The New Employment Rights Bill: Will It Deliver Growth? Top Tips for SMEs
Understanding the Bill's potential impact on the economy and businesses: Strategies for success
The UK government has introduced the Employment Rights Bill, aiming to modernise and strengthen worker protections. This significant piece of legislation promises to reshape the employment environment with measures like guaranteed hours for gig economy workers, flexible working rights from day one, and enhanced protections for those on family leave. There are multiple inroads to the work and health agenda, especially when thinking about the psychosocial impact of working conditions.
But amid these changes, a critical question arises: Will the Employment Rights Bill actually deliver economic growth? And for small and medium-sized enterprises (SMEs), how can these new regulations be navigated effectively?
This blog post will explore the potential impact of the Employment Rights Bill on economic growth and provide practical tips for SMEs to adapt and thrive as the employment landscape changes.
Will the employment rights bill deliver growth?
Growth through legislation is always tricky. While the Bill has admirable goals, it must balance protecting workers with maintaining a pro-business environment that encourages expansion and innovation.
This balance is particularly difficult to get right at the very genesis of innovation. When entrepreneurs begin to think about hiring an early team in order to build out their potential to deliver more, they are faced with lots of red tape. Very few can afford to hire operational talent early on. This means that lots of founder/ CEO time is spent on set up and compliance. While this is important, it can stifle growth and expansion.
The new regulations outlined in the Bill will push up more red tape. For example, while allowing employees to request flexible working from day one will open up opportunities for some, the administrative burden of this for smaller business as they try to adapt their operations to accommodate requests may actually work against growth. Larger organisations will have personnel and even teams and departments dedicated to these operational issues and should be better placed to accommodate requests without diverting resource away from critical functions.
In employment law, the terms "reasonable" and "reasonably practicable" are essential concepts that determine the obligations and duties of both employers and employees. These terms are used to assess whether actions taken meet the standards expected under the law, ensuring fairness and safety in the workplace. These terms have historically helped to balance the needs of an organisation and its employees, and therefore allowed some protection for businesses of different stages and sizes as they try to support their workforce. The economy is not a monolith. How employment regulations work in practice must account for nuances. Communications between the government and the business community as the Bill moves through parliament is essential in optimising this.
Top Tips for SMEs Navigating the New Regulations
Adapting to significant legislative changes can be daunting, but with proactive planning, SMEs can turn potential challenges into opportunities.
1) Understand the Key Provisions and how they relate to your organisation. Anticipate impact, including on budget.
Where is the organisation currently in relation to the Bill?
What is your current flexible working offering? Do you have anyone on your books on a zero hours contract?
Will you need to spend more on recruitment, software, paid time off? Will you need as much on site space if more people opt to work remotely?
2) Establish clear procedures and update policies.
Policies are so important for the workforce/ organisational relationship, setting clear boundaries and establishing pathways for when challenges arise.
How will flexible working requests be submitted, considered and outcomed? What are the timelines involved? What if an employee wants to change the arrangement that was agreed on initial hire?
3) Communicate with your team
Your workforce will have heard about the Bill. They may be thinking about what the it means for them, and communicating about potential changes to one another. Opening lines of communication is generally helpful. Listen to concerns and gather their input to understand what is important to them to make any upcoming transitions smoother. Keep them informed and emphasise collaboration and aligned incentives.
4) Leverage technology
Technological solutions should be implemented when they help outsource operational burden. From HR software to manage requests to upgraded software for better remote collaboration, think about what will work well and consult your team before implementation.
5) Upskill and lean on expertise
If you are a CEO with many hats, invest in training so you feel comfortable and confident in managing the basics around your obligations under employment legislation. But don’t sit on confusing and nuanced cases, recognise where expertise is required. Asking for help early on can contain risk and allow all stakeholders to work towards quick and comprehensive resolutions.
Lara’s take
Workplace culture and how an organisation looks after its people is fundamental to its success. The Bill will provide opportunities for SMEs around attracting and retaining talent. Treating regulations as a tick box exercise may seem the easier approach at first, but doing this loses the opportunity to leverage the changes to the benefit of the organisation. Businesses must proactively engage with the new regulations, and think through how they can make this legislative shift work for them and their direction of travel. The goal is to find ways to use the changes to modernise their practices and enhance employee relations, employee health and productivity along the way.
Great piece and an interesting question! Without knowing the full detail of the bill, a few thoughts:
If governments want to encourage employment and innovation, they should reduce - not increase - the administrative burden, while providing reasonable protections for employees. To a great degree, companies and founders are mobile! In the US, for example, many companies have left California because of the state's burdensome and punitive regulatory regime. They have moved to states with more business-friendly policies, which means the growth and employment now occurs elsewhere. Likewise, founders will be motivated to start companies where the conditions are most favourable.
Labour is a market. Instead of requiring companies to provide certain types of employment structures, why not let companies decide what is most suitable for them? Those who offer appealing structures will attract talent -and those who don't likely will not.
Terrific tips, especially around clarity in policies and communication and seeking guidance from HR and employment experts.