Cost, Productivity & Survival: What Employers Must Understand Right Now

“Ignorance is not a defence. Intention won’t protect you.” – Tim Dive

Small businesses are busy businesses.

There’s no polite way to say this: the current industrial relations environment in Australia is not built for small and medium-sized businesses. If you’re a business owner, manager, or HR lead, you’ve likely felt the squeeze already.

The challenges aren’t on their way, they’re here. And while many headlines point to wage increases or legislative reforms as the headline acts, the real issues go deeper.

What we’re facing is a structural shift in the employer landscape: higher cost, lower productivity, and increasing legal exposure for those just trying to do the right thing.

This blog unpacks the themes from Episode 075 of The HR Cartel Podcast;

1. Wage Increases Are Coming—But That’s Not the Core Problem

Every year, wage reviews happen. But what’s changing now is the context around them.

The Fair Work Commission will hand down a national wage increase ruling again in June. With pressure from the union movement to make these increases exceed CPI, employers, especially in service-based industries, are finding themselves in a cycle:

• Wages go up

• Prices follow

• Unions demand more

And so the spiral continues. Many small businesses that previously operated with wages at 30% of turnover are now seeing this climb past 45% even 55% without any matching productivity gains.

For businesses with slim margins, this isn’t just uncomfortable. It’s existential.

2. The Legal Risk Is Rising, Fast

We’re now in the enforcement era of wage theft legislation. This is no longer hypothetical. It’s active law.

Missed payroll? That’s a breach.

Unpaid or mismanaged penalty rates? That’s a breach.

Incorrect use of time off in lieu, RDOs, or individual flexibility arrangements? You’re potentially exposed.

And the stakes are high:

• Up to $8 million in fines for businesses

• Up to $1.5 million or 10 years in jail for individuals

Ignorance isn’t a defence. And intention isn’t enough to save you. If your systems, documentation, or processes can’t back up what you say you’ve done, you may find yourself in the headlines for all the wrong reasons.

We’ve already seen franchisors fined $1.4 million for not overseeing their franchisees’ compliance. If you think being one step removed protects you, think again.

3. What Productivity Really Looks Like—And Why Most HR Advice Falls Short

Productivity has become a buzzword, but too few people are actually talking about what that means for a real business.

Let’s be clear: handing your managers a performance form and calling it a process doesn’t cut it.

Most small businesses aren’t ready for formalised performance frameworks, and that’s okay. But they still need structure.

The first step is understanding who in your team is pulling their weight. A simple pulse check can do wonders:

• List your staff

• Rate each on reliability, contribution, attitude

• Identify your bottom 10%

This is not about being harsh, it’s about being clear. The quickest path to productivity is lifting (or exiting) that bottom 10%, so your top performers aren’t slowed down or burnt out by dead weight.

Also: stop keeping toxic high performers and underperforming sweethearts just because they’re liked. Both erode team standards.

4. Leadership Style IS Performance Management

If you’re running a business with a lean team, your ability to lead directly shapes productivity. That means you don’t need corporate training modules, you need honest conversations and tools that support your frontline leaders to:

• Reward good performance without defaulting to cash

• Give timely, constructive feedback

• Set expectations and hold people accountable

When we work with clients on this, we don’t hand over forms, we train leaders to have better instincts, stronger boundaries, and smarter reward systems.

This is how you build a productive culture, without adding another full-time salary to manage it.

5. What Now? Take Action While You Still Can

This is not alarmism. It’s the new normal. Your next best move is to:

1. Audit your contracts and payroll processes.

2. Check your award compliance and recordkeeping.

3. Train your leaders to spot risk and manage performance.

And if you don’t have time to do it all? That’s where we come in.

At The HR Cartel, we support business owners and HR teams who want to do the right thing, but need help staying on top of it all. Our portal gives members access to compliance templates, monthly webinars, and expert HR support tailored for SMEs.

If you haven’t listened to Episode 075 yet, now’s the time. Because the next wave of legislative enforcement is already rolling, and being proactive is the only way to protect your business.

Need support, fast? Call us on 07 5651 0066 or visit www.hrcartel.com/contact