Best Practices for Hiring and Firing in Australia

Hiring and firing employees can be one of the most challenging aspects of running a business. Poor hiring decisions can cost businesses thousands, while mishandled terminations can lead to legal claims, reputational damage, and employee morale issues. Understanding best practices in recruitment and dismissal ensures compliance with Australian employment laws and protects your business from potential risks.

The Cost of a Bad Hire

A study by the Australian HR Institute (AHRI) found that a bad hire can cost a business up to 2.5 times the employee’s salary, factoring in recruitment costs, lost productivity, and rehiring expenses. Furthermore, 46% of HR professionals report that poor hiring decisions negatively impact team morale and business growth. Source: AHRI

Best Practices for Hiring

1. Define the Role Clearly

A well-defined job description is the foundation of a strong hiring process. It should include:

• Key responsibilities

• Required qualifications

• Soft and technical skills

• Performance expectations and key performance indicators (KPIs)

Clarity in the hiring process ensures that candidates understand their role, reducing turnover and improving job satisfaction.

2. Follow a Structured Recruitment Process

A structured hiring approach helps eliminate bias and ensures you select the right candidate for the job. Best practices include:

• Utilising multiple recruitment channels – Leverage job boards like Seek, Indeed etc, referrals, LinkedIn, and industry networks.

• Using behavioral-based interview questions – These assess problem-solving abilities, communication skills, and adaptability.

• Implementing skills testing – Validate experience and ensure the candidate possesses the necessary competencies.

• Conducting thorough reference checks – Speak with previous employers to confirm work ethic, reliability, and skills.

3. Comply with Anti-Discrimination Laws

Under the Fair Work Act 2009 and the Australian Human Rights Commission Act 1986, hiring decisions cannot be based on race, gender, age, disability, or other protected attributes. Employers must ensure that their recruitment processes adhere to anti-discrimination laws to avoid legal risks. Source: Fair Work Ombudsman

Best Practices for Letting Staff Go

1. Ensure Performance Management Procedures Are in Place

Managing employee performance properly reduces the likelihood of termination disputes. Best practices include:

• Regular performance reviews – Document strengths, areas of improvement, and concerns.

• Providing clear feedback – Employees should understand expectations and have an opportunity to improve.

• Implementing Performance Improvement Plans (PIPs) – Before considering termination, set measurable goals with a structured improvement plan.

2. Follow Correct Dismissal Procedures

Failure to follow proper procedures can result in unfair dismissal claims. The Fair Work Commission outlines steps for lawful termination, including:

• Providing a valid reason

• Giving the employee an opportunity to respond

• Offering procedural fairness by allowing them to improve or rectify the issue

3. Document Everything

Maintaining detailed records of performance reviews, warnings, and disciplinary meetings protects businesses in case of disputes. Keep:

• Written warnings

• Email communications regarding performance issues

• Meeting notes from discussions with the employee

Conclusion

Hiring and firing the right way protects your business legally and financially while fostering a strong workplace culture. If you need expert HR guidance on recruitment or termination, reach out to us at Be Still Consulting.