Small business need help finding their mojo – no matter who wins the election

One of the unfortunate consequences of an election is that complex discussions get simplified into a battle over policies and money, writes Ben Thompson cofounder of Employment Hero.

The truth is, it doesn’t matter much who wins the next election. What matters is that, if Australia wants to grow and succeed, small and medium-sized businesses (SMEs) will need help getting their mojo back, and they need it now.

SMEs have lost their confidence over the past decade or more because of the constant stream of criticism they receive as ‘bad’ employers. In July 2017 the Fair Work Ombudsman announced that 72 per cent of businesses they audited in Sydney, Melbourne and Brisbane were not compliant with Australia’s workplace laws. Yes, nearly ¾ of businesses were employing people illegally.

This is absurd.

If 72 per cent of drivers disobeyed our road rules there would be absolute chaos. Nobody would feel safe. But when our workplace watchdog announces that 72 per cent of businesses are getting employment wrong, it barely rates a mention.

Why is this? Why are we not demanding the system be fixed so employers can operate with confidence? What are our politicians promising to do about this situation?

Few people realise that Australia’s employment regime is arguably the most complex on the planet, nor do they realise that:

  • 98 per cent of all businesses in Australia are SMEs;
  • 68 per cent of all jobs in Australia are provided by SMEs;
  • 0 per cent of SME business operators hold qualifications to be employers.

Consider a small retail store owner with just a few staff. They need to pay according to the General Retail Industry Award 2010. This is 75 pages of legalese that must be read and interpreted against the National Employment Standards, which is another 59 pages of complex legislation. I am yet to meet any small business owner that is qualified to read and apply 134 pages of law just to pay their staff.  

That’s just the start. They also have to understand: workplace safety laws, laws dealing with recruitment and termination, tax laws, superannuation and much more. It is completely unrealistic to expect small business owners, many of whom would be lucky to earn the minimum wage, to pay lawyers to help them manage employment. So what alternative do they have?

They simply do their best, which they know probably isn’t 100 per cent right, and they hope they will never get caught and made a public example of. Ultimately, they lose confidence and they become extremely hesitant to employ more people because doing so just increases their risk and exposure.

In the past few years, SMEs have been lumped with even greater complexity and uncertainty. Single Touch Payroll laws require employers to report PAYG and superannuation to the ATO every pay period using new technology. Recent legal cases regarding entitlements for casual employees mean that employers don’t even know if they owe their casual workers entitlements over and above what they are entitled to under the Modern Awards.

So this election we need our politicians to help SMEs get their mojo back by simplifying our employment laws and making minimum entitlements for employees crystal clear and transparent for everybody, employees and employers.

Here’s the problem in short-form: governments don’t take the extra step into helping businesses comply with those laws.

Where was the help to actually integrate Single Touch Payroll compliant software into their business? Where was the guidance for small businesses and the ongoing support to help them with those solutions?

In fact, where was the funding to help businesses with the cost of becoming compliant?

This isn’t a partisan issue, it’s an issue of how policies are constructed and spread throughout the SME ecosystem. It’s never been more important, either. Considering the massive changes that will reverberate through the Australian economy over the next 10 years caused by automation, climate change, smart technology and even faster networks, small businesses need all the support they can get.

Not to mention flexible working expectations, which carry all sorts of legal ramifications. As employees demand more flexible practices, how can employers navigate the legal minefield of what is a place of work, and what isn’t?

If small businesses are having trouble complying with legislated pay rates, how can any government – Labor or Liberal – expect SMEs to comply with the onslaught of laws related to new technology like automation and data privacy?

Whichever party wins the election needs to invest significantly more money in courses, tools, and other materials for businesses to comply with any new laws – especially employment laws.

If they don’t, it won’t be just the businesses that suffer. It’ll be all of us.

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Ben Thompson, co-founder and CEO of people management platform Employment Hero

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