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September 23, 2024
Labour's Proposed Employment Law Changes: What Recruiters Need to Know
Key Legislative Changes
As we approach October 1st, 2024, the Labour government is set to introduce significant changes to employment law that will directly impact recruitment practices. With the introduction of the Employment Rights Bill and the Draft Equality (Race and Disability) Bill, employers must prepare for these upcoming reforms. Here, we highlight the key changes and their implications for hiring managers and business owners.
Key Legislative Changes
Employment Rights Bill
Anticipated to be laid before Parliament by October 12, 2024, the Employment Rights Bill aims to deliver Labour’s vision for a fairer workplace through its "New Deal for Working." Here are some pivotal policies included:
- Outlawing Zero-Hours Contracts: The bill proposes to eliminate exploitative zero-hours contracts, allowing individuals to have an average hours contract that reflects their actual working pattern. This shift may encourage businesses to rethink their workforce management strategies.
- Protection Against Fire and Re-Hire Practices: The bill seeks to clamp down on fire and re-hire procedures that have been frequently criticized. This will replace and strengthen the existing statutory code introduced in July 2024, promoting fairer treatment for employees during restructuring.
- Day One Rights for Workers: Key employment rights, including sick pay, parental leave, and unfair dismissal rights, will apply from day one of employment, albeit subject to probationary periods for new hires. This change underscores the importance of communicating these rights during the recruitment process.
- Default Flexible Working: Flexible working will become the default from the first day of employment, requiring employers to accommodate requests where feasible. Recruiters must be prepared to discuss flexible working options during interviews to attract a broader talent pool.
- Single Enforcement Body: The establishment of a single enforcement body will strengthen the enforcement of workplace rights, adding an extra layer of accountability for employers.
Draft Equality (Race and Disability) Bill
This bill aims to enhance equal pay rights, focusing on closing the pay gaps for ethnic minorities and people with disabilities. Key points include:
- Mandatory Pay Reporting: Employers with 250 or more employees will be required to report on ethnicity and disability pay gaps, making it easier for individuals to bring equal pay claims. This transparency can affect recruitment strategies as candidates may seek employers committed to equity.
- Broadened Equal Pay Rights: The bill will extend statutory rights to equal pay beyond gender, ensuring protections for those from ethnic minority backgrounds and individuals with disabilities. Employers should review their pay structures and ensure fairness to attract diverse candidates.
Our Perspective on These Changes
At Appointments Personnel, we view these proposed reforms as a positive step towards a more equitable workplace. However, they will require businesses to adapt their recruitment processes and communication strategies. Here are our insights on how to navigate these changes:
- Revise Job Descriptions and Interviews: Ensure that job descriptions reflect the new rights and benefits clearly. Prepare to answer questions about these changes during interviews.
- Highlight Workplace Culture: As flexible working becomes the norm, emphasizing a supportive and inclusive workplace culture in your recruitment efforts will help attract top talent.
- Stay Informed and Prepare: Keep abreast of the progress of these bills as they move through Parliament. Understanding potential timelines will help you adapt your hiring strategies effectively.
Conclusion
The upcoming changes in employment law, spearheaded by Labour’s proposed bills, present both challenges and opportunities for recruiters and business owners. By proactively adapting to these reforms, organizations can enhance their attractiveness to potential candidates and create a more inclusive workplace culture. As always, staying informed and prepared will be key to maintaining an effective recruitment process in this evolving landscape.
What Should I Do Now?
Think about how these new regulations could impact your existing processes and contracts:
- Review Employment Contracts: Do you have any existing policies regarding expectations for out-of-hours work and rights available from day one for new employees?
- Consider Out-of-Hours Contact: Reflect on your needs and approach concerning out-of-hours contact with employees.
- Prepare for Changes in Performance Management: Anticipate the need for robust evaluations during probation periods. This includes:
- Establishing clear performance targets and expectations, well-documented through emails, letters, or notes in your HR system.
- Creating detailed job descriptions to clarify roles and responsibilities.
The shift to ‘day one’ rights will impact your approach to recruitment. Many employers have previously relied on the two-year employment rule for unfair dismissal claims, but with rights starting from day one, a more considered and thorough approach to recruitment will be essential. By preparing now, you can ensure compliance and create a more effective hiring strategy for the future.
Need more information? Reach out to Kerry on 01782 33877
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From April 6th 2025 there will be significant shift in employer National Insurance (NI) contributions, with the rate increasing by 1.2 percentage points to 15%, and a lowered earnings threshold now starting at £5,000 (down from £9,100). These adjustments could lead to higher payroll expenses for mid-sized and larger businesses, affecting hiring strategies and budgeting in 2025 and beyond. Key Details of the Change Rate Increase: The NI contribution rate for employers rises to 15%. Lower Earnings Threshold: Employers will now pay NI on earnings starting at £5,000, significantly reducing the exemption range. This change is intended to boost government revenue but will likely increase costs for businesses with lower-wage roles. Employment Allowance Adjustments: The Employment Allowance, which offers some relief on NI costs, increases to £10,500. This provides a cushion for many small businesses, particularly those employing fewer staff. How These Changes Impact Staffing and Recruitment Businesses may see these shifts reflected in higher staffing costs, particularly for mid-sized and larger firms with significant payrolls. These added expenses might influence decisions on wage increases, hiring plans, and even the type of roles businesses choose to fill. Employers should prepare for potential shifts in their budget allocations to maintain competitiveness while managing increased contributions. Preparing Your Business Planning ahead is essential. Key steps might include: Calculating projected costs to budget for the changes Evaluating workforce needs and considering the potential impact on hiring strategies Maximising allowances by confirming eligibility for the updated Employment Allowance We will be updating our blog in the coming days with a detailed breakdown and calculations, so visit us again soon!
