Five things we learnt from the 7-Eleven scandal

From early morning caffeine hits and midday snack cravings to banishing anticipated hangovers, most of us have set foot in a 7-Eleven on one occasion or another. The appeal? There’s a vast selection of fast-moving consumer goods available to purchase at your fingertips. Service is generally fast, friendly and above all, convenient.

But is there a price on this convenience? As a high profile investigation fronted by Four Corners and Fairfax Media recently revealed, the answer is yes. Journalists put together a strong case against the standards and policies of Australia’s 7-Eleven empire, and found an alarming pattern of systematic underpayment, along with the purposeful falsification of payroll records.

So what can we learn from their mistakes that were ruthlessly hung out to dry by the Australian media? Here’s five things every HR department should take away from the 7-Eleven scandal:

Know the importance of staff satisfaction

While it was Four Corners and Fairfax Media that made the scandal public, the downfall of 7-Eleven was ultimately triggered by whistle-blowing employees.

Sick of ‘slave labour’ rates, internal employees made an active effort to expose their dire working conditions. Informants include head office staff, former on-site workers and a keynote consumer advocate. The lesson? Don’t annoy employees because they will retaliate.

Just because your staff may not be performing highly skilled work, you should never underestimate the value of staff satisfaction. Play by the rules, and your workforce will reward you with loyalty, productivity and performance.

Have a watertight rostering solution in place

7-Eleven deliberately tampered with rosters, but accidental discrepancies can also seriously damage staff satisfaction. Not to mention a company’s reputation.

This is particularly relevant in workplaces in which both staff and rosters are dynamic and continually changing. Avoid any mix ups by investing in a purpose-built workforce-management solution. This will help to keep employees paid accurately and on time, and eliminate the risk of any mix ups.

Keep meticulous records

Since the scandal broke the Fair Work Ombudsman has raided almost 100 7-Eleven stores across the country.

Investigators are on the hunt for evidence of record fabrication, and are literally upturning both paper and digital files in the process. Save yourself time and stress by carefully recording all documentation, ideally in the cloud.

Set standards and policies

One of 7-Eleven’s biggest downfalls was the fact that head office ignored case after case of underpayment.

Make it easy for employees to voice concerns and raise questions by establishing clearly defined standards and policies, and follow them up with meaningful action.

Hire within your means

Hiring strategies should always align with the financial characteristics of a business. 7-Eleven franchises went wrong by taking on employees that they simply couldn’t afford to pay. This was due to a deplorably unfair model that saw 57% of profit share channelled back to head office, while franchisees were left with just 43%.

The result was the mass underpayment of workers. While not all FMCG businesses pay out to a head office, the scenario does highlight the importance of developing a bespoke staffing budget, and hiring within your means.

7-Eleven might be in full-blown disaster management mode, but for the franchise sector – and the broader business community – there are a host of valuable lessons to be learned.

Chris Power, Head of Workforce Management, Ento

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