Research from recruitment specialist Michael Page found that 73% of British workers factor workplace benefits in their decision to turn down a job. From motivating your team, to retaining and attracting new talent, workplace benefits have the potential to play a big role in your business’ success.

Key findings from PageGroup study*

• 82% think businesses over-complicate workplace benefits
• 37% of respondents did not know what their benefits package comprised of before they accepted the job
• 65% were surprised to find a particular benefit was available only after working in a role for some time
• 85% said a flexible benefits package was desirable to them but only 20% were completely satisfied with their current package
• The most popular benefits were flexible working (71%) and the ability to work from home (55%)

* Survey conducted among 1,000 UK adults 18+ years

Employee health and wellbeing

Companies such as Airbnb that offer holiday allowances to employees, and Netflix, that doesn’t have prescribed time off policies for salaried employees, are a new breed of organisation pioneering benefit concepts that appeal to a new generation of job candidates. Rather than focusing on conventional monetary benefits, there is a clear trend towards providing employees with a better quality of life, both inside and outside of work.

Deloitte predicts that millennials will make up 75% of the global workforce by 2025, and much research suggests that their motivations and values are different from the baby boomers before them.

A recent study by Fit Small Business found that, while many businesses are introducing novel benefits geared towards ‘millennials’ such as free holidays and office dogs, 34% of those aged 18-34 stated that they actually see healthcare as the most important benefit that their employer can offer.

Not only are healthcare and wellbeing benefits now proving popular with the latest generation of workers, benefits related to wellbeing are becoming a strong tool to help businesses maximise their profits, with advantages including the retention of employees, increased productivity, and fewer workplace accidents.

The World Health Organisation compiled a list of the advantages of health promotion at work, which includes:

• Promoting a caring public image
• Improving staff morale
• Reducing staff turnover
• Lowering absenteeism
• Increasing productivity.

Common wellbeing initiatives offered by companies to their workers include stress management, weight loss support, and gym membership; all of which are proven to keep your team engaged with a belief in the organisation and a willingness to ‘go the extra mile’.

Wellbeing initiatives can be implemented based on business objectives, incorporated as flexible benefits that address particular HR concerns, or can be based on employee feedback. When benefits are driven by feedback, it can encourage increased engagement in wellbeing efforts.

Employee engagement is a critical part of a company’s success – the staff are the means by which the business plan is executed, and their engagement determines the company’s outcomes.

When employees are engaged with their job, they are connected with the company’s overall vision and see their role as integral to achieving the organisation’s aims. It is a positive emotional attachment to their work.

The Society for Human Resource Management (SHRM) has identified three parts to employee engagement:

• Physical – When they’re engaged with their job, employees go all-out to complete their work, using high levels of energy to fulfil tasks
• Emotional – Having an emotional connection to their work means employees are strongly involved in what they are doing, and have a sense of purpose. They are inspired and challenged by their job
• Cognitive – Employees are fully immersed in their work – and less likely to ‘drift off’ on the job.

When teams are engaged on each of these levels, they are more invested in their work. But according to Gallup, we are facing a worldwide engagement crisis that could have long-lasting effects on the global economy. Gallup’s research revealed that worldwide, 87% of employees are not engaged with their organisation. It also found that companies whose workforces are highly engaged outperform their competitors by a staggering 147% in earnings per share.

How to elevate your employees’ engagement levels

If your employees are not engaged, you could be putting yourself at a competitive disadvantage. Businesses that can improve engagement levels among staff stand to improve their profits, retain talent and gain customer loyalty. Here are some tips to help bring employees on board.

Empower staff

When your team feels empowered they will feel more engaged at work. According to the Advisory, Conciliation and Arbitration Service (Acas), good leadership should empower and motivate rather than control.

Embed company values

Another key ingredient is company values – these should be embedded throughout the organisation, and ‘lived on not just spoken’.

Promote positive relationships among colleagues

Bad blood among colleagues will most certainly result in a disengaged team. To create engagement, build a supportive environment in which employees help each other and treat each other with respect and integrity. Management can help promote this positive culture by focusing on the strengths of employees as a team, not praising individual performance.

Creating a culture of engagement

Engagement involves a cultural shift in the way organisations behave. It should be rooted into the business culture, rather than addressed annually, for instance when staff return an employee survey. Employee engagement should be at the forefront of every interaction between management and their teams.

Focus on strengths, not weaknesses

Research from Gallup shows that when management focuses on strengths rather than weaknesses, the result is greater engagement among staff. It found that employees learn their roles more quickly, produce more and significantly better work, and stay with their company longer. When managers support their employees’ growth and development by focusing on their strengths, team members are more than twice as likely to be engaged.

Shared goals

Employees are more engaged when they have a strong connection to shared goals, and an understanding of how their role fits in with the wider organisation. When staff are aligned with company objectives, they – and the company – are more likely to be successful.

Pietro Carmignani is UK country manager at Gympass. 

Further resources on employee engagement and wellbeing

• How to reinvigorate your workforce and make engagement a priority – Phil Sheridan, senior managing director of Robert Half UK, on the benefits of making employee engagement a priority
• New Engaged Employer Report Highlights Key Benefits for Attracting and Retaining Talent – This report from Moorepay is available to download
• How to improve employee motivation in the workplace – We chat to the business owners that managed to create a motivated and engaged workforce, and explore how you can recreate their success
• 6 ways to minimise work-related stress and health problems – Gemma Harding encourages business owners and managers to make the effort to help your employees towards better mental health

The post How to elevate employee engagement levels appeared first on Small Business UK.

Workplace surveillance is any form of employee monitoring undertaken by an employer. It includes time and attendance modules on HR or payroll systems, CCTV systems for security purposes, access to buildings or zones within a building and ongoing monitor of electronic systems such as computers, emails and search engines. Although surveillance methods have existed and been used for many years, monitoring has increased significantly as technology has developed.

During lockdown, when employees were suddenly working from home, employers increasingly asked their IT providers to assist with the monitoring of staff activity. For years, employers, despite the technical advances enabling employees to work from home, refused to allow them to do so. A multitude of excuses were provided, but at the heart of many of them was the issue of trust. How would I, as the employer, know that my staff were actually working and not catching up on their favourite daytime TV, or caring for their children?

As we are now in a post-Covid working environment and many employees have continued to work from home, the issue of surveillance moves from being a short-term worry, to a longer-term strategy. Questions arise regarding what is legal, what is ethical and what is effective people management practice?

‘Having to work with your camera on and your mic open all day everyday so your colleagues can see you would certainly be considered to be excessive’

One of the first notes of caution with any kind of surveillance is consistency.

You must have a documented policy which everyone is aware of, and which impacts all staff equally, regardless of whether they are homeworking or based in the office. Failure to do so could lead to claims of indirect discrimination. Do you have more women working from home then men? Do you have more older people working from home than working in the office? Do you have more disabled employees based at home rather than commuting to the office? While your policy and procedures around discrimination may not be intended to discriminate, without careful consideration of your particular workforce demographics, your policy may put you at risk of falling foul of equality legislation.

Top 10 HR tips – Donna Obstfeld of DOHR takes you step-by-step through the staff onboarding process and explains why, in today’s post-Covid workplace, regular HR appraisals feed in to communicating the company culture you want to promote

Is monitoring my homeworking staff legal?

Assuming you are not doing anything which can lead to a claim of discrimination, as outlined above, you can monitor your staff, but only to the point that it is reasonable to do so.

There is no single piece of legislation which gives you a yes/no answer to the question of whether you can monitor your staff while they are working from home; however, there are several laws which must be taken into consideration when writing your policy and implementing it.

• The General Data Protection Regulation (GDPR) is in place to protect personal data
• The Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 gives businesses the right to monitor communications on their own networks
• The Investigatory Powers Act 2016 addresses the interception of electronic data during transmission
• The European Convention on Human Rights protects an employee’s right to a family life
• The implied Term of Trust and Confidence (ITTC) which is implicit in a contract of employment

At the heart of whether your monitoring is legal are two key concepts:

Transparency

Are you being honest and open with your employees about the fact that you are monitoring your staff?

