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HR Zone talks to: Don Rhodes about HR life down under

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Red-tape and its burden is a problem shared with our friends in New Zealand; Don Rhodes reveals the ups and downs of life in HR in his country.



HR Zone Q1: What is your current job title and how long have you been working within the HR field?
Don Rhodes: Currently I am a Consultant Advocate, working principally for the Otago Southland Employers’ Association on contract. Prior to this I was employed by the Association for 14 years as an Advocate working mainly advising employers on legislative employment matters, assisting with employment issues which included appearing in various legislated employment related forums and management training.

In various guises, I have been working in the HR field for 22 years.

HR Zone Q2: How is the HR function perceived in New Zealand?
Don Rhodes: The difficulty for HR in New Zealand is to find a place at the top table. As a result most of the strategic decisions are formulated and often agreed before HR gets involved, even where the senior HR person is deemed a member of the senior management group. They are perceived as being part of implementation rather than part of decision making.

In addition, HR is perceived by many in New Zealand, myself included, as the people who deal with matters that others, mostly managers, cannot or do not want to deal with. I cannot speak for the rest of New Zealand outside Employer organisations, other than to say that in discussion with my colleagues from the other Employers’ Associations, they hold a similar view. Too often this comes about because HR believes they can add value to their role by taking on this work. It’s a bit like bureaucrats in local and national government who spend time enlarging their departments to secure their future.

The other problem we perceive is that many HR practitioners have not been well recruited, and as a result there are a number in the field loaded with qualifications but very little knowledge of actually working. The end result is employment relationship advisers motivated by process and ‘industry-speak’ but lacking in an appreciation of what it is like to be at the coalface doing the job day in and day out. For this I do not blame HR, either the profession or the professionals. In the main I blame their employers and the state services commission who are the HR advisers to government in New Zealand.

HR Zone Q3: Where does legislation come from?
Don Rhodes: Most legislation comes from parliament, with a little from local authorities covering how and when businesses can operate. As a result much of our employment legislation is heavily flavoured by the party in power at the time, leading to employment matters being very politically influenced. In recent times this has been quite pronounced, and unfortunately resulted in poorly constructed Acts and regulations.

This does nothing for the employer and employee, but heaps for the bank balances of lawyers and other employment advisers. No group can be absolved of their responsibility here, including employer organisations and unions who in my view have not done enough to make sure the legislation is workable. Pursuit of a particular principle or principles has taken precedent.

HR Zone Q4: Is the red-tape burden comparable to that of the UK?
Don Rhodes: I know very little of the red-tape burden in the UK associated with employment but if it is even half what we have in New Zealand, then you have our deepest sympathy. Apart from the contribution to poorly worded legislation I have mentioned in question three, the greatest issue by far in the HR field here is where bureaucrats interpret the law by putting in place process after process after process, in many cases simply to check that one process is checking the other. Recent changes to our holiday legislation had to be amended three times within 12 months because the original provisions simply did not work, or resulted in outcomes not intended.

If you detect a note of cynicism blended with utterings of criticism against people who again have no idea of what happens in workplaces, then I have succeeded in giving at least some indication of the frustration brought about by red tape, faced by employers in my country. Especially for smaller employers, this bureaucratic insistence, often meaningless or at least dubious compliance, is one of the main reasons many are seriously contemplating selling up.

HR Zone Q5: Is there a rife compensation culture in New Zealand?
Don Rhodes: The compensation culture in New Zealand is alive and well, believe me. Successive governments have promised much, but it seems in most cases they have been overwhelmed by the bureaucrats when attempting to pull back in this area. Unfortunately our unions seem to believe that by promoting compensation for those supposedly not so well off, benefits will flow through to all their members.

What is happening of course is that their members are contributing significantly to providing that compensation and with a degree of dissatisfaction as to where their taxes are being applied. There is now a widespread view here that people are paid far too much not to work, helping in many respects to allow us to tell the rest of the world how low our unemployment rate is. The loopholes available to people who can claim they are unable to work, are numerous. While unemployment figures are down, those on sickness and invalid benefits, as well as student loans [now interest free here] does somewhat distort our statistics.

The State Services Commission tends to lead the field in employment compensation provisions they negotiate for public servants. So not only are we burdened by legislation and process upon process, but also the cost of maintaining the bureaucracy.

