What do your staff want, exactly?

If you look at some of our past blogs, you will see that we at Skye Recruitment have talked about how to retain the staff you have engaged. And we make no apologies for raising the subject again, because it is such an important topic, affecting the most precious and fickle asset you will ever have.

We all know that it's getting harder, and not just here in Australia, to get good, reliable, well-trained people to fill the ever-increasing number of vacancies that are opening up. Once we have got the people we want, we need to try as hard as we can to keep them, because there are always other businesses out there who will snap them up in a flash.

Traditionally, the approach has been to seduce potential employees with the promise of good wages, generally 'spiked' with a few add-ons such as corporate housing, free trips back home, generous holidays, etc. But these cost significant amounts of money and impact on the balance sheet and on the price of the product. Also, when you pay an employee three times what he or she can realistically spend in a year, what is the real attraction to them of being offered, say, four times that amount?

Well, have a think about increasing the job satisfaction element. We admit that this is, perhaps, a harder option than offering more money, but it can pay serious dividends in both reducing employee wage expectations and increasing the chance that they will still be with you in 12 or 24 months time.

Over the last ten years or so, a number of organisations have emerged, such as Employer of Choice, Excellence for Diversity@Work, Best Place to Work and so on. They all have, in common, a desire to help companies improve the workplace by improving the way in which management of a company looks at its staff, sometimes with a particular slant towards minority groups, but always with the idea that people who want to work for a company are more likely to stay with that company.

So, to start with, a company should look at its brand image. Every company, we suspect, will have done this as far as its intended customers are concerned, but what about having an employer brand?

According to the book 'Employer of Choice', by Herman and Gioia, an Employer of Choice is one that people will choose to work for, who will choose to dedicate themselves to your success and who will choose to stay with you, even if they are being approached by other companies offering better pay and/or benefits. An Employer of Choice will inspire talented people to work for them and stay with them.

In 2001, the University of Sydney published a report into Australian workplaces ('Simply the Best Workplaces in Australia'), which identified 15 main factors that set the excellent workplaces apart from the rest. Amongst these factors are the quality of working relationships, clear values set by the company, a feeling of personal safety, and a sense of having responsibility and control over your own work, and that position being respected and accepted by others.

Recently, The Defence Force was nominated as a 'Dream Employer' in a national survey, after years of struggling to attract good quality staff. It turned itself around by examining how it marketed itself – in other words, looking at the image it was 'selling' to potential recruits – and found that only 38% or so of applicants were motivated by self-interest. Surprisingly, some 56% were attracted by the prospects of training and development, indicating that potential employees are valuing longer-term stability and security more highly than simple remuneration.

This leads us back to the matter of employer branding. We would suggest that companies who want to engage more staff should move away from the traditional approach of advertising for what they, the companies, want and look more at advertising what they can offer to successful applicants. Of course, you have to follow through, so that this approach requires a company to properly understand what employees really want, in today's economic climate, and to make good on their advertising promises by creating the environment for which the employee signed up in the first place.

And that is how you create an employer brand. Once you can be seen to keep your word, and create an environment in which employees aren't turning over at a rate of knots, then your reputation will spread before you, the awards will follow (which of course can then form part of future advertising campaigns) and, who knows, you may end up with more good applicants than you can take on!

Who’s going to talk to your clients?

When recruitment agencies take on new staff, it is usual for them to complete a contract of employment. It is also usual for these contracts to include, amongst other things, details of what the employee can and, more importantly, cannot do when that employment ceases. And that is when problems can often start, especially if you and the employee have parted on bad terms.

Problems often start when we look at what are known as ‘restraint of trade’ clauses. These clauses, common in contracts for many occupations, try to lay down restrictions on where and for whom the, by now ex, employee can work - the idea being that he or she should not be able to cherry-pick all your best clients and use them for the benefit of the next job.

Firstly, it makes very good sense to treat your employees well whilst they are with you - aside from the obvious reasons, this may also reduce the likelihood of their trying to damage your business when they have left you. Whilst there are legal rules about what an ex employee can do, in terms of how their actions can affect your continuing business, it is a fact that a disaffected ex employee can be damaging to you, can cost you a lot in terms of customer goodwill, trust, and so on, as well as having a serious financial impact on your balance sheet.

