Helping Hands

The Employment Advisor Story

In 1996, as human resources coordinator for the Accor hotel group, Miles Heffernan was responsible for managing the reporting process for employee injuries. Heffernan says: "The amount of paperwork was ridiculous, I'd be filling in a form for the boss, one for the government, another for the insurer all with exactly the same information. I knew there had to be a better way to manage the process."

After four years working in various human resources roles and as the general manager of an employment services consultancy, Heffernan decided to branch out on his own. He started The Employment Advisor (TEA) in 2001. He says: "George Pippos and Nick Amarandos from Mr Corks Liquor Group gave me my first contract - 12 weeks conducting an audit and review of their human resources needs. This extended out and I still manage their industrial relations and general human resources." 

Heffernan's big break came in 2002 when the Australian Hotel Association (AHA) and the Liquor Hospitality and Miscellaneous Workers Union introduced a new hotel managers' award. Heffernan says: "This would have added at least 15% to the manager's wage which was unrealistic for hotel owners."

Heffernan contacted every independent publican in Queensland about the problem. More than 140 asked him to represent them. He says: "These were all members of the AHA who were saying ‘We aren't happy'. Because of the sheer people power the AHA had to change the award and I gained new clients."

But Heffernan's dream of simplifying the safety reporting process stayed with him and he began researching the idea of an injury-management software package.

The Challenge

Recovering from financial strain.

The Solution

By 2005, with two national clients and the injury-management software in its first stage of development, Heffernan felt The Employment Advisor was ready for the next level of growth. He secured a competitive ten-year lease for a full floor of office space that needed a complete fit-out. Heffernan says: "The initial quotes I had weren't accurate and the fit-out was going to cost me three times what I had expected."

Money was also needed to continue developing the software package and then the Howard government introduced WorkChoice. Industrial relations advocacy represented more than 50% of the business and suddenly that business was gone. Heffernan says: "We went from being in the [industrial relations] commission three times a week to no more than once a month."

With revenue down and expenses high by July 2006, Heffernan hit rock bottom. He says: "I had $100,000 worth of bills that I couldn't pay and that was going to be around $600,000 by the end of the year."

Heffernan turned to his mentors, his father Colin and his first client Amarandos, for advice. Heffernan says: "I spoke to them independently and told them the situation. We looked at cashflow projections and the major issues. The software emerged as the ticket out." 

To resolve the financial issues and keep the business alive Heffernan took the following steps:

• Changed the corporate structure of the company, scaling down the industrial relations advisory business to focus on basic advocacy.
  
• Sourced a residential builder to complete the office fit out, reducing the cost by 50% to $110,000.
  
• Sublet office space to a multinational tenant for a three-year term to reduce rental costs.
  
• Raised capital through the National Australia Bank and his two mentors to complete development of the Claimtrak software and cover the patenting legal fees.

Heffernan had to cut his own wages bill (from seven to three staff) and take on more of the work himself. He says: "I had to step back into the revenue stream and bill more myself; it meant I lost some very good people."

Claimtrak was initially offered as part of the TEA service. In December 2006 Claimtrak was made available separately for clients willing to pay an upfront licensing fee for the software and fees for tailoring of the product. A chief operating officer was appointed to manage Claimtrak.  Heffernan says: "I was too emotionally attached to it; the structure I was creating was adding costs. I needed someone with a systemic approach."

Distribution of the Claimtrak software was outsourced in May 2007 to a human resources testing house The Rogers Group. Heffernan says: "They already distribute psychological profiling software so their clients trusted them. They gave us credibility and scale and could do it more quickly and efficiently than I could."

The Result

In February 2007, three clients had signed up for Claimtrak; there are now over 110 clients including Visy, MiniMovers, Ronald McDonald House and Colorado. Heffernan says: "Now the software is developed we can focus more on the profit rather than the turnover."

In the 2007 calendar year, TEA increased turnover by 50%. It is on target to achieve a 30% increase for 2008.

An international patent is being finalised. Heffernan hopes to export Claimtrak to New Zealand, Canada and the United Kingdom within the next five years.

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