Australia has largely escaped the worst of the global financial crisis, which still threatens to cause havoc in Europe, while America still deals with issues too.

However, a new worldwide report reveals that Australian consumers are more likely than Americans or Europeans to be frugal and have insecurities about the economy. So what effect is that caution having on business?

The consumer sentiment report by Boston Consulting Group (BCG) surveyed 15,000 consumers across 16 major economies, including Australia. BCG concluded there was a worldwide trend towards saving more and spending less, due to frustrations with governments and job insecurity.

The conclusion should not come as a surprise, but what’s interesting is that these fears are just as pronounced in Australia as they are in countries in recession and with much higher rates of unemployment.

Forty-seven per cent of Australians feel financially insecure (a higher percentage than the UK), perceptions of job insecurity have risen and 50 per cent of people plan to spend less on discretionary items, more than in the UK or the USA.

Interestingly, Australians were much keener than people in other countries to remain frugal and keep saving even when the economy improves, confirming that new spending and saving patterns could be here to stay for quite some time.

BCG’s James Goth told the Financial Review that the Australian results indicated a “cocooning trend”, with a focus on “family, home, stability and calmness”.

There are obvious challenges that many businesses face due to this trend – with consumers more reluctant to spend on non-essential items, sales volumes and/or profit margins will decrease. But the trend does also include some opportunities, as consumers look for simpler experiences.

Melanie Gleeson, founder of a day spa franchise based in Melbourne, said her company’s revenue has climbed, allowing her to expand to 65 franchises in total. She believes this is due to a trend towards smaller luxury experiences, like a spa session, instead of a longer holiday.

Value for money is front and centre of the thoughts of any consumer’s discretionary spending, with Goth confirming the trend towards using price comparison services, seeking special offers and looking to internationally-based websites.

The Reserve Bank is doing its part to encourage consumers to open their wallets and purses with interest rate cuts, but the results of this survey indicate people are determined to save and won’t be embarking on spending sprees soon. But there will always remain opportunities for businesses that provide value and a quality experience to their customers.

Do you believe consumers are being more cautious with their spending now? What tactics are you using to entice people to spend on your business?

A small business’s dismissal of a member of its sales team has been upheld by a Fair Work Australia Commissioner, because he had lost the trust of his manager and colleagues by contacting the customers of other employees without their knowledge.

The employee, one of eight members of the sales team for the office supplies company, accessed the customer database to email a number of customers and offer his personal services, and failed to log his emails in the database, as per the usual process.

Each employee was paid a wage plus commissions based on the value of their achieved sales, heightening the incentive for the employee to make additional sales.

Another sales employee found about the unknown emails and alerted the director, who then summarily dismissed the employee and handed him a $2000 cheque. Other employees had alleged that he had used his telephone handset to monopolise incoming calls, with one commenting that he would’ve been concerned for the future working environment if the employee was to continue in his role.

In evidence to Fair Work Australia, the employee argued his emails were follow-ups from previous transactions in a bid to generate further sales for the business, and that he wasn’t given an opportunity to rectify his behaviour, contrary to the Small Business Fair Dismissal Code.

Commissioner Barbara Deegan said in her finding that the employer did not have reasonable grounds to instantly dismiss the employee, but the breakdown in trust between the employee and his colleagues and manager meant there was a valid reason for termination.

Commissioner Deegan also noted the size of the business, with just eight paid employees, and the importance of a harmonious environment to the company’s success, in upholding the dismissal.

“Clearly it is [the director’s] preferred method of operation to seek harmony in the workplace and to avoid confrontation. He would have preferred that the [employee] had chosen to ‘walk away’ when confronted with the matter of the emails and to avoid the necessity for terminating his employment,” the Commissioner found.

“With advice [the director] may have elected not to pursue a summary dismissal. Clearly, however, [the director] was of the opinion that it was not in the best interests of harmony in his very small workplace for the [employee] to return to work.

“In those circumstances it would have been difficult for [the director] to comply with the Small Business Fair Dismissal Code as, except in matters of summary dismissal, the Code appears to require an employer to allow an employee ‘a second chance’.

“The employer’s decision to terminate….employment was motivated purely by [the director’s] desire to ensure a harmonious workplace for his other staff and not by any vindictive or punitive factors.

“While there were some deficiencies in the procedures adopted in effecting the dismissal, I do not consider that these deficiencies, in all the circumstances of this matter, were sufficient to render the dismissal unfair,” Commissioner Deegan concluded.

A survey of young American college graduates has produced some revealing insights about what their expectations of their own career paths and their future employers, and the results bear noticing for Australian business owners.

In summary, the next generation of workers as a whole appear to have higher expectations, compete more with their peers, have less staying power and are more prepared to leave a job that’s personally unfulfilling.

The survey, by recruiting group Adecco, found only three per cent of respondents believed they would stay in a job for longer than five years. The connotations from this finding shouldn’t be all negative though, as a vast majority of respondents indicated their willingness to move to a new area, indicating a trend towards increased flexibility among young workers. About 90 per cent said they wouldn’t be willing to stick around in a job they didn’t enjoy and would likely leave within 12 months.