HR Zone Q6: Is it easy to sack people?
Don Rhodes: Contrary to much comment, it is relatively easy to sack people here so long as they have been managed properly in the first place, and so long as the processes are adhered to. I am of the view that too many people are in the wrong jobs, leading to the better employees having to put up with underperforming workmates. Trying to get the message across to managers that if they do not handle poor performance early and correctly then they are essentially punishing their better performers, is almost a crusade for me. The key is having detailed performance standards and then implementing those standards consistently. It’s a bit like parents and children, hey?

HR Zone Q7: What’s the average salary of an HR professional in New Zealand?
Don Rhodes: In the last annual wage and salary survey conducted by the Employer Associations, the range ran from $63,000 to $107,000, including add-ons such as car and health insurance etc. The main reason is the size of our companies. The largest employers in New Zealand have about 6000 employees, and probably only 30 in this bracket.

The public service of course is collectively the largest employer, although individually the health and welfare sectors would be the largest, followed closely by education.

HR Zone Q8: Which HR practices and management ideas are currently popular in New Zealand?
Don Rhodes: Health and Safety and related topics such as bullying in the workplace, work/life balance and stress management. Because of government interest, improving productivity is also an area of increased activity although at this stage nothing much is being achieved in actually improving productivity other than running courses.

My problem with all these mentioned topics is the idea that if you take them out and deal with them as special issues it will cure all our ills. I have always believed if you train managers to manage properly across all their tasks, and require them to perform, they will deal with all these matters … and more importantly, employees will then see such things as an integral part of their daily work.

Instead we promote the thinking that the focus this month is safety; then we look at stress in March and maybe if we are lucky they will consider work/life balances in April. Well hello! When I first became involved in HR the big thing was motivation.

So we had seminars on motivation. What was missing from these seminars? No doubt your readers could go on for pages about there being no performance standards for the manager as to how they provide the environment for motivation to flourish, let alone the commitment from the Chief Executive to confirm the creation, maintenance and improvement to this environment as part of the corporate plan.

In so many ways nothing changes, which is great for my business but terrible for improving productivity, which should be the non-negotiable goal of all in business.

HR Zone Q9: What in your view are the main differences between HR practices in the UK and those in New Zealand?
Don Rhodes: I am sorry I cannot offer any comment on the differences as I do not know. Given the greater number of large employers and therefore the larger concentration of HR personnel I imagine in the UK, HR would [or should] be involved at a higher level than tends to happen here. It seems from comments/articles on HR Zone that the influence of lawyers in employment is as great as in my country. In many ways this has had a detrimental effect on the employment relationship, mainly I believe because lawyers have little or no training at all in this area.

Their involvement tends to be to win at all costs [after all, why else do we hire them], and also to complicate what should be simple matters. Read any legal dissertation on an employment matter and you will see what I mean. They have no real interest in the relationship[s] in the workplace and their proposed remedies reflect this.

This is not meant to criticise lawyers, but just reflect on the fact that they are not trained to promote employment relationships but to interpret the law. Why has it happened? Well in my country it has come about because of the increased reliance on legislation, mainly by unions, to bring about change. Unfortunately the unions do not have enough personnel capable of interpreting the legislation, so they call in the lawyers.

Employers respond accordingly. And now we have workplace issues resolved not by negotiation and compromise but by legal argument. In the organisation that I contract to, when I first worked for them they had no lawyer in a team of six. Everyone was qualified and or trained in industrial relations and most had a background of [proper] work so they bought that experience to the job. Now we have four lawyers and they spend most of their time arguing legal matters as they attempt to help managers, manage better.

This change in industrial relations is so noticeable that during a recent parliamentary debate on employment, the leader of one of our minor parties noted that in 1990 there were six specialist employment lawyers in New Zealand, compared with over 1200 then. These figures were not disputed at the time, as the MP is a lawyer. I have a real concern for the direction we are taking, but I have no doubt any real change will come principally with a change of thinking from within the union movement when they become less reliant upon legislation and more upon negotiating and compromise.

Part of the reason also in New Zealand is that unions are no longer as skilled at negotiating as they used to be. While there are less strikes than before, other than in the public sector, much of the time spent by employers in mediation and other related forums could be avoided by a union representative sitting down and working out a solution with the employer. I would be interested in feedback from HR Zone’s members to these particular comments as to whether or not this reflects the situation in the UK.

HR Zone Q10: What’s the state of employment in New Zealand?
Don Rhodes: Currently we tout our unemployment rate as the lowest in the world. As at November 2005 it was 3.4%. While that is a satisfactory situation for some, it is not necessarily so for employers. Mainly this is brought about because of an improved economy creating more jobs, but it’s also due to a lack of labour especially quality labour.

