Organisational redesign: why it is good for the health of your company

Organisational redesign has a bad reputation. Ever since the '80s the phrase has been closely associated with restructuring, bonus cuts and lay-offs, and gives chills to employees and employers alike. It's time to start viewing organisational redesign as a part of a company's fitness routine, rather than a crash diet.

Agility is key to thriving in a volatile and complex global landscape, and it can only be achieved through an organisational structure that can flex at will, with a lean core to which capacity can ­­be added as required. Here are a few points that companies should keep in mind when designing a lean organisational model reliant on flexible resourcing and reasonable cost control:

Part-time work and job sharing

• A possible strategy to tap into a broad talent pool while controlling overall costs is enhancing the percentage of part-time and job-sharing contributors relative to full-time ones.

From a legal perspective: attention should be given to creating a framework for remuneration, leave entitlements and career management opportunities that not only fosters equality amongst the workforce, but allows companies to exercise their discretion as needed. A well-designed contractual framework can save companies a lot of trouble down the line, especially when it comes to the risk of employee litigation on the basis of workplace discrimination, and the potential liability associated with such claims.

Contractors

• External contracting is an all-time favourite when it comes to addressing talent gaps in the short-term. However, it is also one of the murkier areas of law, and is getting increasing attention form the Fair Work Ombudsman.

From a legal perspective: the majority of risks related to engaging external contractors are connected to potential misclassification in status of employees and contractors. This can be mitigated by clearly defining roles outsourced to contractors, as well as by considering the level of control given to these external contributors, which are factors that may be taken into account in determining whether the relationship is in fact one of employment, and then triggering an employer's duty of care and their legal and financial liabilities including paid leave, superannuation and workers' compensation. Our proprietary online tool, ContractorCheck assists companies to determine contractor versus employee status, and manage the risk of misclassification across their workforce.

Service centres and offshoring

• Multinationals started the offshoring trend years ago, and now mid-size businesses and even smaller organisations are jumping on the bandwagon. Compliance across geographies and supply chains remains critical to the success of this strategy.

From a legal perspective: companies should pay particular attention to the human rights track record of their subcontractors, as well as to their geographical exposure in terms of social, political and environmental risks. While most countries have specific regulation related to human rights, the United States presents an added challenge: the joint-employer status rejected so far in Australia. Companies with US exposure should consider their liability for labour violations committed by their contractors across the world, and take the necessary risk mitigation measures during the procurement and contracting process.

'Open source' human resource model

• The stock market sweetheart is turning into a courtroom regular. Uber, once hailed for its disruptive business model, is fighting lawsuits across the world, with American federal courts referring cases to arbitrators while European regulators frown (Source: Bloomberg).

From a legal perspective: while the 'open source' model remains viable, to avoid legal action a few steps must be taken. First of all, the aspects of control, autonomy and exclusivity are relevant, with the issue arising of whether individuals should be classified as independent contractors or employees. Secondly, the 'connected work market' presents a host of technology, intellectual property and privacy-related risks which should be considered before accessing independent talent.