Regarding expectations of an ideal role, a majority of respondents confirmed they would expect to receive health benefits, opportunities for career development, a positive work/life balance and a good company culture among other factors – all rating above perks like extra holidays, office location and other business-related ‘perks’.

A recent Australian survey of ‘Gen Y’ employees confirmed the lofty expectations of most young workers, especially when it came to lifestyle and making enough money to being able to own their own home at some stage.

Catering for personal time

Graduates indicated they rated the ability to maintain their personal networks highly – nearly one in every four wouldn’t take a job where they couldn’t make or receive personal phone calls, and one in five would refuse a job that disallowed access to personal email.

It feeds into the theory that for most young workers have lessened the difference between personal and business lives, which led to SAP Australia instituting a ‘bring your own device’ policy to enable young workers to use their own laptop or tablet for work and personal purposes.

The survey also indicated greater pressure when it came to ‘keeping up’ with peers – 70 per cent felt career pressures in this aspect, while two-fifths said they were pressured when they saw peers making more money or get to a higher position, and one-fifth said career-related social media postings contributed to career pressures.

“With social media, this generation can see everything their peers are doing,” said Adecco’s Janette Marx. “So they feel like they have to move more often to keep up with where their friends and classmates are.”

Without stereotyping or pigeonholing younger employees, especially tertiary educated ones, the snapshot does provide some valuable tips and insights into the minds of the newest generation of full-time employees.

The Federal Court has dismissed a union appeal against a variation of the modern retail award that will allow school students to work shifts of less than three hours, opening up part-time employment opportunities, especially after school hours.

The appeal was dismissed by Justice Richard Tracey, confirming the earlier decision of Fair Work Australia which deemed that the ation to the General Retail Industry Award 2010 was necessary. This was on the grounds that the minimum three hour shift requirement in the award was a barrier to employment, particularly in areas where retailers close less than three hours after the school day ends.

Justice Tracey rejected arguments from the Shop, Distributive and Allied Employees Association (SDA) that the variation of the award was discriminatory, because other potential employees would be overlooked because they had to be engaged for at least three hours.

Many modern awards, Justice Tracey found, contained elements of indirect discrimination.

“Awards typically contain many provisions that discriminate between employees. Wage rates, for example, are usually fixed by reference to criteria such as length of service and qualifications held.”

VECCI is pleased with the Federal Court’s decision to uphold Fair Work Australia’s variation of the modern award, as it broadens the number of potential individuals who can undertake retail work.

It also opens up employment opportunities for students seeking after-school work, and assist with their eventual transition to the full-time workforce.

VECCI is seeking that similar flexibility provisions are clarified and amended for employees under other awards. We’ll keep you up to date with our progress here on the VECCI Blog.

For entrepreneurs setting up a new small business, there are many tasks to manage and complete, and one of the hardest can be deciding on a suitable name for your enterprise, as a name can be crucial to its success.

Considering there are about two million businesses registered in Australia, it’s very hard to stand out in a crowd, so it’s surprising that, as Wayde Bull writes in the Sydney Morning Herald this week, that 90 per cent of businesses choose a name that literally describes what they do.

A catchy or clever name can differentiate your business from its competitors – Bull cites the example of bedding chain Forty Winks, which people immediately associate with bedding and sleep.

A name based on a pun or which incorporates humour can also work – think of Melbourne vegetarian restaurants Lentil as Anything; a name which is far more likely to be remembered and recited by its customers. Bull believes one of the three keys of a successful business name and, eventually, a business brand, is a name that your customers and clients are likely to tell others about.

Not all names have to be ‘pun-tastic’ to be clever though. USA Today’s Steve Strauss recites a personal story when he wrote about the topic of business names recently: when choosing from a range of outdoor cleaning products at a hardware store, he chose a brand named ’30 Second Outdoor Cleaner’, because from the name alone he expected it would be “quick, easy and effective”, and evoked an image of convenience.

This buys into Bull’s second key for successful business names: getting the company recognised for what it does best. “When marketing dollars are scarce, put all of your effort into getting your biggest point of difference across to customers,” he says.

“Don’t try to promote a load of different messages. Introduce yourself and play your strongest card, fast.”

A business name that sells a message of comfort, convenience, efficiency or other positive attributes will let the customer know immediately what they can expect, and what makes it better than the rest.

The third key, Bull writes, is to register your business name so nobody else can use it, and you have sole rights to it – it will only cause trouble down the track to use a business name that somebody else owns the rights to!

What tips did you follow when naming your own business and what are some business names that you like?

Victoria’s peak tourism body, the Victoria Tourism Industry Council (VTIC), along with the Victoria Events Industry Council (VEIC), have welcomed the Federal Budget announcement of an Asian Marketing Fund which will drive international investment in Victoria.

The establishment of the Asia Marketing Fund will be a significant move towards increasing trade and tourism relations with countries such as China and India which represent significant growing markets in Victoria.

Unfortunately, some of the gloss of this announcement has been taken away with the announced increase in the passenger movement charge, paid by travellers when they leave Australia. The significant increase of $8 will bring the charge to $55 from 1 July 2012 and may deter our important international visitors.