• What are you monitoring?
• How are you monitoring?
• What is being done with the information gathered?
• Who has access to it?
• Where it is being stored?
• And how long it will be stored for?

Proportionality

• What are you trying to achieve by monitoring your staff?
• How much information do you need?
• Is there a particular risk which has been identified?
• Are you using the information obtained from monitoring for training purposes?

Is monitoring homeworking staff an effective people management tool?

If used properly, monitoring can be used to measure employees’ inputs, outputs and behaviour to help them improve both individual and group performance. Companies may monitor company devices to ensure there is no breach of security, such as phishing emails, fraud or malware attacks.

In some cases, monitoring can be used to help prevent bullying and harassment, which saw a disappointing increase during lockdown as some staff were left isolated and exposed to inappropriate behaviour, without colleagues or managers to turn to.

Fire and rehire – what you need to know – Can you ‘fire and rehire’ your staff if they won’t accept a change to their contractual terms?

The results of monitoring can be used for disciplinary purposes where people are falling short of the standards set by the business or capability purposes when additional support mechanism can be put in place should the employee not be performing at the required level.

What is excessive monitoring?

It could be argued that due to remote working, evaluating performance and behaviour is more difficult for the employer. However, there are different monitoring styles, and while some are helpful to both parties, some can be regarded as excessive as they might be seen as compromising employee privacy. It is hard to imagine how monitoring keystrokes or taking screenshots at random intervals can give the employer an idea of how well the employee is performing.

Having to work on a live Teams call with your camera on and your mic open all day everyday so your colleagues can see you would certainly be considered to be excessive and demonstrate a lack of trust between employer and employee, but some employers have required this level of “engagement” from their home working staff. They argue that if the employee were in the office, then they would be visible and audible the whole time and therefore the same should apply when they are working from home. However, seeing into someone’s home could be considered an invasion of privacy.

Monitoring inputs can be misleading and inaccurate. They become about quantity, rather than quality. Focusing on outputs or deliverables should be far more useful for the employer and give them more meaningful information with which to make company decisions and provide support to their home working employees.

What’s the impact on staff if you monitor them?

While staff do not want to feel isolated, need to be part of a team to ensure effective working, and want to be seen and known to help their career development, they also want to be trusted and enabled to deliver in line with business requirements.

Trust and confidence are fundamental to monitoring your staff while they are working from home. Studies have reported a negative impact on psychological wellbeing and trust as a result of employee monitoring. This is due to decreased autonomy and can be regarded as a form of micromanaging, which can lead to increased exhaustion, lower levels of engagement and higher staff turnover.

How do I effectively support my staff without monitoring their every move?

 While you may continue to monitor for IT security purposes, scanning emails, websites and external drives, you may want to consider what additional monitoring you really need and how you might best achieve it. The easy response isn’t always the best response. Blanket monitoring with red-flag analysis may be cost effective and time efficient, but does little for morale, trust and long-term performance.

If you are concerned about an employee’s performance or productivity, consider handling it individually first. This might include checking in regularly with the employee, and/or setting clear SMART objectives, which you can review at different intervals. It would involve understanding what the causes of poor performance are and whether this is related to being a homeworker or something else.

Can I monitor my staff while they are homeworking?

It is legal to monitor your staff, but doing so as a responsible employer is essential.

A clear company policy which is properly communicated is essential. This can be achieved by stating the reasons for monitoring, what data will be monitored and how data will be processed, getting employees to explicitly agree to these terms (this is vital for transparency and fairness) and making sure it is used proportionately.

You should also have a grievance policy that enables employees to raise concerns and have them independently assessed.

It is important to keep all of your policies and procedures reviewed on an annual basis to ensure they are still compliant with employment legislation, case law and best practice.

Donna Obstfeld is founder and HR specialist at HR practice DOHR

More on managing staff

Managing health and safety in the workplace – What are your responsibilities as a small business owner when it comes to health and safety? Donna Obstfeld of DOHR explains

The post Can I monitor my staff while they are homeworking? appeared first on Small Business UK.

It’s vital to keep on top of legal developments that could affect our businesses, and a case heard in the Supreme Court last week should act as a wake-up call for many small firms.

The court ruled that thousands of police staff in Northern Ireland could reclaim up to 35 years’ worth of miscalculated holiday pay, landing forces with a potential bill of more than £40m.

This means that employees can now bring historical claims for underpayment, limited to two years in England but in Northern Ireland potentially reaching back to 1998.

Clearly, this has ramifications for employers, particularly owners of small businesses that could face difficulties from the potential burden of costly admin and claims.

So what did the judgement say?

The Supreme Court upheld a decision made at the Northern Ireland Court of Appeal in 2019, that police workers should have had holiday pay calculated according to their ‘normal’ pay – including regular payments for overtime, bonuses and commission – rather than their basic pay.

The Court also determined that a three-month gap or a lawful payment will no longer break the series of deductions. This ruling removes the limit on potential payment periods if a common reason for underpayments can be established.

What are the implications for employers?

Although the legislation about holiday pay calculation has been in place for some time, the conditions this case addresses are specific and widespread, and it is significant that it has taken litigation to reach this stage.

Employers most likely to be affected are those who run small businesses which operate commission schemes, overtime payments or perhaps bonus schemes. 

However, most SME owners should not panic. Tribunals are settled on a case by case basis and just because this ruling has gone one way, it doesn’t mean the law is settled for everyone.

Of course legal theory is one thing. Practice is another.

In my opinion, the trade-off between reclaiming historic pay entitlement and damaging workplace culture will prevent many employees from litigating, thanks to the strong relationships many staff have with their employers in the small business community.

When there is mutual respect, anything can be agreed, so I would advise both employers and employees to be considerate of each other’s position. 

However, where statutory rights are infringed the situation becomes more complex, as negotiations can only go so far.

There are also questions in the case about how claims were brought to the employer in the first place, for example regarding how historical employment claims for staff were dealt with before reaching litigation. There may also be considerations for people who have left the business but whose claim window of three months remains open.

How to calculate holiday pay

Calculating holiday entitlement which includes commission that varies from month to month can be challenging, but it’s essential to ensure that employees receive their fair entitlement. To handle this situation, you can use an average commission calculation method.

It’s important to keep accurate records of commission payments and communicate the holiday pay calculation method clearly to employees to maintain transparency and compliance with employment laws. Additionally, consider seeking professional advice to ensure your holiday pay calculations align with current regulations.

There are several steps to take in order to calculate holiday entitlement that includes variable monthly commission.

A reference period should be established, ideally 12 months or more. Collect your employee’s commission payments and calculate the total and average per month, following which the daily rate can be established.

Holiday pay including commission therefore equals basic pay plus daily commission rate for each day of the holiday period.

The same principles apply for bonuses, assuming they are paid with sufficient regularity.

Advice on how employers can move forward

Your employees may not be aware of this case and the legislation, or even be interested in pursuing a claim.

It is still worth knowing your company’s position to prepare for every eventuality. So, review your risks, and do some sums based on the past two years (assuming you’re in England). Then consider which of your employees have the longest length of service and highest commission and bonus rates and who are, therefore, the most likely to have a significant claim.

If you are liable, there are creative solutions to resolving gaps or compensation as long as they are fair and equitable for the employee. I suggest seeking advice on how this can be managed, as working with your finance and HR departments can help you manage the outlay without breaking the bank.

One pragmatic option could be to reduce other employment benefits – at least in the short term – if your budget for historical and future pay burdens is an issue. However you tackle the problem, consider this to be a line in the sand so you are on sure ground for the future.

Natasha Kearslake is director at Organic P&O Solutions, based in Reading

Further reading on holiday pay

What are the new rules on calculating holiday pay for seasonal workers? – The Harpur Trust v Brazel case has challenged the way that seasonal and part-year worker holiday pay is calculated. What should you do now?

Holiday pay for laid-off workers – If a member of staff has been made redundant, are they still entitled to their holiday pay?

Zero hours contracts holiday entitlement and holiday pay – How do you calculate holiday entitlement and pay of someone on a zero hours contract? We clear up the confusion and help you get it right

The post How a Supreme Court ruling on holiday pay could affect your business appeared first on Small Business UK.

