What the Fonterra fallout means for HR

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When one of the country’s largest exports is hit by a scandal the magnitude of what dairy giant Fonterra is experiencing, what can HR do?

News of contamination in a key ingredient in some of Fonterra’s baby formula shook not only the reputation of the company, but also the 100% pure image New Zealand strives to uphold.

In a situation such as this, HR must provide support to employees and managers directly involved, says Antonia Haythornthwaite, principal HR advisor at Blue Dot Human Resources.

She says this is important from a health and wellbeing perspective as well as an employment relations perspective.

“As internal and external investigations get underway, it's important to recognise individuals (and their families) could be fearful and stressed about the potential impact on their employment,” she said.

Haythornthwaite says consideration should also be given to the possible impact on engagement levels of employees indirectly involved.

“They will be watching closely to see how their colleagues are treated as it could be indicative of how they would be treated in a similar situation.”

Workplace culture should also come under scrutiny. “Was the behaviour and actions of the company, its leaders, its managers and its employees during and after the 'incident' in alignment with the values?”

Rachel Walker, national president of HRINZ (the Human Resources Institute of New Zealand) says communication with staff during a time like this is critical to long term commitment.

“For many people, this will be seen as a test of leadership and how people are treated during this time will be remembered for a long time to come … events like this can have long-term consequences on all forms of a company's reputation, including employment branding. ”

Ms Walker adds HR may also have a practical role to play, ensuring staff don’t burn out.

“We are already hearing Fonterra say they are working around the clock on the issue, but tired people don't always make the best decisions.”

New Zealand Prime Minister John Key, reportedly earlier accused the company of a "staggering" delay in revealing the contamination and yesterday revealed he will travel to China to limit the damage if he needs to.

Share your thoughts below.

  • Carl on 30/08/2013 11:39:22 a.m.

    Ok, so Fonterra tarnish NZs reputation (not that we were ever 100% pure), then dismisses a few execs, and now reveals that its all been a mistake. No actual botulism risk at all!

    HR will now have a task trying to convince their employees that the business is not lead by idiots, and that its decision making process is rationale. I can already hear HR saying: "its not our job".

    In my mind, this is a massive corporate blunder estimated to be worth about 10 million. Im sure that the business leaders and probably HR (all the same right?) will justify this by saying that for H & S matters, its better to be safe than sorry. Wrong Fonterra.

    An organisation with this poor leadership (correction: perception of poor leadership) should not be allowed to be so dominant to the point of damaging New Zealand. This is an organisation created by the government, and now should be dismantled by the people. A cooperative model that benefits the farmers, but not the public. Maybe we may see milk price for NZ consumers at realistic levels if there was true local competition?

    Ex-Fonterra execs can always go and work for Cadbury... they will fit right in! (Remember the Palm Oil, pack size, off-shoring issues)


  • John on 27/08/2013 4:16:12 p.m.

    Everything in this article resonates with organisations involved. This is not just about Fonterra, there are a number of Government Ministries that are directly affected by issues such as this.

  • James on 13/08/2013 4:01:38 p.m.

    They'll learn a few lessons from this if nothing else

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