Your business is motoring in New Zealand, and you want to step across the Tasman and do the same there, hopefully even more successfully. Your business case is ready, and now you need to find the people who can make it happen.
At this point, you need to research how to build a team in Australia and keep them. You should consult other business owners who've already done it and see how it is to run an operation with mostly Australian staff. You'll learn that employment laws vary from state to state, and you'll need to seek legal advice.
The New Zealand Trade & Enterprise website is a great place to start learning about the things you’ll need to consider when setting up a business in Australia. NZTE’s Australia Pacific Regional Director in Sydney, Glen Murphy, is an excellent source for case studies and contacts for other Kiwi companies who have trodden this path before.
Cultural fit is something you want to get right if this expansion is going to last the distance. Kea New Zealand Chief Operating Officer, Saya Wahrlich, says it’s important that small business owners have a purposeful culture already embedded in their organisation, as well as a set of values, a clear articulation of who they are, the problems they help solve for their customers, and why they’re different from others in their space.
“For Kiwi companies who can’t do this, it makes it hard for them to recruit offshore when candidates aren’t familiar with their brand,” says Saya.
Before you become an employer over there make sure you’re across the employment laws according to each state in Australia, or you’ve got someone who is. “If you’re hiring across multiple states, you may need to vary employment contracts or conditions and you need to be aware of any unions relevant to your industry,” she advises.
Looking at other businesses that have set up an operation in Australia is a great way to get a feel for the complexities and nuances businesses need to take into account when considering an Aussie expansion.
We’ve spoken to MyHR co-founder and CEO based in Sydney, Jason Ennor, to talk about MyHR’s own experience expanding into Australia, as well as three iconic NZ companies who have successfully done it to hear their stories.
MyHR expanded to Australia in 2020 so that it could provide support to small Australian businesses (and expanding Kiwi businesses), filling the same need it saw in Aotearoa New Zealand. There are HR tech support companies in Australia, but none provide access to experienced HR advisers as well as MyHR does.
Off the back of MyHR’s success in the New Zealand market, MyHR co-founder and CEO based in Sydney, Jason Ennor, wanted to expand into international markets and believed that Australia was the most logical next step with roughly 30% of MyHR’s Australian client base comprised of NZ companies expanding across the ditch.
“We know what we do is unique in terms of offering a complete HR and payroll solution with kick-ass software and real-world HR expertise, and due to the high number of trans-Tasman businesses, our value proposition ensures we can help Australian companies in Australia, or expand into NZ and vice-versa,” says Jason.
“Additionally, when we did our market validation work it was clear that there was nothing in the Australian market like MyHR, yet there’s high demand from small and medium-sized businesses here. The market has a number of dominant software-only players, but nobody provides the dedicated HR support like we do, at the price-point we offer.”
As well as a team of Australian HR advisers and a sales team in the Sydney office, Jason lives in Australia and oversees operations and maintains a hybrid Kiwi/Aussie culture. He believes it’s important to be in Australia the bulk of the time (or as much as you can) while you’re establishing a business there.
“There's nothing like having a leadership presence and feet on the ground in the market you’re moving into. It helps the local team feel like they're part of the engine room of the business, not just a remote satellite team, and it also sends a clear message to the market that we are serious about a long-term relationship,” says Jason.
Despite all the modern, post-COVID remote connection capabilities, it’s clear that human connection remains key; meeting people in real life and not just over a screen, and having important conversations face-to-face is invaluable as a start-up in a new country.
Whilst the markets may seem similar, there are numerous differences between the Kiwi and Aussie HR landscapes that need to be considered by expanding businesses.
According to Jason, the fundamental building blocks of both legal systems are the same in terms of natural justice, good faith, and common law requirements, but it's the nuances that are all important.
“NZ companies moving into AU frequently get caught out with the Modern Award system, AU treatment of minimum entitlements, Superannuation, and the management of casual workers. In contrast, AU companies expanding to NZ regularly get tripped up by the NZ consultation requirements for restructure and disciplinary process.”
In both cases, it pays to get expert advice, because assuming things are the same can create costly risks for your business.
So, how has an Australian found joining a New Zealand company like MyHR in its Aussie operation? Maddi Burnett, an HR adviser at MyHR in Sydney who used to work for a large financial services company in Sydney, says the culture fit has been pretty consistent.
“Everybody is very relaxed and easy to chat to, and I don’t think that’s necessarily the norm in Australia,” she says.