UPDATED: Pensions auto enrolment (AE) was introduced by Government to help employees save in a tax efficient way for their retirement with the help of their employer and to reduce their reliance on the State Pension. Under AE legislation, employers have a legal obligation to automatically enrol eligible employees into a workplace pension scheme and pay contributions.

The questions businesses most need to consider are:

1. When do my pensions auto enrolment obligations begin and what do I need to do?

2. Which of my employees do I need to automatically enrol?

3. What contributions do I need to pay?

4. What if an employee doesn’t want to join the pension scheme?

5. What is the tax position on pension contributions?

6. What pension provider should I choose for my pension scheme?

7. Once I’ve set up a pension scheme and started assessing and auto enrolling employees, there’s nothing further to do, right?

When do my pensions auto enrolment obligations begin and what do I need to do?

If your company was in existence prior to 1 October 2017, you would have been given a ‘staging date’ by The Pensions Regulator. The staging date is the point at which you would have needed to start assessing your employees and auto enrolling eligible employees into a workplace pension scheme.

For companies that started on or after 1 October 2017, your pensions auto enrolment duties commence on the day that you hire your first member of staff. This is known as your ‘duties start date’.

AE rules can be complex but in summary, companies must:

• Have a pension scheme
• Regularly assess their workforce to determine their eligibility for auto enrolment
• Auto-enrol all eligible employees into a pension scheme and pay contributions
• Communicate with employees
• Re-enrol employees who have opted out every three years (known as triennial re-enrolment)
• Keep adequate records
• Complete a declaration of compliance with The Pensions Regulator

Which of my employees do I need to automatically enrol?

There are three types of employee for pension auto enrolment purposes, which are set out below:

Eligible jobholder – also known as a type 1 worker – Any employee who is aged between 22 and State Pension age and earns more than £10,000 per year must be auto-enrolled into a pension scheme. You have a legal obligation to pay at least a minimum level of contributions (detailed in the next section).

Non-eligible jobholder – also known as a type 2 worker – Any employee who earns more than £6,240 up to £10,000 per year, or any employee who earns more than £10,000 per year and is younger than 22 or older than State Pension Age, does not need to be automatically enrolled. However, they have a right to opt into your pension scheme and if they choose to do so, you must pay at least the minimum level of contributions, as you would for an eligible jobholder.

Entitled worker – also known as a type 2 worker – Any employee who earns less than £6,240 per year, regardless of age. They do not need to be automatically enrolled and they also have a right to opt into the pension scheme if they wish to do so. However, if they do choose to opt in there is no legal requirement for you as the company to pay any pension contributions.

Regardless of which category they fall into, all employees must receive written communications which sets out their rights under auto enrolment.

>See also: The Small Business guide to HR

What contributions do I need to pay?

The level of contributions will depend on how you calculate pensionable pay. The minimum requirement is for contributions to be paid on an employee’s earnings between £6,240 and £50,270 in the tax year 2023/24 (known as qualifying earnings). The current levels on this basis are set out below. 

If you calculate pension contributions on a different basis (e.g. if they are based on basic pay) the minimum contribution requirements will be different. Provided that you are paying at least the minimum level of contributions you have flexibility on the contribution levels. For example, some employers choose to pay more than the minimum employer contribution, which in turn can reduce the minimum contribution that the employee has to pay. However, you will have to provide a certificate confirming the basis of your scheme contributions and that they meet the minimum levels. This certificate will need to be renewed up to every 18 months.

What if an employee doesn’t want to join the pension scheme?

Employees have the right to opt out within 30 days of being auto enrolled and if they do so within this timescale, they are entitled to receive a refund on any employee contributions that were paid during that period. Employees can stop contributions at any time after this point, but they would not be entitled to a refund on previous contributions. Employees should also be clear that if they opt out then this will impact the payout they will have receive at retirement.

Employees can only opt out after they have been auto enrolled. If you have a new employee advise you that they don’t wish to join the pension scheme, they must still be auto enrolled and then can opt out after that point.

Employers are not allowed to encourage employees to opt out of the pension scheme and there are significant financial penalties for companies that are found to have done this.

What is the tax position on pensions auto enrolment contributions?

Employer pension contributions are an allowable expense and therefore can be offset against profits for corporation tax purposes.

Employee pension contributions qualify for tax relief and the manner in which tax relief is granted will depend on the type of arrangement offered by the pension provider. In summary, there are two arrangements:

Net pay arrangement: Contributions are deducted from gross pay, therefore individuals automatically receive their full tax relief up front.

Relief at source arrangement: Contributions are deducted from net pay, with the pension provider automatically adding tax relief of 20 per cent to the pension contribution. Higher rate taxpayers would need to claim any additional tax relief from HMRC.

Which pension provider should I choose for my pensions auto enrolment scheme?

There are a number of pension providers which offer workplace pension schemes that are suitable for auto enrolment. There are a range of factors to consider when choosing a pension provider. These include:

Charges – Charges will impact the value of your employee’s pension pots so it is important that you consider the charging structure operated by your provider. All providers will charge an annual fee which is usually expressed as a percentage of the individual’s pension value (commonly referred to as an annual management charge). This charge is paid by the individual members and is deducted by the pension provider. In addition, some providers will also charge employers either an up-front or ongoing fee to operate the pension scheme.

When considering charges, you should take into account the support and range of services you receive. Cheapest is not necessarily best.

Service – Will your chosen pension provider be able to provide a good level of service, both to you as the employer and your employees? Poor administration can lead to complaints from employees and additional work for you as you spend time resolving issues with the provider.

Investment options – All pension contributions are invested into a default investment fund, unless an individual opts to select their own funds from the range offered by the pension provider. You should ask your provider what the objective of the default investment option is.

Communications support – You are required to issue communications to employees with regards to auto enrolment. In most cases, these communications tend to be issued by the pension provider however you should make sure that your pension provider can and will do this. Even where the provider issues the communications, it is ultimately your responsibility as the employer to ensure that that the communications are sent, contain the necessary wording and are issued within the required timescales.

Once I’ve set up a pension scheme and started assessing and auto enrolling employees, there’s nothing further to do, right?

Wrong! Auto enrolment is an ongoing process, so it is important that you factor this into your regular business processes.

You should review your pension provider on a regular basis to ensure they are continuing to meet you and your employees’ needs. You are able to switch your pension provider should you wish to do so. This should be completed as part of an annual governance review that will also ensure your auto enrolment processes and records continue to be compliant on an ongoing basis.

Auto enrolment can be complex. Fortunately, there are lots of places you can obtain support. The Pensions Regulator website contains useful information on auto enrolment and your payroll provider, if you use one, should be well-versed in auto enrolment. Employee benefit consultants can provide ongoing advice and support with regards to auto enrolment and helping you to choose and review your pension provider.

Finally, remember that while employers have certain obligations under auto enrolment, if you are focused on doing this properly you can use your workplace pension scheme as a valuable tool to help recruit and retain the best employees for your business.

James Brown is employee benefits consultant at IFAs Chase de Vere.

More on pensions

Pensions savings – which option is right for you? – In this piece, Chris Kelly shares a helpful guide to your pension options and how to maximise your savings

The post Pensions auto enrolment guide for employers appeared first on Small Business UK.

For significant business success, you generally can’t go it alone. You need advisors, mentors, customers, suppliers and often, staff. However, a lot of business owners are terrified of taking on employees because of the additional challenges which they bring.

At the end of the day, there is nothing which stops an employee bringing an employment tribunal against you, so you have to approach life as an employer with the view that you will always do the right thing and give yourself the best possible chance of winning in an employment tribunal should you be unfortunate enough to end up in one.

However, by doing the right thing – and looking after the needs of you, your business and your staff – you will end up with a more successful business.

So, what exactly are the HR challenges keeping employers up at night at the moment?