Secondly, you should be thinking very carefully about what you are putting in to your employment contract, because:

• You don’t want to put in provisions that are illegal;

• You don’t want to put in provisions that are so onerous that you won’t be able to monitor whether or not your ex employee is complying;

• You don’t want to give your employee the impression, as soon as he or she starts to work for you, that you are an overbearing employer who will try to ensure that the employee will never, ever, be able to work again in your line of business.

Let us say, for example, that you have made a job offer to Joe, that he has accepted, and that you have handed him the employment contract to peruse. (Yes, Joe must have the chance to read this, by himself, before he signs). After all the talk about pay, holidays, super contributions, disciplinary procedures and so on, he will get to the bit about what conduct is expected of him when he leaves your employ. Here he will find the restraint of trade clause which, usually, will say for how long he is prevented from working for a competitor firm, within what geographical radius this restriction is to apply, whether or not he can work for one of the firm’s clients, and so on.

This is where troubles so often arise, and unfortunately there is a lack of good federal law on such matters, so that to find out what you can and can’t restrict very often relies on state case law. Fortunately, however, the large number of cases that have come before the courts over the years have resulted in some degree of convergence between the states, and so some general guidance can be given concerning restrictions in the employment contract. New South Wales has gone one stage further by enacting the Restraints of Trade Act (1976) to formalise matters – to date, Queensland has made no comparable legislation, instead relying on common law principles.

Restraint clauses must, firstly, be reasonable in their scope and duration. What is ‘reasonable’, of course, is a matter of judgment given the circumstances involved but you cannot take away a person’s ability to work in the area for which they are trained and in which they have experience. You can, however, delay their ability to return to that type of work for such time as would reasonably allow you (the former employer) to cement your relationships with your clients to try to prevent them being lost to the ex employee, or to sever that person’s connection with those clients. Periods of 6 months or 12 months, for example, are often seen in restraint clauses and the courts have, in individual cases, found those periods to be reasonable.

What sort of geographical area is reasonable? This depends very much on what sort of firm you operate and over what sort of area you are represented. If you have just one office trading out of a village, for example, and you are catering to local clients then you might find it difficult to stop your ex-employee working in a different state, or even a different part of the same state. On the other hand, if you are a national company with national or international clients, then a restraint applying to the whole of Australia may well be regarded as reasonable.

The situation in New South Wales is special, because the existence of legislation means that the courts there have discretion to reduce the severity of unreasonable provisions within a restraint clause to a reasonable level. Courts in other states and territories do not have such discretion, so that if a restraint clause is held to be unreasonable then the only option available to the courts is to set the offending clause aside.

That is why ‘cascading clauses’ have come in over recent years. These contain alternative time periods and geographical areas, such as “… the employee is not to work in the recruitment industry (or whatever) for a period of 1 year, or 2 years, or 3 years or such period as the employer shall deem appropriate and nor shall he be able to seek employment within the recruitment industry during such period anywhere in Queensland, or Australia, or worldwide, the decision being subject to the employer’s discretion”

Outside New South Wales, the Courts can select any of the options given by the clause (assuming any are found to be reasonable) without the whole clause failing completely.

Incidentally, and for those on fixed term contracts, recent case law indicates that the restrictions within a restraint clause apply from the date of termination of employment, and not from the end of the contract period.

Whatever you do, as an employer, do not try to put in conditions or restrictions that are nothing to do with the protection of your legitimate business interests. Any such matters either belong elsewhere in the contract (such as expectations of conduct or dress) or in the waste bin! And don’t forget that an employee is entitled to take with him, for the benefit of his next employment, the skills and experience he has hopefully gained whilst working for you. All that you can try to protect is the confidential details, client relationships, etc., that he acquired during his work for you.

Also, as the employer you must not breach your own obligations under the employment contract. If you do, so that the employee would feel justified in ending their employment with you, then you may well find that your post-employment restraints are unenforceable – and you might find yourself on the wrong end of a constructive dismissal allegation.

If this all sounds a bit heavy, just remember that your employees are to be valued and treasured, not feared. Don’t try to tie their hands too severely when they leave you, because it will cost you time and money to fight a battle you may well not win – and you will gain an enemy you could really do without! Competition is healthy, and if you can gain a reputation for excellence and propriety in the way you conduct your business, you’ll always have plenty of work.