NAB sackings are just the beginning

NAB boss Andrew Thorburn has fired the starter’s gun on the labour revolution that will dominate the next decade.

National Australia Bank chief executive Andrew Thorburn has announced plans to axe 6000 workers over three years, or about one-fifth of the bank’s workforce.

What National Australia Bank chief executive Andrew Thorburn did this week was to blow the starter’s gun on the labour revolution that will dominate the next decade. And that revolution will see not only a radical change in the types of jobs on offer but a dramatic swing to self employment and small business. Australia is a world leader in preparing for this swing but much more is required, particularly in the taxation administration system.

Every bank, many accounting firms and law offices, plus large companies like Telstra all know they will need to use the new technologies to follow NAB and slash staff. If they don’t take that action they will be severely damaged because their rivals, including start ups, will take slabs of market share because they will have lower costs.

NAB’s announcement that it would be retrenching staff will become routine among large service enterprises and organisations as sophisticated technology takes over jobs in 2018 and subsequent years. The revolution has already ravaged manufacturing and now spreads to services

Indeed one of the four big banks (not NAB) plans to halve its staff over the next decade. But how do you tell the staff that their jobs are in jeopardy without destroying morale? Many CEO’s, including those in the public service, leave it for their successor or make no announcement and have multiple reductions on a regular basis. It destroys morale.

That’s why National Australia Bank CEO Andrew Thorburn has decided to tell his staff the truth and in the process set a benchmark system for all major company chief executives by looking after those being retrenched. The days of the pink slip and being shown the door are to end at NAB.

Not only are NAB’s methods ground breaking but the timing is fascinating — many banks seem set for tougher times in the light of the apparent end to the Sydney and Melbourne housing boom triggered by the big fall in Sydney and Melbourne apartment prices.

Those bank CEOs who delay action might find themselves making their staff cut back announcement in tougher times. Many big housing loans will have been made to people who are set to be retrenched at a time of falling dwelling prices. NAB did well to get in early.

Two months ago Thorburn flagged that he might help staff who were being retrenched with retraining programs and a wide array of other assistance measures. His chairman Ken Henry was present when the proposal was canvassed.

Among the proposals in what NAB calls a “bridge” program is to teach NAB employees how to run a small business, underlining that a great deal of the employment in the future will come via small enterprises. After a bad start NAB has taken the lead in revamping its small business overdraft agreements so they are easy to read and fair.

To help the community adapt to a greater proportion of small enterprises, the government has passed unfair contracts legislation and encouraged large companies to pay small enterprises in 30 days. More work is needed on the fast payment front.

An important part of the preparation for different avenues of employment is the road map that Siemens chief technical operator Roland Busch set out yesterday in his conversation with me.

Among the most obvious areas of new employment are those connected with preparing companies for fundamental change. Indeed, Thorburn underlined this trend by on the one hand retrenching 6000 people and on the other recruiting 2000 new staff skilled in technology transformation — an area where the 6000 being retrenched are deficient. They should consider training in this area and our children and grandchildren should understand the implications of the NAB decision to their career choices. Busch explained that not only will healthcare boom but new and unexpected industries will develop, including a rejuvenated manufacturing industry. In addition there is considerable scope analysing the masses of data that companies are assembling. Busch says that the new world will also open up many opportunities.

But one area where the nation has let down small enterprises is our failure to set up a proper totally independent appeals system on small business tax claims. As I have shown many times, the current system is broken which jeopardises honest small enterprise tax payers. It must be fixed and the NAB starter’s gun makes it a matter of urgency.