#1 Recruitment

Attracting and hiring the right people has always been difficult, but since Brexit and Covid, many businesses are finding this even more of a struggle. As a small business owner, you often need to compete with larger companies for top talent, so you need to think differently. There are several approaches you can take but one which many companies are now using is to hire for attitude and train in the skills you need. As long as you don’t need specific qualifications from day one, find the people who buy into what it is you do and have the ability to learn and train them up.

#2 Retention

Once great employees are onboarded, retaining them is your next challenge. People need good salaries which they can afford to live on. Beyond that, how you treat them, manage them, recognise them and reward them is what will make them chose to stay. Get this right and your retention will significantly increase. People don’t leave bad companies; they leave bad bosses.

#3 Compliance with employment laws

Small business owners often lack the time or expertise to fully understand complex employment laws and regulations. This can lead to costly mistakes or legal issues.

Making sure you have good quality HR advice which is specific to your company is essential. Off-the-shelf documentation, policies and procedures are never going to be right for your business because they won’t reflect your goals, values and culture. They will give you the minimum legal requirements. To enable you to recruit and retain the right people, you need your policies and procedures to support you.

To ensure you become and remain compliant with the ever-changing employment legislation, case law and best practice, make sure you have the best possible HR advisor supporting you and your business and let them do the heavy lifting on this one.

4. Employee development

Small businesses may struggle to provide their employees with development opportunities and career progression paths, which can impact employee satisfaction and retention.

There are a few ways you can combat this:

• The first is to actively engage with your employees about what they want and continue to stretch them within the business
• Plan your business growth in advance and ensure that if someone leaves, there is someone internally you can promote and develop – don’t block career paths
• Offer external training courses and opportunities and ensure that you enable them to bring those skills back into the business

#5 Managing employee performance

Small businesses often lack formal processes for managing and improving employee performance. Business owners and employees can get frustrated if the employee is not delivering, but the business owner has not set expectations.

While an annual appraisal process may be too big and clunky, you should create time on a monthly or quarterly basis to step off the rat wheel and discuss goals, objectives, issues and opportunities. Try to keep away from going through the ‘to do’ list. Focus on the bigger items which will really move the business forward.

#6 Equality, diversity and inclusion

Promoting a diverse and inclusive workplace can be challenging for small businesses, especially if they lack the resources to implement robust diversity initiatives or they have such small numbers of employees.

Being able to embed a philosophy of EDI in your workplace may be just what your business needs to tap into an additional pool of talent for recruitment purposes, to ensure loyalty for retention purposes and give you opportunities to develop staff to their maximum potential.

Don’t be scared of EDI. How can you fully embrace it and make it work for you, your business and your staff?

#7 Employee engagement

Employee engagement is different from motivation. It is defined as the extent to which employees invest their cognitive, emotional and behavioral energies toward positive organisational outcomes. An employee may be motivated to come to work for pay, but to actually be engaged they need to be truly invested in the business.

Maintaining high levels of employee engagement can be difficult, particularly when resources are stretched thin. However, being small also gives you opportunities to increase employee engagement if you do the right thing by your staff and take them on your business journey with you.

#8 Adapting to remote/flexible/hybrid working

The Covid-19 pandemic has led many businesses to adopt remote work, which can present a range of HR challenges, from maintaining productivity and communication to supporting employee wellbeing.

For some businesses the change was permanent, but for others it was only ever temporary. However, many business owners are now struggling to get their staff back into the workplace. As a business owner you need to take an objective look at what your business needs and how it can be achieved. Would flexible or hybrid working be effective? Would it enable you to recruit and retain the right people? Would it increase employee engagement and thus productivity? For some the answer is no, but for some, the answer may be yes.

If you are changing working conditions such as place of work, remember this is a contractual change and needs to be discussed, agreed and documented.

#9 Health and safety

Ensuring the health and safety of employees is a crucial concern for small businesses.

Employers of all sizes have a legal duty to ensure a healthy and safe working environment. This is both physical and psychological health and safety. This also extends to any time the employee is taking part in an activity because of their employment. This could be an external training course, a fundraising event, a networking event or a drink down the pub after work.

The duties on employers extend beyond the normal working week in the office and now include the prevention of harassment and specifically sexual harassment.
Employers must ensure that they take all reasonable measures to protect their employees, and this can be done through appropriate policies, procedures, training and communication.

#10 Balancing HR and business needs

As small businesses grow, the demand for HR-related tasks increases, but there may not be sufficient resources to hire a dedicated HR professional. This can lead to the owner or other employees being stretched thin trying to manage HR tasks on top of their regular duties.

An HR system is a great place to start. There are hundreds of systems around today and some of them are easy to use, affordable and very time efficient, enabling you to comply with your legal obligations as well as manage your staff effectively.

Another option is to use an HR consultant as and when you need them. Just like engaging with any other supplier for your business, make sure they are experienced, qualified and really get you and your business. Set clear expectations and manage them as you would the rest of your employees. They are there to enable you and make your business go faster. They should never say “No”, or just “Let’s do it this way”. Your approach to risk will be important too and make sure you are working with someone who understands that.

Further reading on HR

• The Small Business guide to HR – To be ready for any HR surprises the business world throws your way, keep the advice in this guide within easy reach
• A guide to outsourcing HR – Outsourcing HR makes sense for businesses that are too small to have their own in-house manager. However, you need to be clear about what you need from the outset to avoid a one-size-fits-all approach
• Small business managers consumed by HR functions – Business decision makers within SMEs are spending up to ten hours a week on hiring and related activities, on top of the demands of their own job role, research finds

The post The ten most common HR challenges for small businesses appeared first on Small Business UK.

UK employers are legally bound to provide a written statement of terms and conditions, laying out the basic terms of the engagement, to each employee by the first day of employment.

Within two months after the start of employment, employers must provide a wider written statement or contract of employment which outlines policies on training, pension rights and disciplinary and grievance procedures.

Once you have first established the person’s employment status – whether they are an employee or a worker – we would recommend a proper contract from day one rather than two separate documents. This allows employers to stipulate terms to cover important areas such as data protection, confidentiality, reference requirements and the like.

‘We recommend that employers provide the widest-ranging contract as early as possible during the engagement’

We advise our clients that it is good business practice to do this from the beginning of employment, not only because it creates a culture of rigour and trust, but also because it saves time in the long run by avoiding the need to issue a wider statement or contract later on.

How to best manage inductions for hybrid staff – How should small businesses best manage inductions into office culture for new hybrid staff? Sue Temelty of The HR Dept offers practical advice

What the employment contract must include

As an employer, the principal employment statement must include at least the following details:

• the names of the employer and the employee or worker, including addresses
• the title of the job in question and a description of the work to be done, with any other expected or potential duties, to allow for some flexibility
• the date when the engagement starts
• how much and how often an employee or worker will get paid, before tax and national insurance, as well as the expected date of payment
• working hours, including any potential variation such as Sundays, night shifts or overtime
• holidays, detailing days per year that they are entitled to (pro rata if the employee is working part-time) on a set annual period and including information about rolling holiday over
• location, as well as any potential for relocation to give extra flexibility to the employer
• expected duration for the job, including the end-date if the engagement is on a fixed-term contract
• any probationary period, which gives employers or employees the option to terminate the engagement at short notice during the early days or the employment
• details about benefits the employee can expect, such as childcare vouchers or lunch being included
• training that is obligatory for proper performance of the role, and whether or not this is paid for by the employer
• sick pay and procedures around it, in terms of requirement for a doctor’s certificate and the payment the employee will receive
• other paid leave such as maternity or paternity leave
• notice periods – the amount of time both the employer and the employee will be asked to provide before termination of the engagement, as well as information about any actions which could constitute gross misconduct, and which could lead to dismissal without notice.

What do statutory pay rises mean for SMEs? – Sue Tumelty, founder of The HR Dept, explains upcoming statutory pay rises and what you should do as a small business owner

Employment contract for staff working abroad

There are also some details which employers must include if the employee or worker will be required to work outside the UK for more than a month.

These are:

• the amount of time that they will need to be abroad for
• the currency in which they are going to be paid
• any additional pay or benefits that they will receive
• terms regarding their return to the UK

Regarding all of this information, it is up to the employer to choose whether they include this it in the principal statement or as part of a separate document. If they choose the latter, then the employee or worker must have reasonable access to it, such as via the employer’s intranet.