The shortage of skills exists in all industries and is having a serious effect in those industries involved in exporting or supporting those in exporting. Being such a small country we are not able to compete with others, so many of our skilled people go overseas for more money, mainly.

The other major reason is the urge to undertake that ‘overseas experience’ … the big OE. In addition, there is little incentive for those receiving compensation to return to work. Although we have begun to address our skilled labour shortage with more attention to training [particularly apprenticeships] this is terribly bogged down with bureaucracy [again] and duplication of providers. Being a nation of small traders, we do not pay enough attention to training on-the-job, which remains the most effective training of all.

The mindset revolves around sending people to training courses on how to do the job, rather than courses to teach them how to do the job better. There is a great difference. But there are moves afoot to improve the training available through management training provided by Employers’ Associations and others, as well as through government agencies, mainly with subsidies. One positive move by government is providing assistance with managing the apprenticeship/training process and improving access to the technical training necessary in apprenticeship training.

HR Zone Q11: Is HR a popular career in New Zealand?
Don Rhodes: Because of the large number of lawyers going through our universities, HR is becoming popular for law graduates particularly. It is not seen as a regular pathway to senior management, but more as an opportunity to move into something else which might then put people on the pathway to senior management.

HR Zone Q12: Where are the hotbeds of commerce in New Zealand?
Don Rhodes: For some time now we have promoted the concept of a knowledge economy. While this provided income for consultants who ran seminars on a topic which was never defined in matters with no specific outcomes, to most business people it meant we should become a nation of computer software entrepreneurs. In a few cases we have been successful in this work, but no more so than in many other countries.

Witness the television graphics provided by a local company enabling viewers to follow yachting and golf much more closely, and others such as point-of-sale systems and stock control processes which still lead the world. Witness also the growth in our film industry with Lord of the Rings and King Kong plus WhaleRider, to mention a few international successes.

But these are not enough to provide secure employment for large numbers of people. The interesting aspect to all this is that the bulk of our overseas earnings still comes from what we grow on the land. Adding further to this interest, is that these industries receive much less attention especially from governments than all the other fashion industries of the moment.

I included in this latter category our tourism industry. Latest discussion in many parts of the country revolve around limiting the numbers of tourists we can properly handle, rather than just aiming for more and more. Quality and not quantity is becoming a catchphrase within the industry.

At this stage our future still seems to be very much in the hands of those who produce off the land. Dairying and meat are the backbone of farming income. That is why we lobby so hard for greater access to overseas markets where import controls and agriculture subsidies hinder our ability to provide quality products at competitive prices. It is acknowledged there are still opportunities in the knowledge economy but I do not see these as the real future for New Zealand.

The film industry appears to have established a sound base from which we can expect growth into the future, but again this will not become a major industry in the next five or even 10 years. There remain great opportunities for growth in quality tourism, and I support this trend away from huge numbers and into activities we can sustain and which provide real value-for-money to the tourists.

As to the impediments to business growth, well one of the major stumbling blocks has already been commented on above. Red-tape occupies so much of employers’ time that many small business people have sold up and gone back to working for someone else. The danger here is that in small countries like ours these are often the entrepreneurial types we need to encourage.

Especially with employment legislation there is a continuing feeling among smaller employers that it is not worth hiring people. The increasing requirement to have processes for almost all parts of the employment cycle give employers the feeling they no longer have control over their staff. If business is slowing down, there is a process. You cannot just talk to the staff and explain what is happening and then decide you might have to lay off someone. If they are not doing the job properly and after some assistance and re-training they still under perform there is another process required.
Increasingly it seems, the employment relationship is controlled by someone outside the business. This third party has not mortgaged their house and borrowed against grandmother’s dowry in order to get the operation running and then sustain it into the future, and therefore the only interest they have is making sure the processes referred to, have been followed.

A further impediment is our shortage of skilled labour, already mentioned. This will require a review of our education system, right through to university activities. Currently everything is based on numbers, not outcomes. So we have unsatisfactory numbers of people entering the workforce who are lacking in basic reading, writing and mathematical skills.

We provide universal tertiary education supported by interest free student loans, but with little or no direction as to the needs of the country. And we need to convince employers, especially small employers, of the great need to train people in the skills required. Most importantly we need to convince these people to train beyond the daily requirements of the job in order to meet the future demands of their industry.

