Good workers don't blame tools, so don't blame software for wage theft

Highlighting a critical issue on The Australian Financial Review, I delve into the unjust practice of attributing wage theft to software failures. This analysis urges businesses to confront the real problems within their systems and governance, rather than deflecting blame onto tools. 

As some of Australia’s largest employers reel from the underpayment scandal that has run riot in recent weeks, some have been quick to blame the software they decided to purchase.

The adage of "a good craftsman never blames his tools" comes to mind here. Businesses shouldn’t blame the software they’re using if they’ve failed to get their own processes in place or if they haven’t configured them to manage their varying enterprise agreements. The level of inefficiency in many businesses can be truly shocking.

The underpayment scandal has seen some companies rush to blame their software for failure to pay staff properly, but leaders' ignorance of the rules is more likely.

Most healthcare organisations are still operating with paper timesheets, still have nursing unit managers interpret payment rules outside the system and provide little education on how people should be paid, and that’s just one industry.

I’ve worked directly with businesses across Australia on these systems, including in the retail and hospitality industries most under fire, and the response to the question of ‘can you show me these enterprise agreements and tell me how to interpret them?’ is too often met with a blank stare.

How can we expect software to solve these problems when business, HR, operations and workforce management leaders don’t know the information to begin with?

Everyone loses

With the revelation by the Australian Payroll Association that workers have been overpaid in almost 70 per cent of businesses assessed, some might believe there’s a cosmic justice taking place here.

With every underpayment, there’s an overpayment so it all balances out. The lucky ones getting more than they realised in most cases certainly aren’t losing out, while underpayment victims are getting it all back, so it all works out alright in the end, right?

Wrong. Businesses have lost out big-time here – they’ve lost trust and respect along with untold amounts of money in reparation, legal fees and various payroll-related activities. The failure to more appropriately invest in software systems to manage payment will now be balanced with ‘catch-up’ investment to mitigate the risk of anything like this happening again.

Shareholders lose too – their investments have ultimately been based on the wrong numbers and now they’re tied up in companies reeling from this payment fallout (most major companies revealed in recent weeks have taken a hit to their stock price).

And let’s not forget the employees – compensation may be on the table now, but what processes and delays will be involved in getting it? How many spent recent years struggling to get by while unknowingly being paid less than they deserved? And what will the long-term impact be when these companies have readjusted?

It would come as little surprise if the readjustment costs coupled with the new-look payment amounts could lead to job losses. And history tells us those losses will almost certainly be felt by the coal face rather than the top end of the organisation.

Innovate or retreat

The ongoing scandal has prompted call for a return to a Bundy Clock-style timekeeping system, which threatens to hamper already slow progress to increase productivity and effectiveness.

This direct approach may be needed for some organisations where there are large operational workforces and a need for start/stop time accuracy. But the more difficult and rewarding path will be to make sense of and draw value from the technology being blamed for these issues, along with understanding how we work today in a digital economy.

If the software isn’t working, it means you haven’t got the governance around your award rules, the data is incorrect, it hasn’t been customised correctly to suit your specific business, or staff have not been appropriately skilled. Business leaders need to educate themselves on their entire workforce and what they do and leverage the right data to make informed decisions using technology as an enabler.

Priority No. 1 for Australian businesses must be to fix the payment issues at hand and put the right systems in place to ensure nothing like this happens again. Now that this issue is under the microscope, it’s unlikely to go unnoticed for so long and likely to invite further discipline if it happens again. Already there have been calls for criminalising wage theft along with the usual pleas for a Royal Commission.

Businesses need to approach payment from a people, process and technology perspective (in that order). What are the business goals and measures of success? What will work for your people? What processes are in place that the technology needs to integrate with?

Blaming tech and retreating to old systems is an admission we’re not ready to provide the right digital experience for the modern workforce, and a guaranteed route to hampering productivity and effectiveness, while losing our global competitiveness in attracting or keeping that workforce on Australian shores.

Originally published by The Australian Financial Review
Jarrod McGrath, March 02, 2020