The wider written statement

As mentioned earlier, we recommend that employers provide the widest-ranging contract as early as possible during the engagement, in order to provide clarity regarding the relationship and to minimise risk of exposure to unfair dismissal claims which are detrimental to both parties.

If, however, you choose to provide the wider statement at the two-month limit, this document must also include information regarding:

• the employee’s rights to your company pensions and pension schemes
• any rights to collective agreements where employee representatives can negotiate for terms and conditions on their behalf
• any other right to non-compulsory training provided by the employer
• details regarding disciplinary and grievance procedures

We would also recommend that contracts of employment are considered carefully so that they reflect the particular circumstances of the business in question. Professional advice may pay dividends here.

Sue Tumelty is founder and executive director of The HR Dept

More on employment law

Employment law changes in 2023 – Changes to holiday entitlement for zero-hours workers, higher Minimum Wage pay and a bonfire of EU regulation are all on the cards this year

The post How to draw up an employment contract appeared first on Small Business UK.

The UK government doesn’t have an official definition of ‘anti-social’ or ‘unsocial’ hours, but unsocial hours payments can be defined as the increased hourly pay rates of workers who are employed to work hours or shifts which can be viewed to be unsocial, such as night shifts or weekend shifts; think overnight working or those who have to work on rotas that may include very early mornings or late evenings.

So what are the legal rules on working unsociable hours?

The only legal requirement is that employers pay the National Minimum Wage, but there is no legal entitlement for employers to offer increased pay for working unsociable hours.

The national minimum wage as of April 2023 is:

• 23 and over (National Living Wage) – £10.42
• 21 to 22 year olds – £10.18
• 18 to 20 year olds – £7.49
• 16 to 17 year olds – £5.28
• Apprentice – £5.28

But what about younger workers?

Staff aged 16 or 17 cannot work between midnight and 4am.

They usually can’t work between 10pm and 6am (this can be changed to not working between 11pm and 7am, by contract) but there are exceptions if they work in:

• Agriculture
• Cultural, sporting, artistic or advertising activities
• A hospital
• A hotel or catering
• Retail
• Post or newspaper delivery

In exceptional circumstances they can work at night if there’s no adult to do the work and they’re needed to either:

• Handle a sudden increase in demand
• Maintain the continuity of a service or production, e.g. filming

The employer must give the young person a rest period of the same length as the extended shift.

Shift allowance law

Additional rules apply to night workers on top of the rules on maximum weekly working hours and rest breaks.

Night workers must not work more than an average of 8 hours in a 24-hour period. The average is usually calculated over 17 weeks, but it can be over a longer period (of up to 52 weeks) by agreement between employer and employee). Regular overtime is included in this average, but not occasional overtime. Full details on night working hours and sleep-in shifts here.

But that’s not fair, surely I should get paid for working those kind of hours?

This will come as a surprise for many and I am sure more for the employee themselves.

However certain industries which require a 24-hour, around-the-clock working pattern, seven-day-a-week service will commonly offer these additional payments to staff because they require a number of members of staff at all times regardless of how difficult these shifts are to fill.

For example, the NHS does have a payment structure for ‘unsocial hours’. Their contracts of employment offer ‘Time plus a percentage’ based on their core pay bands. The same sort of deal can often be found in private companies, but the key is the contract of employment. If there is no mention of additional payments in the contract then, as stated before, there is no legal requirement to do so.

Remember, the decision on determining the rate of pay is one to be made by the business and of course will take into account individual business needs.

Where is the good news?

If an employee is working under a contract of employment which includes unsocial hour’s payments, they will gain a contractual right to the additional pay when they are working the allocated ‘unsocial shifts’.

Clearly any failure to meet this contractual right will result in a breach of contract, a situation from which an employee can resign and claim constructive dismissal at an employment tribunal.

Employers are also be obliged to pay the additional money to part-time workers working the shifts as they cannot be treated less favourably; this goes for most part-time rights.

Tips for managing staff who work unsociable hours

Christian Brøndum, CEO of Planday, discusses how best to organise your employees’ shifts during unsociable hours.

In a world where increasingly even the smallest businesses operate on a 24-hour schedule, employers not only have an obligation to meet the demands of the business world; they also owe it to their employees to find the most beneficial way to carry out their work. Here are some tips on how to best organise your employees’ shifts during unsociable hours.

Plan ahead

This is a measure which helps both you and your employees. With regard to your employees, planning their shifts well in advance and letting them know exactly when their shifts will take place allows them to do as much as possible to take care of everything going on in their lives, meaning they’ll be more organised at work and much more productive. And obviously, productive employees lead to happy employers. By planning shifts and rotas well in advance, you avoid as many unpleasant surprises as possible whilst also helping your employees. They might work for you, but you have to work with them.

“When you’re only at work for short periods of time it’s important to boost productivity when you can”

Be flexible

Multiple studies have found that one of the negative effects of shift work is increased levels of stress in the worker. If a work schedule is inflexible and a worker has less control over their shifts, then this stress is likely to be much greater than in the average shift worker. To counteract this, it’s advisable to allow your employees some say in when they work. It’s important that you’re open to, but in control of, shift swapping as well. By using shift management software such as Planday, you can strike the right balance between strict planning and flexibility, as rotas are easy to change while cloud-based technology keeps both employer and employee updated of any changes.

Encourage breaks

Ensuring that your employees take regular breaks may sound like wasted time and money when dealing with shift workers, but it would be foolish to forget that breaks in the work day often boost productivity. Workers who take a short break every hour performed better than workers who did not. Shift workers can benefit hugely from these. When you’re only at work for short periods of time it’s important to boost productivity when you can. If you schedule in regular breaks and remain clear with your employees on when they can take, you win back more time than you waste.

You don’t have to be Elon Musk to be effective and working hard can sometimes mean you’re not working well. Business-owners everywhere need to work with their employees to find the best ways for them to work.

Further reading on employee work and pay rules

• Shift Allowance in the UK – What is it and how does it work?
• Working Time Regulations UK – Guide to 48 Hour Week Laws
• How your business can master employee contracts
• What is the legal number of hours employees can have between shifts?

The post Do I need to pay more to staff who work unsociable hours? appeared first on Small Business UK.

Business guru Peter Drucker once said: “Do what you do best and outsource the rest”. Wise man. For most SMEs it makes sense to buy in some services on as “as required” basis, and HR consultancy is a prime example of where you need some help sometimes.

Most small businesses are really microbusinesses too small to have an inhouse HR manager. Possibly a staff member with some HR experience has been seconded to the role. But employment law changes so rapidly and you could unwittingly be leaving yourself open to legal action by a disgruntled employee, if you don’t exactly follow HR procedure.

Or it may be that you yourself, as owner-director, handle all your own recruitment – taking precious time away from what you do best: running your business. A 2022 study by NatWest found that 95 per cent of small businesses have struggled when recruiting staff members.

‘Some companies require you to sign up for five years … some prisons are easier to escape from’

Outsourcing to an HR consultancy makes sense for an SME too small to have its own inhouse manager.

Like everything else you buy, the service needs to work well and efficiently for you. If not, at best all it does is cost you money but not much else. At worst, it weakens your situation and may even expose you to risk.

To ensure that your outsourced HR provider enhances the health and wealth of your company (and yours come to that), avoid the following five mistakes.

#1 – Poor quality service

One of the main mistakes is not ensuring that you get really high-quality service. Some outsourced HR companies take a one-size-fits-all approach.

Whenever we inherit another client from one of these companies, I could tell you exactly which one it was by looking at the paperwork. Handbooks, terms of employment etc all identical. All they do is change the client name.

A good HR company will take the time to understand your specific business and what you want to achieve. However, you need to be clear about your business needs from the outset, to avoid a one-size-fits-all approach. Satisfy yourself that its consultants are practical and business-driven; that they can respond quickly. Make sure you know that your outsourced partner will take time to understand your requirements.

