The people management landscape is ever evolving. As an SME employer, it is not always easy to keep up with changes in employment legislation and best practices while simultaneously stay relevant against competitors.

To address these challenges, we hosted a webinar in collaboration with the Finnish-British Chamber of Commerce, the Danish-UK Association and the Norwegian-British Chamber of Commerce. Presenters Jacqui Brown, HR Manager, and Anna Kuklinska, HR Advisor, both from Goodwille, focused on what you must do as an SME employer in the UK, but also other important considerations, such as being an attractive employer in the UK – what sorts of things will help you attract top talent, retain your talent, and generally improve your employer brand? The presenters also aimed to update the audience about the new employment legislation changes that recently came into effect.

Watch the full recording of the webinar and Q&A, or read some of the key takeaways below.

Recent Changes to UK Employment Law

Typically, every year there are changes to employment law applicable to all UK businesses – and this year is no exception. Though some have been postponed due to the COVID-19 crisis, there are still legislation changes that you must take into consideration as a UK employer now.

Contract of Employment – a Day 1 Right

From April onwards, employees are entitled to receive a statement of “written particulars” – the basics of employment terms and conditions – from day one of employment rather than after two months. There are also changes as to what must be included in the contract, such as benefits and mandatory training. If you fail to provide this as an employer, penalties can be as high as 2-4 weeks of compensation.

Pay Changes and Abolition of the Swedish Derogation

Agencies will no longer be able to avoid paying agency workers the same pay as employees for doing the same job, which provides increased stability and certainty for this employee group. Further, the reference period for establishing the average week’s pay has been extended from 12 to 52 weeks, in order to improve the holiday pay for seasonal workers.

IR35 Changes

The IR35 rules prevent contractors from working through Personal Service Companies (PCS), who are in similar roles to employees, to pay less tax and NICs than actual employees. Where it is concluded by the end client that IR35 applies, the fee payer will become responsible for accounting for, and paying, the related tax and NIC to HMRC.

Non-compliance as an employer is associated with fines, though the reforms have been pushed forward to 2021 due to COVID-19. Reviewing your work with contractors now is, however, a good idea in preparation for next year.

Flexible working

Flexible working is now a default scenario – you need to offer it and if you choose not to, you need to have a very strong business justification for not doing so.

Equality – Prevention of Discrimination and Harassment

Equality and Human Rights Commission have produced a set of guidelines that will now be used as ACAS Code of Conduct – although not a formal law, they will be acting as it in harassment and discrimination cases. Employers have to ensure that they are providing team members with training on harassment and discrimination; how to distinguish these, how to spot the signs and how to react to them.

Being An Attractive Employer – Why Is It Important?

It has never been more important to have a strong employer brand to attract key people and skills. A strong employer brand means your company is considered an attractive place to work, with distinctive values, work culture and career prospects.

Being an attractive employer can have many positive impacts such as the ability to recruit good quality candidates and retaining employees. Offering competitive benefits, taking care of your employees, and offering them training can be costly, though poor staff retention and candidate attraction leads to higher operating costs, low engagement and decreased productivity, which in turn affects your bottom line. Employer attractiveness will also give you a competitive reputation in the marketplace. Employer branding matters for customers as well – a loss of trust with consumers can have devastating consequences for your business.

How to Become an Attractive Employer

There are numerous things you can do to improve your attractiveness as an employer.

  • Additional benefits can be advantageous, though there are plenty of different routes to consider. Think about what your chosen benefits says about you and your company – if you want to be seen as a sustainable employer, focus on benefits in line with those values, such as offering healthy snacks and green business cards.
  • Training enables horizontal growth, which becomes especially important in a smaller organisation where everyone can’t be managers.
  • Corporate Social Responsibility initiatives are becoming increasingly common for businesses in order to make a good deed while creating a positive brand image.
  • Work/life balance and flexible working is, with the current COVID-19 situation, starting to become the new norm. For some employees, it is even a requirement, making it an important aspect when attracting talent.
  • Mental health care in the workplace, such as counselling services and the use of an Employee Assistant Programme, can be beneficial for not only its purpose, but also for how you are perceived as an employer.
  • Competitive family leave policies and retention practices, for example increasing days of annual leave, are other ways of boosting your attractiveness.

Employer Basics – the Musts

Apart from newly implemented legislation and employee benefits, there are some employer basics that you must adhere to if you are operating in the UK. Firstly, you absolutely need to have an employment contract compliant with UK employment law. Due to recent legislation changes mentioned before, already existing templates from a potential parent company pool will not suffice.

There are some HR policies that you must put in place. As a minimum, you need to have a clear, accessible guidance on the company processes and procedures for Disciplinary and Grievance. If you have five or more employees, you must also have a Health and Safety policy. As per GDPR 2018, a Data Privacy Policy should be in place for review and agreement with employees.

Though not required by law, other policies which you may want to consider for a slimmed down policy offering are Equal Opportunities, which can include Equal Pay, and Sickness-, Holiday- and Company Benefits. As for the latter benefits, these external policies give employers a better chance at varying or withdrawing from them, in comparison as if they were stated in the employment contract. It is important to note that SMEs entering the UK from overseas are not required to have all policies in place from day one, but often build them over time.

Employee benefits – what should I consider?

Before introducing, revising or removing a benefit, it is important for the Organisation to consider:

Why the organisation is introducing/offering the benefit.
How does it support the organisation’s business goals?
How does it reward the values and behaviours that the employer needs?

Mandatory Insurances & Benefits

Employers liability insurances is the absolute minimum if you have employees. For most UK businesses, it is a legal requirement and can lead to significant fines if the cover is inadequate. Further, it is a legal requirement to offer a compliant Workplace Pension scheme in the UK, with strict guidelines to follow.

Other than this, there are no other mandatory benefits in the UK unless you consider minimum sickness pay and paid holiday allowances.

What is Important to Employees Today?

Today’s and tomorrow’s workforce consist largely of millennials. These individuals generally value recognition for their work, growth opportunities, career training and development programmes, and self-improvement. Millennials are tech savvy – so access to benefit information around the clock is a definite plus. Personalised rewards and a wide range of different options are also important.

Work/life balance is important, so flexible schedules matter when choosing their employer. Of course, now with the recent pandemic and the many business that have trial run working from home successfully, it will be harder to refuse flexible working requests in the future. Therefore, businesses need to think about how to keep a ‘workable’ structure when considering work/life balance and communication challenges.

Apart from demographics, also consider other characteristics of our employees. If you are hiring salespeople, for example, they are likely to place more value on a good bonus or commission scheme rather than Private Medical Insurance or free food.

Q&A – Your Questions Answered About Benefits and Employment Law

After the presentation, Anna and Jacqui answered the attendees’ questions regarding benefits and employment law.

From an employee point of view, what is better – a variety of benefits, or a more tailored selection? According to Jacqui, it depends on the company’s lifecycle. Sometimes, you have a wish list of benefits but are not financially capable to support them, which might be the case for early stage SMEs. Consider employee benefit services such as Perkbox, which provides variety yet cost effectiveness. Some things like PMIs is a direct cost, but there are “softer” benefits such as office fruit which doesn’t necessarily have to be very costly but be of great value.