Lately, just about everything has become more expensive as inflation, interest rates, and a rising cost of living impact financial wellbeing. Business costs are no exception, and many leaders are being hit hard due to workplace regulation changes.
While the addition of policy to protect workers is undoubtedly a good thing, that doesn’t mean costs aren’t expected to increase. According to Bartier Perry partner James Mattson, this is due to added pressure being placed on HR departments.
“New rules to proactively eliminate sexual harassment and prevent psychosocial harm at work will put significant pressure on human resources teams,” Mr Mattson said.
“You cannot underestimate the task Parliament and regulators have put on HR and work health and safety (WHS) professionals with changes they’re demanding happen today – not tomorrow.”
Due to these changes, leaders must prepare for increased costs. While many may be preparing to cut costs as we enter 2024, Mr Mattson believes this may not be possible as compliance costs rears its head.
“Exactly how much is hard to say, but what is clear is that most CEOs and CFOs in Australia planning to hold or reduce HR spend in the next few years will need to seriously reconsider,” he explained.
“HR departments are already stretched … At its simplest, workplaces have traditionally reacted to issues such as sexual harassment, bullying or stress in the workplace when it arises. Now, Parliament and the regulators want to see a systematic and proactive approach from businesses to eliminate or prevent those matters arising. That means a simple policy and basic training [are] no longer enough. Investigating and terminating offenders is no longer enough.”
What will help businesses through this difficult period is adequate allocation of resources. Rather than expecting HR departments to “deal with it”, employers must assist their teams through these changes.
Mr Mattson continued: “To protect the safety of HR and WHS teams who need to do the heavy lifting, business needs to ensure they are well resourced.”
“Bosses or managers who ignore the positive duty may find their inaction is faced with real and direct consequences, such as providing a reason to now withhold a bonus or promotion.”
“The new rules make it clear it will be in organisational leadership’s interests to work with and support their HR and WHS teams to make sure there is proactive compliance with adequate resourcing and expenditure in this space.”
Despite the pressure that may come from regulation changes, it’s important to note that the benefits will help create safer workplaces.
“These are well-intentioned and important changes to improve the workplace. We must do better. But they are also a significant compliance cost for many business owners, let alone for SMEs. It would be a mistake to assume that only big business will be targeted for non-compliance,” Mr Mattson concluded.