A guide to HR outsourcing for small business – Outsourcing HR makes sense for businesses that are too small to have their own inhouse manager. However you need to be clear about what you need from the outset to avoid a one-size-fits-all approach

#2 – Lack of flexibility

Will your HR provider give you the flexibility you need? If you want help with a tricky situation, you want the comfort of someone who will come to site to support you. If you sign up with a provider that only offers phone advice, you’ll have to pay twice to get someone else to visit you in person. Do they think out of the box when it comes to solving your issues?

#3 – Poor quality HR advice

Too much HR advice is correct but flabby. In my view, the overly cautious style of advice generates more problems than it solves. You want to know what you can do, not what you can’t do. To avoid mistakes, insist on a provider with a very practical approach.

Find out whether the consultants have the skillsets to meet your requirements and that their knowledge is current (employment law changes furiously quickly). As part of this, investigate the skills and capabilities of the advisors. How well are they qualified? How do they keep up to date? Test them a bit.

#4 – Long contracts

Some companies require you to sign up for five years and give six months’ notice by a particular date to terminate the contract. Some prisons are easier to escape from. You should be able to walk away if things don’t work out, rather than stay chained to an unwanted provider and/or paying twice to end the agreement.

#5 – Unnecessary insurance cover

It’s tempting to go for a company that has an insurance hedge against tribunals. Except that all the advice given is then likely to be in the interests of the SME HR consultancy avoiding tribunal claims, rather than protecting your business. Don’t underestimate the frustration that you can suffer when you just want to bring a protracted process to a conclusion and your advisor says that you need yet another medical report.

Do you really need separate insurance? Probably not. A good quality provider will give you advice that limits your risk and if you check your business insurance, you may well find that legal costs are already included in that. Why have to pay twice?

Getting HR consultancy for SMEs right

The key things you will be looking for are that advice and support given is expert, practical and delivered on time. It’s important to explore if these two businesses – your SME and the HR consultancy — can work successfully with each other.

Ask the following questions before reaching your decision:

• The best route is recommendation. Ask your business friends and colleagues if they can recommend anyone from their own experience
• Ask them for a demonstration of their advice. Seeing is believing
• What is their client retention rate?
• How does the service work? What does it include?
• Will the prospective provider educate your managers? How? How often?
• Do they have a guarantee of satisfaction?
• What hours/days will they be available by phone, e-mail, or instant chat? What is their standard for returning phone calls?
• What options will you have for reaching them in emergency situations?
• Have they got enough resource to meet your needs?
• What are the qualifications and experience of personnel who are involved in providing this support?
• What makes them better than other outsourced HR companies?
• What is their track record on tribunal cases?
• What are their cancellation terms?

Kate Russell is founder of Russell HR Consulting

More on small business HR

Five areas of UK employment law businesses must be aware of – Before taking on any employees, it’s important to grasp the basics of employment law. In this piece, we look at what you need to know

The post Five reasons SMEs waste money on HR appeared first on Small Business UK.

Before taking on any employees, it’s important to grasp the basics of UK employment law. Otherwise, you could become unstuck. Here are some of the things you need to know.

Employment contracts

There is no legal requirement under UK employment law to provide a written employment contract but it is advisable to have one so the terms of employment are recorded.

Employees are legally entitled to a written statement of the main terms and conditions of employment if their employment contract lasts at least one month or more. The employer must provide the written statement within two calendar months of the employee starting work. The written statement must include a number of details including, among other things, the name of the employer, the employee’s name, job title and start date, the amount of pay and timing, hours of work, holiday entitlement, flexible working policy, notice periods and place of work.

Six HR mistakes start-ups make and how to avoid them – Making staffing mistakes as a small business on a tight budget can be fatal. Here are the common ones and how not to fall foul of them

Protecting the interests of the business

Businesses need to think about protecting their interests such as confidentiality, client connections, staff, suppliers and intellectual property. Any relevant provisions should be included in the employment contract.

Depending on the circumstances it may, in certain cases, for example, be appropriate to include clauses preventing employees for a certain period on leaving from competing, soliciting or dealing with clients or poaching staff. Any post-termination restriction must, however, go no further than is reasonably necessary to protect the legitimate interests of the business and each case will be different.

As part of the Government’s Smarter regulation to grow the economy policy paper, the Government has proposed to limit the length of any non-compete clause to three months. The change would allow employees greater flexibility to join a competitor or set up a rival business after they have left their employer. Employers may have to consider other ways to protect their business.

A guide to HR outsourcing for small business – Outsourcing HR makes sense for businesses that are too small to have their own inhouse manager. However you need to be clear about what you need from the outset to avoid a one-size-fits-all approach

Unfair dismissal

Generally, an employee must have at least two years’ service to bring an unfair dismissal claim. Therefore employers do have more leeway to dismiss difficult employees prior to an employee reaching two years’ service. Usually, employers would only have to provide notice.

There are some claims that employees could bring without a continuous service requirement such as whistleblowing or discrimination. It’s therefore advisable to follow some form of process in all dismissal cases.

Also beware that an employee can take the minimum statutory notice into account in calculating two years’ service – which is one week for continuous employment less than two years but more than a month.

After two years’ service employees have general unfair dismissal rights and employers have to tread more carefully. Employers can only dismiss for a fair reason, such as for example, redundancy, performance or misconduct. The employer must also follow a fair procedure. The procedure to be followed will depend on the reason for the dismissal and the circumstances of the case.

Similarly after two years’ service, if an employer breaches a fundamental term of the employment contract, such as a pay term or the implied term of trust and confidence, providing the employee resigns swiftly as a result of the breach, the employee could claim constructive unfair dismissal.

Discrimination

It’s against the law to discriminate directly against a job applicant or employee because of the following protected characteristics: age, being or becoming a transsexual person, being pregnant or on maternity leave, being married or in a civil partnership, disability, race including colour, nationality, ethnic or national origin, sex, sexual orientation and religion, belief or lack of religion/belief. There is also protection from discrimination for being associated with someone who has a protected characteristic or for complaining about discrimination. There are other types of discrimination, too, such as harassment relating to a protected charaterstic.

Personal data

Employers need to be aware of their obligations under the General Data Protection Regulations (GDPR), which came into force on 25 May 2018. Personal data must, for instance, be processed lawfully, fairly and in a transparent manner. This includes employers being required to provide detailed information to their employees about processing of personal data.

Other aspects of UK employment law could be applicable to your business, too. Areas could include business transfers, whistleblowing and monitoring to name but a few.

This article is intended for guidance only and should not be relied upon for specific advice

Matt Gingell is managing partner of Lombards

More on small business HR

How to best manage inductions for hybrid staff – How should small businesses best manage inductions into office culture for new hybrid staff? Sue Temelty of The HR Dept offers practical advice

The post Five areas of UK employment law businesses must be aware of appeared first on Small Business UK.

If you are just starting out as a business, one of the first challenges that you are going to face relates to the staff that you hire. With few employees, the people in your business make a huge difference to your success so it is something that you need to get right. So, here are six HR mistakes that small businesses and start-ups make and how you can avoid them.

Not investing in a staff management system

One of the major HR mistakes that small businesses make is that it takes them too long to invest in proper staff management software. It is something that you can easily overlook, but a staff management system is enormously valuable. It can give you the ability to manage holiday requests and other time off, as well as planning shifts, keeping track of the hours that employees work and providing information on their availability.

A good staff management system – like the work schedule function of Planday allows you to keep track of the admin side of the business for all of your employees as well as creating working schedules for them. This can make such a huge difference both to employee and employer, cutting down on stress and ensuring that work is carried out on time and hours are not wasted.

It might seem like an unnecessary expense, but a staff management system is undoubtedly something that you will need, so it makes sense to invest in it as soon as possible so that you can reap the associated benefits from it.

Disregarding laws and regulations

Too many start-ups and small businesses find themselves in a position where they contravene the law, and it’s usually not their fault. Despite the best intentions of employers, they can do things that seem fine but simply are not. Sometimes it can be easy to assume that you are doing the right thing by following your own ethics and business knowledge, but you need to be aware of your responsibilities with regard to employment law.