Maddi is regularly in touch with her MyHR NZ workmates on Google Hangout and Slack and remembers being slightly thrown in her first week when asked to name her favourite pie in her profile summary. Apart from that, she says it’s been pretty smooth sailing.
Because Jason spends three out of every four weeks in Sydney, Maddi says she feels like she has a good feel of the company culture and the “New Zealand perspective.”
Two senior team members in Sydney have visited the company in New Zealand, and the Sydney office has NZ staff visiting from time to time. In July, Maddi and her boss, Julian Hackenberg (Head of HR Advisory AU), will both be away overseas and New Zealand team members will come over to take their place for the period.
“The HR questions are still the same from clients, but it can just be a different process in terms of time frames. However, the crux is the same; there are just a few differences in terms of process,” says Maddi.
What tips would she have for New Zealand businesses hiring Australian employees? Post-COVID, like New Zealand, everyone expects to be able to work from home (some days at least). And if a company doesn’t offer that, potential employees will look elsewhere, says Maddi.
People are looking for more benefits with the cost of living on the rise, so employers who are seen to offer extras, like childcare subsidies or a gym membership, are appreciated.
NZ businesses coming to Australia need to be prepared to pay substantially higher salaries in Australia and to pay more for super contributions, she confirms. That’s a 10.5% contribution of an employee’s ordinary time earnings towards superannuation in Australia, and it’s going up to 12% by 2025.
Maddi gives an example of where she has seen Australian and New Zealand employment laws diverge.
A New Zealand company was looking to make two people redundant - one in Australia and one in New Zealand - and they wanted to do the redundancy process at the same time.
“But, while I’d done my part in Australia and my counterpart in New Zealand had done her part, you couldn’t link up the dates and processes in parallel,” says the HR adviser.
The obligations of what the employer had to pay in redundancy differed between the two countries. There are redundancy caps in New Zealand while in Australia, it’s a far higher payout (according to the Fair Work Commission in Australia, redundancy pay after 12 months with the company is 4-12 weeks depending on the length of employment).
NZ clients are just shocked at how much you have to pay, she explains.
NZ-founded international leather accessories brand, Deadly Ponies, opened its first store in Melbourne’s leafy suburb of Armadale in 2021. Two days later, there was a Covid lockdown. This proved to be a huge baptism by fire for their New Zealand staff members who’d gone over to set up there, says Deadly Ponies CEO, Aimee Greenhough.
The company, founded by creative director Liam Bowden in 2005, employs a Head of Retail based in New Zealand, and has two regional managers; one for Australia and one for New Zealand.
The Australian regional manager is a born and bred Australian who formerly ran a business with operations in both New Zealand and Australia. She provides a lot of HR support to the store managers and, as it does in New Zealand, Deadly Ponies relies on MyHR in Australia for its HR needs.
“The thing with HR is that you don’t know you need it until you need it,” says CEO Aimee. “MyHR has been extremely helpful for us in Australia.”
When it comes to staff benefits, what you pay into superannuation in Australia is significantly higher than the New Zealand equivalent, Aimee says. She also discovered from MyHR, something called ‘long service annual leave accrual” (long service is five years plus) which has to be done from day one. She shudders to think of the impact for businesses suddenly discovering this five years down the track.
The biggest challenge is how different the award rates are in Australia and how stringent the rules are around whether someone is a casual worker versus a part-timer, Aimee explains.
The payroll setup over there is so complicated because of all the award systems, and there’s so much to know. For instance, there are different rates on a Sunday after 6 pm, which is not always common knowledge.
“The types of pay rates are very different. We’d completed some work with NZTE and were told labour was more expensive, but it’s also a much more complicated tax system,” she says.
“Don’t run payroll from New Zealand,” Aimee advises. “You need someone with in-market knowledge.” Deadly Ponies uses a payroll specialist at a Sydney accounting practice.
When it comes to recruiting for the store in Armadale and the Myer concession, the current Australian regional manager handles all the recruitment working directly with Julian at MyHR.
The biggest challenge when hiring in Australia vs New Zealand? “Every woman in New Zealand seems to have a Deadly Ponies story - ‘I can tell you about how I bought my first Deadly Ponies bag 10 years ago and that it still looks great,’” explains Aimee.
In Australia, there’s not that brand recognition or depth of knowledge yet, though the company is focused on telling its story there. As a consequence, an Aussie staff member isn't going to be so excited by brand benefits, such as a company discount, that a Kiwi one would be.
