What the Fonterra fallout means for HR

As the dairy giant struggles to get on top of the continuing contamination scandal, what impact will this have on employees and how can HR help?

What the Fonterra fallout means for HR

When one of the country’s largest exports is hit by a scandal the magnitude of what dairy giant Fonterra is experiencing, what can HR do?

News of contamination in a key ingredient in some of Fonterra’s baby formula shook not only the reputation of the company, but also the 100% pure image New Zealand strives to uphold.

In a situation such as this, HR must provide support to employees and managers directly involved, says Antonia Haythornthwaite, principal HR advisor at Blue Dot Human Resources.

She says this is important from a health and wellbeing perspective as well as an employment relations perspective.

“As internal and external investigations get underway, it's important to recognise individuals (and their families) could be fearful and stressed about the potential impact on their employment,” she said.

Haythornthwaite says consideration should also be given to the possible impact on engagement levels of employees indirectly involved.

“They will be watching closely to see how their colleagues are treated as it could be indicative of how they would be treated in a similar situation.”

Workplace culture should also come under scrutiny. “Was the behaviour and actions of the company, its leaders, its managers and its employees during and after the 'incident' in alignment with the values?”

Rachel Walker, national president of HRINZ (the Human Resources Institute of New Zealand) says communication with staff during a time like this is critical to long term commitment.

“For many people, this will be seen as a test of leadership and how people are treated during this time will be remembered for a long time to come … events like this can have long-term consequences on all forms of a company's reputation, including employment branding. ”

Ms Walker adds HR may also have a practical role to play, ensuring staff don’t burn out.

“We are already hearing Fonterra say they are working around the clock on the issue, but tired people don't always make the best decisions.”

New Zealand Prime Minister John Key, reportedly earlier accused the company of a "staggering" delay in revealing the contamination and yesterday revealed he will travel to China to limit the damage if he needs to.

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