Employment law can be complicated but it is up to you to make sure that you understand it and can follow it. Issues such as acceptable working hours, overtime and more have very specific laws and regulations, and failing to follow them is against the law. If you are in any doubt you should speak to a specialist in employment law.

>See also: Employment law changes in 2023 – Changes to holiday entitlement for zero-hours workers, higher Minimum Wage pay and a bonfire of EU regulation are all on the cards this year

Assuming they don’t need to offer perks

Some employers assume that when they come to hire staff that they don’t need to offer perks and benefits because they are a small business. It’s vital to remember that you need to offer benefits packages that are competitive with other employers in the market. Do some research into what similar businesses offer their staff so that you can understand what is most appropriate for your company.

Failing to offer good benefits and perks can lead to staff being poached by your competitors, and you really can’t afford to lose high-quality talent.

Neglecting their onboarding process

In an age where hybrid working is more common, it’s especially important to get your onboarding procedure spot-on. This will result in happier staff and a higher chance of retaining them.  

Basics like having your new employee’s work set out for them and their tech up and running is a must. Try and sort out some meetings so that they can get on and start building relationships with other team members. Even setting up an event or get-together around their start date can be beneficial. Above all, be supportive and visible to your staff, whether they’re online or in-person.

Once they’ve settled in, ask for feedback from new starters so that you can continually develop your onboarding process.

>See also: How to best manage inductions for hybrid staff – How should small businesses best manage inductions into office culture for new hybrid staff? Sue Temelty of The HR Dept offers practical advice

Ignoring employee development

You might want to focus constantly on the present of the business, but it’s important to realise that many employees are more interested in the future. Looking to the long-term, you need to have a plan in place for employee development. Failing to offer any kind of progression or training to staff can be enough to make them reconsider their position and look to move on from you to further their career.

It’s up to businesses to recognise that their staff can develop and improve, and that this can be enormously beneficial to the company.

Being afraid to fire if it doesn’t work out

Tomas Ondrejka, co-founder of Kickresume says, “Everybody makes mistakes sometimes. Even if you feel good about it at first, it’s impossible to know for sure whether your latest hire will work out. In case it turns out to be damaging to your business, don’t hesitate to act quickly.

“Remember, big corporations might be able to carry dead weight and survive. Startups can’t. This is not to say that you should always look for reasons to fire people. No, that would be detrimental to your employees as well as your business. Still, warning bells are usually loud enough for anyone to notice. Just don’t try to ignore them.

“Sure, it won’t be pleasant and it won’t be easy. But all parties will benefit in the long run.”

Related: A guide to outsourcing HR – Outsourcing HR makes sense for businesses that are too small to have their own inhouse manager. However you need to be clear about what you need from the outset to avoid a one-size-fits-all approach

7 HR software tools ideal for small business – Streamlining your HR functions is key to running an efficient business. Here are seven HR software tools that can help you do just that

Small business HR checklist – HR can feel like a huge investment sometimes. Alongside all the money you’re already spending on rent, wages and other expenses, it’s easy to see it as just another strain on your cash. And when you don’t have any HR expertise in-house either, it’s a challenge to even get started

The post Six HR mistakes start-ups make and how to avoid them appeared first on Small Business UK.

Steven Bartlett has shared his top-five tips four building a winning team.  

Speaking at YuLife’s offices in central London, the Dragons’ Den star spoke to a small audience in the insurance start-up’s colourful offices, accompanied by a stand-in for his recently advertised around-the-clock videographer, filming for an upcoming fly-on-the-wall TV show about the investor’s life. 

See also: Green business tips from Deborah Meaden

Steven Bartlett on how to build a winning team

Here are the key takeaways from the social media entrepreneur and angel investor’s talk.  

#1 – Implement the right culture early on

By definition, “company” is a group of people, and Bartlett believes the job of a CEO or founder is to assemble the best group of people and bind them with a culture which he says “makes one plus one equal three”.  

“I appoint a CEO, create the culture and the vision, then try and get the values and culture right so we can achieve the objectives,” he says.  

The first 10 people in the organisation are key, he believes, as they will have an effect on the company’s culture thereafter.

‘My number-one job is not sales; it’s getting this group of people to behave in the right way’ 

Steven Bartlett talking at YuLife

“I think it’s the most important thing, especially at the beginning because the first 10 people – each one of them represents 10 per cent of your company culture … one bad apple can spoil the bunch.” 

Because people tend to hire people like themselves, the next 90 people hired in the company will resemble that first 10, he explains.  

“It’s really hard to unpick or undo that [culture] when you’re at 100 or 200 people. 

“You should be able to say, ‘That is an x company person’. It should be so unbelievably clear: the vernacular, the way they speak, the way they conduct themselves, how nice they are to each other. There should be an element of them feeling like disciples of the company. If the culture is strong at that point, the new people become the culture. If it’s weak, the culture becomes more like the new people.  

“I can pinpoint certain members of our team where I think, if the culture wasn’t so strong, they’d probably behave like someone else. But because the culture is so strong here, there is no chance they could possibly behave in any other way than as we behave as a unit. That kindness, selflessness and going above and beyond when we need to.

“My number-one job is not sales; it’s getting this group of people to behave in the right way.” 

#2 – Know when to get out the way

You need different people at different stages of a business’s life, Bartlett argues.  

At the first stage (what he calls the cult stage), you’re looking for people who are all in. The growth and enterprise phases after this are difficult, however, and require more experienced heads.  

“The people at the first stage are not necessarily the people you want in the enterprise stage,” he says.

“I respect CEOs like Ben Francis at Gymshark who was in that cult phase… and when the company grew, he was like ‘I’m getting out the way – I’m going to appoint a CEO who has done this before’. He worked in the business for six years in every department and after six years he said, ‘I’m ready now to be the CEO’.

“I always say this to founders: ‘Your business is going like this now, what do you care about more? Is it the ego and the title or is it being successful?’ Are you willing to get out the way of the success you’ve made?’”

#3 – Avoid conflict through open communication

“Communication seems to be the way to avoid conflict. Having systems in place to have frequent and reliable outlets to communicate is super important,” Bartlett says. “We need to have systems in place for continual course correction.”

Bartlett recounted the time one of his businesses had a suggestion box for feedback. “It was just people roasting the CEO,” he says. In order to be more constructive, he researched the Kaizen philosophy – the process of continual improvement – used by companies such as Toyota.

“They don’t just rely on feedback coming from the very top of the organisation,” he says. “They’ve created a system where the person on the production line has an outlet and a system that allows them to point out feedback that needs to be implemented.

“There are small things people see but they’re not empowered to or don’t have an outlet to [voice them]. In the Kaizen philosophy, you have to see the suggestion through by yourself. You have to [carry out the suggestion yourself], with support of your Kaizen coach, so suggestions become constructive.”

#4 – Don’t be scared to fire (at the right time)

“You’re fired” is a phrase the Dragons’ Den investor may be saying a lot more of, if rumours that he will replace Lord Alan Sugar at the head of the boardroom on The Apprentice are to be believed.

But Bartlett recounted a time early in his career when he knew “deep in my gut” that a recruit wasn’t the right fit for the company but held on to them anyway. “I made a mistake,” he says. “I knew, but instead of firing I made him the MD in another country.”

“I was a coward, and I paid the price for that. I paid for it in every way: it had a huge impact on our financial performance [and] on team members’ satisfaction and happiness. What I should have done was had the uncomfortable conversation sooner. If you don’t address it, it just grows and the collateral damage increases. Now, once I’m sure on something, the speed in which I address it is the most important thing.

“It’s ok to be wrong in hiring, everyone is,” he says. “I’m going to get it wrong; I’ve accepted that. Once I get it wrong, the speed in which I rectify it and have the difficult situation is the most important thing.

“If they’re not right for the company, the company is not right for them. There’s going to be critical feedback about unmet expectations on both sides, so it’s right at that point to have an honest conversation about what the company needs.

“For me, the first reason why you would let someone go is a cultural violation – skills and knowledge can be taught,” he says. “I think it should be a responsibility to upskill people and teach them. One person leaving a company doesn’t necessarily kill a company, but I’ve seen many a time one person staying nearly did.