And of course we need government policies that encourage business to begin to sustain themselves and to grow. These polices must not be designed by bureaucrats who wish to control and run the business. What a wish?

HR Zone Q13: Which qualifications do HR practitioners have in New Zealand?
Don Rhodes: Law has already been mentioned. Others in HR have a mix of business related qualifications, while a number have also a mix of other qualifications.

HR Zone Q14: Is there a long-hours culture in New Zealand?
Don Rhodes: Is there what?! An interesting statistic that came from a little assistance on this point from the Chief Executive of the Employers’ Association I contract to is that while our average annual working hours have tended to remain constant at around 1850, in Europe the figure is around 1400. Maybe this is not accurate for the UK?

I still recall with horror the two page article run in one of our major dailies several years ago in which a leading business executive was appointed to head one of the most prestigious universities. In the body of that article was the statement by this person that one of the ways he determined the loyalty [yes loyalty] and dedication to the work of his other managers was to note which cars were still in the car park when he went home. What amazes me is this lemming-like approach to managing at the very senior level, that your success is judged on the number of hours you work.

So much has been said and written over the years about the move to working outside the office; to measuring the value of work done by managers especially to getting the best from managers in a consistent and ongoing basis; yet for some reason there remains this idea that working incredible hours is the key to being successful.

If someone from your readership can solve this vital problem, then I believe much of what many hope for, could be achieved. The task is seemingly insurmountable, given that many of our most successful business people [financially successful certainly] appear to have no life other than work, and no interest in those around them other than as instruments to build upon their success. But the task is not impossible.

We have several very successful business leaders in New Zealand who operate on the sound basis of spelling out to their people what they want and then letting them get on. If they complete their tasks inside the given timeframes then they are expected to help others and are expected to have a life outside work.

The interesting observation here is that these people inevitably promote their organisations because they are enthusiastic about what they do rather than boring everyone by trying to explain how important they are but with the rider that they work incredible hours.

HR Zone Q15: What’s the relationship with unions in New Zealand?
Don Rhodes: The relationship with unions in New Zealand is clearly split into two areas: nationally and locally. Nationally, the unions in conjunction with Business New Zealand which is the umbrella organisation for all Employer Associations in New Zealand is almost always invited by successive governments to join with them in debating and then attempting to formulate employment and business related legislation perceived to be of national importance.

The ILO term is social partners. The same happens with court cases where the Court, especially the Employment and Appeal Courts deem a matter to be of national significance, then again the Combined Trade Unions [CTU] and Business New Zealand are invited to appear.

Because we had legislation in 1991 that limited the influence of unions through abolishing national employment ‘awards’, which was not repealed until 2000 by an incoming Labour government, there remains an adversarial atmosphere around the relationships at the national level.

About 21% of employees in New Zealand belong to unions compared to nearly 50% pre-1991, and of that 21%, 12% are in the private sector and this is despite the determined moves by the recent Labour governments who have enabled legislation deliberately aimed at encouraging collective bargaining. In my country collective bargaining can take place only with unions and employers.

The unions see this as one of the most important opportunities to regain their previous influence. In my view they need to focus more on becoming effective as negotiators and marketers of what unions do, rather than relying on legislation to deliver what they are unable to negotiate with employers. Locally much depends on the personnel. In my part of the country we are reasonably well served by union officials who understand the requirement to be negotiators rather than antagonists, so we enjoy what I believe is a more successful relationship than occurs in the rest of the country.

There are four Employers Associations in New Zealand, two are located in the North Island and two are located in the South Island. The Association represents employers.

2 Responses

  1. Age discrimination
    Reply to Keith Luxton…

    Age discrimination came in with the Human Rights Act in the early 90s. At the time I have to admit to some concern for employers, especially when dealing with older employees. Luckily I was wrong. The impact has been minimal. There could well be a correlation between an ageing workforce and a growing economy where older employees were needed. Regardless, there have been very few instances where employers have had difficulty “persuading” someone it was about time to retire. There were some difficulties to work through in the insurance industry, but apart from interpreting various superannuation schemes, those difficulties were outside of the employment area. We have found that in all the 13 areas of discrimination as they relate to employment, the best advice for employers was to focus totally on employing the best person for the job, regardless, and it works.

  2. Any thoughts on Age Discrimination?
    Thanks for an interesting article.

    Would it be possible to get Don’s views on how age discrimination legislation has worked in both theory and practice in NZ. I understand that it has been in place for a numbers of years now and would appreciate the professions view…

    Keith

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