon signing and returning this letter” or “… upon supplying proof of qualifications/work experience” (or whatever is required)
Once it is signed and dated make sure you and your new employee both have a copy.
Personnel checklist
Use the following Managing Personnel Checklist to help you during the hiring process.
| Task | Completed |
| Analyse your cash reserves and the amount you will need to employ an extra person to see whether the business can afford it. | |
| Analyse any other conditions and the costs which will be incurred, such as additional furniture, space, equipment etc., as well as any work-safe procedures which will have to be introduced. | |
| Work out what tasks can or cannot be delegated and work out what type of person you will need. | |
| Create a job description for the new employee. You can also use this as a guide for the interviewing process. | |
| Decide where and how you will advertise for the new employee. | |
| Screen resumés or job description applicants for suitability. Set up interviews. | |
| Create a list of questions to ask prospective employees during an interview. Keep in mind discrimination issues. | |
| Put in writing any offer of employment, and the conditions you have made to the prospective employee. Make sure it is signed and understood. | |
| Establish any training a new employee might need and what the cost, if any, will be. | |
| After a certain length of time, conduct performance reviews of employees. Establish clear and achievable goals for each employee. | |
| Monitor employees’ progress and offer incentives, if needed. | |
| If you are experiencing poor employee work performance, reassess the performance review and ensure the employee is offered the opportunity to improve. | |
| If you are considering dismissing an employee, consult with the appropriate government department, your legal adviser or employer association before taking any action. | |
| If an employee resigns, ensure the resignation is in writing and also the acceptance. |
