As hybrid work becomes more ingrained, HR needs to think outside the box when it comes to risk management.

When you think of organisational risk in 2023, you probably immediately jump to the industrial relations (IR) changes that have been brought about by the Secure Jobs, Better Pay Bill, such as new obligations around flexible work, the use of fixed-term contracts, the elimination of pay secrecy clauses and new protected attributes added to discrimination legislation.

While these IR risks are certainly taking centre stage, and will be crucial to monitor and respond to in the coming months, it’s important that HR is also assessing bigger picture risks that have emerged in recent years, namely due to new ways of working coupled with emerging technologies.

For example, since the introduction of the metaverse, there have been rumblings about how it could transform hybrid work, allowing greater connectivity through virtual meetings and socialisation. However, the semi-anonymity and simulated physical proximity it affords could also lead to increased bullying and harassment. Reports of inappropriate behaviour like this are already surfacing. 

HR will need to consider how to regulate this new environment, and would be wise to start partnering with IT to monitor for certain red flags to ensure a safe and productive virtual environment.

Here are four other potential risk factors that have emerged in recent years that should stay on HR’s agenda in 2023.

1. Flexible-work risks

As HRM has previously reported, loneliness levels have peaked with the introduction of hybrid working arrangements. 

Medibank’s Karen Oldaker, Senior Executive, Wellbeing and Community told HRM that the health insurer’s research found that since October 2021, more than half of the 1200-plus people surveyed felt lonely at least one or more days per week.

“We know there is a very low understanding around what loneliness is, how to identify it in yourself and how to identify it in others,” Oldaker said at the time. ““It’s all about starting a conversation,” says Oldaker. “Destigmatising loneliness is really critical right now.”

Adelaide-headquartered finance organisation Credit Union SA has 150 employees who have returned to flexible office-based work. However, some continue to work remotely, which poses communication, productivity and wellbeing risks.

It can be tricky to gauge if remote employees are struggling. But when it comes to duty of care, employers must consider when it’s reasonable to step in, says Liana Reinhardt FCPHR, Chief People and Strategy Officer at Credit Union SA.

Credit Union SA recently experienced this when one of its employees went fully remote due to significant health and personal concerns. The decision to intervene and contact the staff member was made when a leader reported they weren’t acting themselves.

“We did a home occupational therapy assessment, picked up on some non-work-related factors impacting the employee, and determined what support and assistance they might need,” says Reinhardt. “We were also able to tap into Job Access to provide some additional ergonomic equipment for their home set-up.

“This year, we will proactively enhance our existing people risk assessments, reviews and audits, which need to be continually revisited and brought to life to adapt to our [new] ways of working.”

“It’s important to embed a culture of compliance in the organisation so key responsibilities don’t sit purely with HR or one nominated ‘compliance officer.’”  – Marcus Zeltzer, co-founder and managing director, Yellow Canary

The people and culture (P&C) team strives to check in on its people and keep online behaviour in check by engaging with leaders around what they’re seeing in informal chat channels, the tone among the group and the sentiment expressed in the one-on-one chats, says Steve Newman, Senior Manager P&C at Credit Union SA. 

“Taking pulse checks at formal and informal opportunities, including training data and feedback, staff surveys and discussions with teams, helps us read the room and identify potential symbols of conduct issues,” he says. 

 2. Payroll risks and criminalisation of wage theft

Marcus Zeltzer, co-founder and Managing Director of payroll compliance automation solution Yellow Canary, says there are key payroll risks HR should consider, including paying employees ‘all in’ rates rather than award rates. 

“The buffer an employer considers having offset for employees’ entitlements under an award can be easily consumed by a change in legislation, like the [2022] update to minimum award rates,” he says. “This can mean employees may no longer be better off under an all-in rate over the award.”

Neglecting classification reviews is also risky. As employees’ job titles and duties regularly evolve, there’s a high chance they could be wrongly classified and underpaid.

Mitigating these payroll risks entails greater integration between HR, workforce planning, legal and payroll, says Zeltzer.

“It’s important to embed a culture of compliance in the organisation so key responsibilities don’t sit purely with HR or one nominated ‘compliance officer.’”

It has never been more important to “get your house in order”, since the federal government has committed to criminalising wage theft on a national level, he adds. Although, the timing of this is currently unknown.

Exercising due diligence is a crucial risk mitigation strategy employers should pursue, with the expectation that a national wage theft Act will follow Victoria’s legislation, which recently allowed for Australia’s first criminal prosecution of wage theft.

This means that in addition to hefty wage remediation bills, significant penalties and reputational damage, employers who don’t comply could face criminal sanctions.

Individuals in those businesses, including at board and senior management levels, potentially expose themselves to personal penalties and jail terms of up to ten years.

“If employers can show they’ve exercised adequate due diligence in paying wages and entitlements, however, any inadvertent underpayment will not be considered wage theft,” says Zeltzer.

 “Compliance needs to be constant and proactive, as opposed to yearly retrospective remediations, which can be reactive and hugely resource intensive.”

3. Maintaining productivity levels

Many organisations think employee productivity has improved with the move to a hybrid work model. A 2022 report from Omdia found that 54 per cent of organisations believe this to be the case. However, the same report found that only 22 per cent of organisations have the data to support this.

While employee tracking software could prove useful to stave off productivity concerns, organisations should be well-versed in the legalities around monitoring staff in their jurisdiction.

In NSW, for example, the Workplace Surveillance Act considers overt surveillance unlawful if employees aren’t notified 14 days beforehand. Employers also need to consider how monitoring employees will impact trust and job satisfaction.

Watch HRM’s video series: ‘Is employee tracking software ethical?’

4. Underpaying superannuation

There are many penalties, including personal liabilities for directors, that apply if employees are not paid enough superannuation. 

This also extends to late payments, says Zeltzer, as the Australian Taxation Office doesn’t distinguish between late payments and an underpayment of superannuation.

“The directors of your business are personally liable for unpaid super going back to 1993,” he adds.

To maintain compliance across this area, he recommends ensuring pay codes are mapped and labelled correctly, and that your payroll teams understand when to apply the right one.

“Superannuation entitlements can vary for each employee depending on their agreement, so it’s important that payroll teams keep their systems up to date,” he says.

While there are many benefits to hybrid work, and the technological innovations such as the metaverse that facilitate that model, HR leaders must start thinking about the associated risks. 

With a national wage theft Act also set to be announced, the price paid for complacency could be punitive. 

Learn some of the benefits and risks of operating a hybrid workforce, and gain best-practice tips to make your culture thrive with this short course from AHRI.

A version of this article first appeared in the February 2023 edition of HRM Magazine.