Small employers develop recruitment, staff retention strategies

NO doubt many positive outcomes will emerge from the pain of global economic downturn, but one that’s immediately obvious is the opportunity it has provided smaller employers to implement efficiency measures, redevelop management structures and refocus on training and upskilling staff.

That was the central theme to come out of a recent WA Business News roundtable of former Rising Stars winners from a range of sectors, including corporate travel, superannuation, finance, IT, mining completions services, and electrical contracting.

In the past year, as major projects stalled and pay packets in the oil and gas, and resources sectors fell, Western Australia’s smaller employers became creative in driving down costs by using the crisis to upskill existing staff in a move to get a head-start on the inevitable economic upswing.

Unlike in previous downturns, companies were not reducing their workforce at the high rate some analysts predicted. Instead, they implemented a raft of strategies to drive down costs but retain employees, such as salary freezes, pay rise deferrals, natural attrition, and reduced work hours.

But the downturn forced smaller players to work harder in winning contracts, improve communication with clients and undertake more scrutinised due diligence, which in turn shifted their focus back to keeping the right staff.

In his address to the Economic and Social Outlook conference dinner in Melbourne on November 5, Reserve Bank of Australia governor Glenn Stevens noted these trends.

“Businesses took a far-sighted view about employment decisions,” he said, discussing lessons learned from the crisis.

“Given the preceding difficulties in securing labour, they found ways of keeping people on payrolls, even if on reduced hours.

“They clearly had not only the good sense, but also the requisite degree of institutional flexibility to do that, which must say something about the progress that has been made in labour market arrangements over the past couple of decades.”

Osborne Park-based Powertech is one such company to have a far-sighted view about employment.

Specialising in completions services throughout the resources sector, Powertech delivers inspection, test and commissioning services to many of the big players in the mining, and oil and gas industries.

When major projects that were near completion stalled when the global financial crisis erupted globally in October 2008, Powertech felt the brunt more than many.

But instead of sacking workers, the company went on a recruitment drive.

“The GFC was a bit frustrating for us in that the major projects stalled,” Powertech business director Jonathan Stow said.

“But in saying that, the fact that we had so many major projects out there in the oil and gas and the mining industry that were almost through to fruition and then stalled ... was extremely optimistic for us.

“What we did was a little unique. Obviously a lot of companies were laying people off but we rebuilt, we became top-heavy and we rebuilt our management in the downturn.

“Basically, we restructured so we were ready for the boom again.

“We recruited and set up our whole management structure in the downturn and it also gave us time to pause and reflect on our business and set up the systems and the processes.

“We’ve managed to acquire people who we want and then decide what we’re actually going to do with these people. We wouldn’t have been able to do that a year or so ago when everything was so busy.”

Mr Stow said Powertech also used the time to diversify its business into more commissioning work.

Core business

Bayswater-based electrical contractor Cablelogic was also forced to reassess its core business during the downturn but it too refrained from reducing its workforce.

Led by director Brett Easton, the company further broadened its expertise to offer communication and technology solutions nationwide.

Cablelogic’s products and services include electrical, data networking, telecommunications, fibre optic, satellite and, most recently, renewable energy.

“The last 12 months has been pretty tough on us, we had a lot of our projects finishing off,” Mr Easton told the WA Business News forum.

“We kind of slipped away from our core business as the margins got smaller, but we didn’t lose anybody.

“What the downturn has done is given us time to look at our core business, our people and the systems in place, and we just trimmed a lot of the fat.

“During the boom I think people just throw money at stuff to do just so they can sort it out and get it done.

“But when the work dies off, people are a little more careful and are more diligent in the type of work they take on, who they deal with, and to do that you need to have the right guys working for you.”

Cablelogic also started offering courses such as welding to upskill employees, but also offered to pay for non-work courses to boost morale.

This was coupled with other fringe benefits, such as providing fruit on job sites and a cappuccino machine.

West Leederville-based IT service provider Datacom Systems continued to recruit in the past year, doubling its workforce and employing its 50th employee on the firm’s second anniversary.

The firm is part of the global Datacom group, which currently employs more than 3,000 staff across Australia, New Zealand and South-East Asia.

Datacom WA managing director Basil Lenzo said when the project pipeline died off, the company worked closely with its staff to ensure they understood their position within the organisation and trained them to have the capacity to work in other roles.

He said the company then used the downturn to better understand its clients and facilitate strategies for its growing workforce to value-add.

“What happened was we just needed to get a lot closer to our clients, get across their business,” Mr Lenzo said.

“What came with the global financial crisis was a lot more due diligence, a lot more thought process around the business case, and that required upskilling our staff up and working a lot harder to get closer to our clients.”

Mr Lenzo said Datacom recognised that, to be prepared when the economy began to recover, it had to take advantage of the downtime to build its internal systems, focus on customer service, and develop its workplace culture.

“We had to be a bit more creative around the values and the culture and everything else you could add around a position,” he said.

Closer to staff

Westcoast Group Corporate Superannuation managing director Allan Rickerby said with Perth’s isolation from other capital cities, it was important during the downturn for smaller employers to train workers to develop a core focus with the right clients.

“I think we’re in a fantastic sweet spot in the world. The global recession has made us focus a bit more time on our systems and processes, to make sure we’re doing things right going forward,” Mr Rickerby told the roundtable.

“But we didn’t stop growing; there are always opportunities, I just think that you need to be light on your feet.”

Mr Rickerby said Westcoast used the economic slowdown “to get closer to staff”, while still issuing pay increases in a move to retain workers and be prepared for the recovery.

“But also what we began to do is make more demands on their outputs,” he said.

Mr Rickerby said the company spent “a lot of money” on social research and human resources to develop a team with strong values.

“I think having the right information to know your clients and your staff, and whether you’re making money, is a very important thing,” he said.

“But it’s about community, not about money.”

At Nedlands-based Globetrotter Corporate Travel, founding managing director John Battley said he was focused on creating a community workplace culture.

With plans to grow the 30-year-old travel company Australia-wide within 10 years, and triple turnover in five years, Mr Battley has invested heavily in his 50 staff, which includes a number of fringe benefits, such as providing fruit, a cappuccino machine, and a masseuse.

“The travel industry has been through a heck of a lot of traumas over the years – 1987 the stockmarket crash; 1989 was the pilot strikes; 1991 was the first Iraq war when everybody cancelled their flights because they thought they were going to crash; then there was Sars; swine flu; the Ansett collapse and September 11, it’s all happened,” he said.

“But that’s why we’re in this industry; we love that sort of stuff. We’re sort of the cage fighters of business.

“It was interesting this time with the downturn. I had never seen anything like it in 30 years, we were booming along and overnight business dropped off 35 per cent when Rio Tinto and BHP Billiton announced postponement of projects last year.”

Despite the outside market forces, Mr Battley remains focused on staff, regularly hosting social events to build morale.

The business continues to invest in training with an emphasis on delivering strong customer service while also developing long-term relationships between staff and clients.

West Perth-based Australian Finance Group managing director Brett McKeon noted that the global financial crisis bred a culture of efficiency among many of WA’s smaller employers, with most also implementing creative strategies to reduce costs but keep workers.

“The lesson from the last boom was, if you have good quality people you don’t let people go,” Mr McKeon told WA Business News forum.