Australian employers urged to fix HR foundations before scaling

Australian businesses rushing to grow without first shoring up their HR fundamentals are exposing themselves to serious legal, financial and cultural risk, according to Peninsula Australia associate director of consultancy Stephen Roebuck.

Speaking to HRD, Roebuck said too many organisations still treat HR as a “nice to have” rather than the essential infrastructure that allows safe, sustainable growth.

“Before a business can scale safely and sustainably, it must establish strong HR foundations that work towards compliance with workplace laws, reduce people‑related risks, and create clarity for both employers and employees,” he said.

Three HR pillars every growing business needs

Roebuck listed three non‑negotiable elements that must be in place before leaders push for further expansion:

1. Robust payroll and compliance systems

With Australia’s complex industrial relations framework, Roebuck argues that accurate, compliant payroll is the first line of defence.

“Businesses must have reliable processes to pay staff correctly,” he said. That means identifying the correct industrial instruments – such as modern awards or enterprise agreements – understanding classification levels and entitlements, and maintaining accurate time and attendance records for seven years as required by the Fair Work Regulations 2009.

Failing to do so not only creates underpayment risk but can undermine trust quickly as a business scales.

2. A comprehensive policy framework

As headcount grows, informal norms and ad hoc decisions rapidly become a liability.

“Scaling requires clear HR policies that set behavioural and performance expectations, reduce the risk of issues arising, and outline procedures for managing workplace problems,” Roebuck said.

He nominates core policies covering WHS obligations, anti‑bullying and harassment, grievance handling, leave and flexibility, performance management, codes of conduct, and IT/social media use.

“These frameworks provide consistency and help manage risk as the workforce grows,” he added.

3. Lawful, contemporary employment contracts

Roebuck also stresses that every employee should have a written contract that aligns with the Fair Work Act 2009 (Cth) and any applicable award or agreement.

“Contracts must be clear, reasonable, and enforceable to minimise disputes, prevent underpayment risks, and ensure employers are appropriately protected,” he said.

For HR leaders, that means regular contract reviews to ensure templates keep pace with legislative change and business evolution.

Restructures: where HR can make or break the business

With many organisations still navigating cost pressures and restructuring, Roebuck says HR’s role in these moments is pivotal.

“Managing HR during a restructure or cost reduction exercise requires a structured, legally sound, and people‑centred approach,” he said. “The way an organisation handles these moments has significant legal, financial, cultural, and reputational implications.”

He outlines three key pillars for HR to lead:

• Legal compliance: Understand obligations under the Fair Work Act 2009 (Cth) and any applicable award or agreement, including redundancy pay, notice, leave liabilities, consultation requirements and any specific redundancy rules.

• Clear, defensible process: Document the business rationale, consult genuinely with affected staff, consider redeployment options, and ensure entitlements are calculated and paid correctly.

• Human impact: Communicate openly and respectfully, support affected employees, and maintain trust and morale among the remaining workforce.

“This combination of legal understanding, structured process, and people‑centred communication is essential for a well‑managed restructure,” Roebuck said.

Same laws, different realities: how size and sector shape HR focus

While large corporates are typically seen as the most exposed to HR risk, Roebuck cautions that smaller employers are operating under largely the same legislative burden.

“In Australia, for the most part smaller businesses face the same complex employment laws as large organisations, so compliance remains the core HR priority at every size,” he said.

However, as organisations grow, the HR lens shifts.

“As businesses grow, HR focus naturally shifts from simply meeting legal obligations to driving efficiency and productivity through more formal structures, such as performance frameworks, attendance management, and clearer role expectations,” Roebuck explained.

Industry context further shapes HR priorities. For example, the building and construction industry often manages itinerant workers, such as daily hire, casuals and contractors.

This means employers must understand portable entitlement schemes and the heightened risks of a mobile workforce.

For hospitality and retail there is often a high number of junior workers. Businesses must ensure compliance with child employment legislation and put in place safeguards to support younger, more vulnerable employees.

“Ultimately, HR must balance compliance with the realities of the industry and the sophistication of the business as it grows,” Roebuck said. “But big or small, a business can’t afford to ignore the many HR challenges it may face.”

The 12–24 month HR roadmap: from compliance to optimisation

Looking ahead, Roebuck believes HR leaders should be anchoring their next 12–24 months around a structured roadmap that moves from 

“A strong HR roadmap for the next 12–24 months should begin with a clear focus on compliance,” he said.

“Employers need to understand where they stand today, identify gaps, and assess risks because Australia’s workplace relations landscape is highly complex, and even major employers like Coles and Woolworths have faced significant underpayment issues. Getting the fundamentals right is the non‑negotiable starting point.”

From there, he advocates a staged approach:

• Phase 1 – Close compliance gaps: Address award interpretation issues, tighten payroll and timekeeping, update contracts, policies and procedures, and ensure managers understand their obligations.

• Phase 2 – Build enabling infrastructure: Introduce better digital HR systems, clarify performance expectations, and strengthen policies and processes that support operational consistency as the business grows.

• Phase 3 – Optimise and elevate: Once compliance is stabilised, shift focus to engagement, capability building, and productivity – using HR mechanisms such as performance frameworks, workforce planning and analytics to drive better business outcomes.

“This is where support partners like Peninsula help businesses move from reactive compliance to proactive, strategic workforce management,” Roebuck said.

What this means for HR leaders

For HR leaders, Roebuck’s message is clear: the mandate is no longer just to “keep the business out of trouble”, but to design the people infrastructure that makes sustainable growth possible.

That starts with uncompromising compliance, but it doesn’t end there.

By investing now in robust systems, clear policies, lawful contracts and thoughtful change management, HR can not only protect the organisation from risk, but also position it to thrive in an increasingly regulated and competitive labour market.