“The difference becomes obvious when we advertise for a role. For example, our last NZ role advertised had over 80 applicants but in Australia, it’s closer to 20,” explains Aimee.
The job offer itself has its challenges across the Tasman. “It’s a competitive job market in Australia, so when you’re ready to offer someone a role you have to consider how to present the offer compellingly,” she adds.
Training is a big deal with this luxury brand, with the store manager running one on one training and development. As well as this, Creative Director and founder, Liam Bowden, travels from Auckland to Melbourne for regular brand-focused training, running a ‘Meet the Maker” session with staff every time there’s a new collection. Staff learn about how the brand started, the vision for the brand, and the design inspiration and innovation ahead.
Nature Baby, the organic cotton and merino infant clothing business, went into Australia carefully, starting with pop-up shops in Sydney and in Melbourne after having a wholesale operation there for 10 years, and then opening a store in Sydney in March 2023.
Nature Baby co-founders, Jacob and Georgia Faull, asked their manager from the Auckland Grey Lynn store to head up the Australian boutique in Paddington. She had been with the business for two years, had lived in Australia before, and wanted to move back.
The Faulls have made a big effort to ensure she will be a truly stable representative in Australia. “We worked with her to give her a profit share incentive so she effectively becomes a part-owner in the business without legally being an owner,” explains Jacob.
“We’re working in true partnership which is key for the business,” he adds.
Australian recruitment has been a positive experience with seven staff working in the Sydney store. “They all have this “wanting to make a go of it” attitude,” says Jacob. “Sydney is not a cheap place to live so they want as much work as they can have.”
The culture transfer hasn’t been a problem. “Because staff are in the store with someone who knows the culture and is living and breathing it, it’s like a “colonised” version of commerce,” says Jacob.
Each store has an architectural, homely aesthetic with communal tiled kitchens where the local community, customers, and people sit and chat. “For the stores to work in the best way, it comes down to culture, architecture, and the person running it,” says Jacob.
The staff in New Zealand and Australia also have regular online meetings to discuss insights from the week. Jacob says he might bring the second in charge at the store back to New Zealand from Australia at some point so she can get a taste of Nature Baby in New Zealand.
The biggest difference he finds with running the business in Australia vs New Zealand is how expensive it is to operate on weekends and public holidays, with steep penalties if you get things wrong.
Education Perfect, an online learning company that empowers teachers and students around the world, expanded to Australia six years after it was founded in 2007.
Chief Operating Officer, Emma McAllister, says the company’s been in Australia so long, the Australian team has helped shape how it’s grown and helped define which values are most important to the business. It has staff, or EPeeps as they’re known, in Canada, Hong Kong, Malaysia, Philippines, Singapore, UAE, the UK, the US, Georgia, Greece, and Vietnam.
When a New Zealand member of staff goes to Australia, they’re offered all the benefits there that an Australian member of staff has, says Emma.
“We offer benefits such as extra annual leave at the end of the year and an annual wellness allowance which is translated into local currency. We offer these benefits for all employers globally,” she notes.
The company provides more benefits to an Australian staff member than a New Zealand one, as required. There’s a higher super contribution, and Australian employees are also eligible for long service leave in Australia.
The COO picks out the main difference in employment law between New Zealand and Australia. “New Zealand processes are well documented and defined,” she says.
“Employment New Zealand is incredibly helpful with templates and clear outlines of processes. In Australia there are more complexities with different state and territory laws”.
The company doesn’t have an HR person in Australia, instead running people management from New Zealand and liaising with an employment lawyer in Australia as needed.
Education Perfect, headquartered in Dunedin, brings Australian staff members over to New Zealand to give them a sense of the company culture. “We’re incredibly proud of our Kiwi heritage and ensure that all of our EPeeps globally get to see and feel our Kiwi culture,” says Emma.
The company starts and ends all staff meetings with a karakia and has woven Māori terminology into the business (for example, they have a #ka-pai channel on Slack where EPeeps can give a shoutout to another member of the team).
Of course, each business is different and you’ll likely find your own HR issues emerging when you’re up and running across the Tasman. What you can learn from these companies who have gone before you, is to take advice on employment law and staff benefits in the state or states where you base your business – well in advance of making the move.
Expanding to Australia will be an important step forward in your company’s international ambitions, so don’t underestimate how important it is to get the HR basics, such as recruitment and employment, right.