The national minimum wage & national living wage is a legal right which covers almost all UK workers
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The Outlook for HR in 2025: Trends, Challenges, and Opportunities for Senior HR Professionals
In the fast-paced world of business, the ability to secure and retain top leadership talent can make all the difference between stagnation and exponential growth. For SMEs in particular, the right leadership hires are not just crucial for filling vacancies—they are key to shaping the strategic vision, driving operational efficiency, and laying a foundation for long-term success. As we look ahead to 2025, let's delve deeper into why selecting the right leadership is more important than ever and how you can strategically approach these critical hires. Why Leadership is the Cornerstone of Business Success Leadership roles such as Finance Directors, HR Business Partners, and Operations Managers are not just functional—they are transformative. Over the years, we’ve seen firsthand how the right leaders can unlock business potential and propel organizations forward. However, the wrong hire can lead to disruption and inefficiency. Here's how these roles contribute to sustainable growth: Finance Directors (FDs): A Finance Director is far more than just a custodian of the company’s finances. They provide essential strategic insights that guide decision-making and drive growth. By identifying cost-saving opportunities, optimizing cash flow, and ensuring sound financial health, a strong FD plays a pivotal role in the profitability and scalability of a business. HR Business Partners (HRBPs): In an era where talent is one of the most valuable assets, HRBPs are instrumental in aligning human resource strategies with overarching business goals. They not only develop retention strategies but also cultivate a company culture that attracts and retains top talent. A dynamic HRBP ensures your workforce is engaged, motivated, and ready to contribute to business success. Operations Managers: The heart of operational excellence, Operations Managers optimize workflows, manage resources efficiently, and ensure that day-to-day operations run smoothly. Their impact is felt directly through enhanced productivity, cost savings, and improved customer satisfaction—all of which are integral to the growth trajectory of your business. The Strategic Impact of Leadership The right leadership hires provide more than just functional expertise—they are game-changers. Here's how they create lasting value: Strategic Vision: Great leaders inject fresh perspectives and innovative ideas into the business, helping to navigate challenges, identify new opportunities, and position the company for future success. Increased Efficiency: Proven leaders streamline operations, reduce waste, and optimize processes, which leads to higher productivity and a more cost-effective business model. Stronger Teams: Exceptional leaders inspire and attract top talent. They foster collaboration, empower teams, and build a culture of high performance that drives business outcomes. Risk Mitigation: A strong leadership team proactively addresses challenges before they escalate. They are adept at implementing contingency plans and creating stability during periods of uncertainty. The High Cost of a Bad Hire In our extensive experience working with SMEs, we’ve seen firsthand how damaging poor hiring decisions can be. Not only do you risk impacting team morale and productivity, but you also face significant financial consequences. Research shows that a bad hire can cost as much as three times the employee’s annual salary, considering recruitment costs, training, and lost productivity. For SMEs, these costs can be crippling, making it imperative to approach leadership recruitment with precision and strategy. How to Secure the Right Leadership Talent 1. Define Your Needs with Precision: Before embarking on the recruitment process, clearly outline the specific skills, experience, and qualities required for the role. This ensures the candidate will not only be a technical fit but also align with your business goals and values. 2. Prioritize Cultural Fit: Leadership is about influence, and a leader who shares your company’s values will integrate seamlessly into your organization. They will inspire your team and create a harmonious work environment conducive to growth. 3. Leverage a Confidential Recruitment Partner: Engaging with a specialist recruitment consultancy that has a deep understanding of leadership roles ensures access to a broader, more diverse talent pool. Confidentiality in this process is essential, particularly when you are hiring for high-stakes leadership positions. 4. Use Data to Inform Your Decisions: Utilize salary benchmarking and competency assessments to make data-driven hiring decisions. These tools ensure your offers are competitive, attracting the best talent while mitigating the risk of overpaying. 5. Invest in Onboarding: A successful leadership hire starts with a structured onboarding process that enables the new leader to quickly adapt and deliver results. A robust onboarding strategy sets the stage for long-term success. Real Success Stories from Strategic Leadership Hires At Appointments Personnel, we have had the privilege of helping over 100 SMEs secure leadership talent in the past year alone. The results have been nothing short of transformational: A Finance Director helped a growing manufacturing business cut costs by 15%, improving profitability through strategic budgeting and financial oversight. An HR Business Partner implemented a company-wide retention strategy that reduced turnover by 30%, saving the business significant recruitment costs. An Operations Manager overhauled logistics and operational processes, reducing delivery times by 20% and significantly boosting customer satisfaction. Additionally, we’ve witnessed how having an expert second opinion during the hiring process can make a game-changing difference. One of our clients almost overlooked an exceptional Finance Director candidate due to an internal review misstep. With our insight, they hired the candidate, who went on to increase revenue by 25% within the first year. The Power of Confidential Recruitment When it comes to leadership hires, confidentiality isn’t just a matter of discretion—it’s a competitive advantage. Whether you’re replacing a key role or expanding your leadership team, maintaining confidentiality ensures that sensitive information is protected and business continuity is preserved. Emma and I understand the importance of this better than anyone, having worked on confidential roles ranging from Finance Directors to HR Business Partners and Operations Managers. With our bespoke, confidential recruitment services, you gain a trusted partner committed to sourcing the leadership talent that will drive your business to new heights in 2025 and beyond. Contact Emma Bonfiglio to book a confidential meeting - Emma@appointmentspersonnel.co.uk
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