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Complaints over dismissals are becoming a sapping force on businesses, and as they proliferate, business owners need to instill their own safety measures, or suffer the inevitable consequences.
A survey by the State Chamber of Commerce (NSW) last year gives some frightening data for business owners.
In the year ending June 2003, one in four businesses had to spend time avoiding or dealing with a NSW unfair dismissal issue. Of these, 23 per cent had to spend a week on the issue.
The survey also confirms what most business owners have found out the hard way - complying with Government tax related paperwork, complying with Occupational Health & Safety requirements and fighting unfair dismissal claims comes at a high cost to business.
It was found, not surprisingly that the most time consuming tax for business is the quarterly Business Activity Statement, which takes the median business up to 60 hours each year to complete.
The median business took up to 52 hours per year to deal with payroll tax. However this result was affected by the fact that not all businesses pay payroll tax. For only those businesses that pay payroll tax, the median time was up to 130 hours per year.
It was found that 30 per cent of businesses with one to five employees pay payroll tax (in NSW), increasing to 40 per cent for businesses with six to 20 employees and 90 per cent with 21 to 99 employees.
Occupational Health and Safety occupied up to 52 hours per year for the median business. This tied with the time spent complying with superannuation regulations, again up to 52 hours per year. Around half of the respondents spent one to two hours in the fortnight before the survey dealing with superannuation.
A large part of the paper-work falls on the business owners themselves. For small business with five employees or less, the business owner does virtually all the paperwork.
It means businesses spend over six 40 hour weeks a year on these three issues.
For larger businesses with six to 20 employees the business owner deals with all human resource issues in 80 per cent of cases.
For businesses with 21 to 99 employees 40 per cent still have the owner dealing with all human resource matters.
Whilst the survey of over 500 businesses only included New South Wales companies and NSW State payroll tax statistics, the findings would be similar in other states.
All of this is a very significant amount of owners’ time that could be better spent on growing the business. Given the returns that can be expected from such growth, compliance is a very high cost indeed to small business.
With little sign of relief from all of this red tape it seems the only answer is to carefully measure the owners’ time spent on these matters and compare it with the cost of either full or part time employees or an outsourced service.
Copies of the State Chamber of Commerce (NSW) surveys can be found in the reading room on our website, www.hlb.com.au.
Dennis Mattiske has been a partner with accountants, business advisers and financial planners, HLB Mann Judd Sydney, since 1975. He specialises in business services, and in particular, in advising family-owned organisations. His experience covers areas such as strategic and business planning, facilitation and implementation of continuous improvement, management and administration systems, and cost control and budgeting. Mattiske is a fellow of the Institute of Chartered Accountants and a member of the Institute of Management Consultants.