The investment of $10 million for a new community sports centre in the Olympic Park Precinct in Melbourne is positive news to both the tourism and events industries in Victoria. We are glad the government has recognised the importance of our sporting facilities as a valuable tourist attraction and events facility.

We also welcome the many benefits announced for small business such as the loss carry-back scheme and funding for the instant asset write-off which businesses in the tourism industry will ultimately benefit from.

In particular, the government’s extension of its business support service Enterprise Connect will assist tourism and events operators to identify new growth markets, and will complement the new government commitment of a $61 million Asian Marketing Fund.

The forecast $1.5 billion surplus announced in the Federal Budget is welcome, but beyond the announced loss carry-back scheme and funding for the instant asset write-off for small business, there are few measures that will materially reduce business costs, boost employment prospects and tackle structural challenges facing the economy.

The redirection of the company tax cut is disappointing, so too is the absence of new infrastructure funding for vital Victorian major projects such as the East-West link, the Metro Rail project and the expansion of the Port of Hastings.

The Budget targets families and low income earners. As important as this is, it should have been geared towards growing the productive capacity of the economy and creating an environment that spurs new private sector investment and jobs creation.

The modest investment in skills targeted at mature aged workers and the disadvantaged is welcome, and so to is additional funding to encourage a maths and science focus in education.

New spending for families, tax cuts for low income earners, funding for a disability insurance scheme and support for aged and dental care are also positive initiatives of the Budget.

However, in reality the outlook has not improved for most businesses. The Budget represents a missed opportunity to tackle the many current challenges facing business including the looming carbon tax, impending higher superannuation contributions and the ongoing effects of global uncertainty and competition.

A productive employee is normally a happy employee, and someone who is willing to make the extra effort because of the loyalty they feel to their employer and/or manager. However a recent survey shows about four in every 10 employees would like to leave their job: so, how do you engender and encourage feelings of loyalty among your employees?

Involve your employees in strategy and decision making

One of the most effective ways to boosting someone’s loyalty is to give them a sense of ownership of the business’s direction. Involve your employees directly in important meetings, ask for feedback on strategies, create an ‘ideas’ box where people can contribute their thoughts – anonymously if required – and continuously keeping them in the loop will give employees an active stake in the business’s future success.

Show how they make a difference

Many feelings of despair within the workplace are generated due to employees feeling sometimes that their work isn’t necessarily contributing to the business’s overall success. US human resources management professional Henry Evans writes that it’s important for managers and employers, especially when working with younger employees, to “lift the hood” on the organisation to demonstrate why a person’s role is important.

Get to personally know your employees

An employee who’s treated like a machine is unlikely to have any sense of fondness for their employer. Get to know your employees and what’s happening personally to them – have they achieved something great, are they getting married, having children or building a house? There’s no obligation to become everyone’s best friend, but author Patrick Lencioni believes getting to know employees and what motivates them will only grow loyalty and productivity.

Combine work with fun

Loyalty is largely derived from enjoying a job and enjoying being at a workplace, so ensuring employees can combine their work with play can be a rewarding strategy for achieving loyalty. Depending on the type of work your company does, you may wish to consider things like team-building exercises, semi-regular games, scheduled social functions and a common room where employees are encouraged to mingle and get together while on breaks.

Reward loyalty with flexibility

Another strategy for encouraging loyalty is to reward those people who have already given their loyalty to you, either in the form of length of service or results achieved. Tielle Webb suggests offering flexibility for those who have worked a prescribed period of time, like a nine-day fortnight or the chance to do some work from home, or the chance to take extra holidays.

VECCI runs management and leadership courses in a range of areas that include managing staff and tactics for tackling adverse situations and challenges. Click here for more information.

What have you done in your business to increase employer loyalty? Let us know.

The attentions of Victorian business owners this week switch to Canberra ahead of the delivery of the Federal Budget, where significant savings are expected to be announced in order to achieve the budget’s promised return to surplus.

From a business perspective, the surplus will be pleasing, but only if the reduction in spending doesn’t weaken the economy or increase the cost of doing business.

Pressure has been eased on business with the Reserve Bank’s cut to the cash rate last week, and with business confidence still wavering, it’s vital that any savings are achieved with no disruptions to the operation of small businesses.

There are a range of potential initiatives that the Government can implement or begin to plan for to further reduce the business burden. Options include announcing a framework for broader tax reform or accelerating investment in skills, education and retraining.

In addition, there must be an answer to the confusion many business owners are experiencing about the planned phased increase in the superannuation contribution to 12 per cent, and potential wage trade off mechanisms that could assist employers with meeting the extra demand.

At a time when new carbon and mining taxes are being introduced, the superannuation levy increase is another added cost businesses will have to meet in the next few years, without any extra assistance – especially in Victoria, where the impact of the mining boom is not as pronounced.

Hopefully the Government recognises these business challenges and delivers a sensible, hard-headed budget that addresses them.

What do you want to see from the Federal Budget this year that would assist your business? Let us know.