“If someone doesn’t share your company’s culture, it is contagious. My biggest mistake in business was knowing someone wasn’t right for the organisation and procrastinating on it.”

#5 – Build a supportive community

A business associate once asked Bartlett how many company cultures did his business have? One, the entrepreneur suggested.

But how many managers did this business have? this associate continued.

“Thirty,” answered Bartlett.

Then you have 30 company cultures, was the reply.

The idea behind this conversation was that each company produces subcultures within its own teams, and Bartlett says these have more impact that the overarching company culture. One team can be happy, another on verge of collapse, both within the same office walls.

“I think some organisations see work as getting the to-do list done and it’s very transactional,” he says. “But I think organisations who will retain people the best, get the best out of individuals, and have the happiest individuals provide more than financial renumeration, it’s a supportive community.”

“It reduces stress levels and makes you more resilient as an individual. We KPI-d the number of internal communities we had. We also had in-house therapists with opt-out therapy sessions.

“When you have a community, that’s when people do the best work of their lives.”

More on team building

Six ways to boost your small company’s culture with technology

Simple tips for creating a fun and positive company culture in your SMB

The post Steven Bartlett’s top 5 tips for team building  appeared first on Small Business UK.

Businesses with fewer than 50 employees rarely have an HR team. Instead, a senior manager who may have had some HR experience in the dim-and-distant past may have been seconded to the role. Not only does this leave your small business vulnerable to legal challenges when HR procedures have not been rigidly followed, doubling up like this takes away time from his or her day job.

Or, if you yourself are handling HR, it takes time away from running your business and eats into your own productivity – one of the biggest challenges facing any small business.

With the ongoing cost-of-living crisis, rising inflation and spiralling wage bills, companies will be looking to save money where they can.

Outsourcing whole or parts of the HR function can be a cost-effective way of reducing overheads, while benefitting from expert skills.

Outsourcing HR is usually more cost effective than having a full-time salaried employee.

See also: How to decide on HR policy for your small business

Getting the experts in

One of the common reasons for outsourcing is to have access to higher levels of experience, knowledge or expertise.

A common area for outsourcing is pensions, where regulatory rules and changes to the legislation have become so complex that, in most instances, organisations enter into an agreement with a third party to manage the investment and administration of their schemes.

>See also: Top 10 HR tips

What to outsource?

HR covers a wide range of activities, typically:

• Strategy and objective setting
• Recruitment and selection
• Terms and conditions of employment, both statutory and occupational
• Pay and benefits
• Employee relations
• Supporting line managers in discipline and grievance situations, dismissal, absence management, staff appraisal and redundancies
• Equal opportunities/managing diversity
• Organisation design and development
• IT policy including data and privacy
• Training and development, including coaching and mentoring initiatives

To support these, whoever looks after HR will also have to develop policies and procedures, train line managers, inform and consult employees and their representatives and maintain the “official” records of each employee through their personnel files.

It is possible for all or any of these activities to be outsourced. Many organisations hand over recruitment and selection activities to a third party. The provision of flexible benefit schemes, pensions, training and development also lend themselves to third-party delivery.

>See also: 7 of the best HR consultancy companies in the UK

Pros of outsourcing HR

• Gaining better quality support than the business currently offered in-house
• Reduced cost
• Increased efficiency
• Access to improved HR IT systems
• Improved management information (metrics)
• Access to HR expertise not available in-house, such as specialist TUPE transfer advice
• Increased flexibility and speed of response
• Reduced risk

Disadvantages to outsourcing HR

• Losing control
• Loss of local knowledge or internal knowledge and expertise
• Failures in service delivery
• Lack of confidentiality and security
• Poor relationships
• Standardisation (the provider makes all clients follow the same procedures and practices)
• Outsourcing HR contracts can be lengthy, with agreements of 5-10 years not uncommon

Choosing an outsource provider you are establishing a potentially long-lasting relationship, so you need to take time deliberating on the right provider.

When a provider has been chosen, service-level agreements will need to be created, which are essential to the smooth running of outsourced services.

>See also: 6 HR software tools you can use for small business

Working together

Managers and other employees will need help and support in coming to terms with the new arrangements. In addition, the provider will need to know as much as possible about your small business and its goals.

If the provider is going to offer advice to staff and managers, it will need to have access to employee files and records and to HR policies and procedures. You will also need to ensure that any transfers of information are properly protected as required by GDPR legislation.

>See also: Outsourcing HR v inhouse HR management

6 steps for outsourcing HR as a small business

1. Identify the reasons for outsourcing
2. Think about the alternatives
3. Consider the internal implications
4. Look for suitable providers
5. Agree a service level agreement
6. Transfer your HR needs across

#1 – Identify the reasons for outsourcing

If you’re thinking about outsourcing HR, you need to identify the reasons why you want to do this and what impact it will have on your employees.

Why do you need to outsource HR? Is it because your business is too small to have its own inhouse HR manager? Or because you want to tap into expertise provided by an HR provider?

If the answer is because you think your current internal HR manager is not fit for purpose, or is overwhelmed by the workload, remember you could be in a costly redundancy situation.

#2 – Think about the alternatives

Of course, you might think about hiring someone in-house to be your HR manager. If you do decide to hire a full-time HR manager, the average national HR manager salary is £43,000.

This compares with around £1,200-£3,600 per year for fully outsourced HR management, including health and safety, payroll, etc.

#3 – Consider the internal implications

If the reason for outsourcing is a cost one, then you need to look carefully what the true internal costs are and whether outsourced cost really is cheaper. Don’t just think about the known costs; factor in the hidden costs such as redundancies or redeployment of staff currently covering the work.

#4 – Look for suitable providers

You can find the Small Business guide to HR consultancy providers here, which lists seven of the biggest outsourcing HR providers.

Or you could go with a specialist SME HR consultancy sourced through Enterprise Nation.

Regular contributors to Small Business when it comes to HR issues include:

• Bespoke HR
• Citrus HR
• DOHR
• Rowan Consulting
• The HR Dept
• Workplace HR

 

Ask to speak to another of their clients and interview them about how satisfied they have been with their service.

#5 – Agree a service level agreement

A service level agreement (SLA) between your business and the HR provider is essential in order to be clear about expectations and responsibilities on either side.

The SLA should include:

• Names of both parties
• Date the contract will start and when it ends
  Functions that the HR provider will carry out
  Goals and objectives which the HR provider will aim to achieve
• How often the partnership should be reviewed, i.e. set regular performance updates
• Payment details

 

By going into detail about exactly how you would like the HR experts to help your company, you can avoid a “one size fits all” approach and ensure the service is tailored to own small business’s needs.

However, it’s important to make sure the SLA is flexible enough to allow for adjustments in goals if needed.

#6 – Transfer your HR needs across

Once you have agreed on your provider, either you or somebody in your team will have to manage the HR transition and, once your new outsourced service is up and running, monitor and assess its effectiveness.

And of course you will need to review as the contract comes to an end before deciding whether to review or not.

Further reading on outsourcing HR

Small business HR – everything you need to know

Outsourcing your business HR: when to do it, the benefits and the pitfalls

The post A guide to HR outsourcing for small business appeared first on Small Business UK.

]]> https://smallbusiness.co.uk/how-to-best-manage-inductions-for-hybrid-staff-2566971/ Thu, 27 Apr 2023 11:01:45 +0000 https://smallbusiness.co.uk/?p=2566971 By Sue Tumelty on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs



How should small businesses best manage inductions into office culture for new hybrid staff? Sue Temelty of The HR Dept offers practical advice

The post How to best manage inductions for hybrid staff appeared first on Small Business UK.

]]> By Sue Tumelty on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs



Big companies may be forcing staff back to the office fulltime, but SMEs still have to cope with managing inductions for hybrid staff.

From fairly early on in the pandemic, with the rise of remote conferencing technology, it was clear that some form of hybrid working was likely to stay.

Many of us loved it at the start and the legacy is clear – some companies continue to benefit from reduced overheads, while their staff enjoy an improved work-life balance. For other businesses however, as time has gone on the sheen has begun to wear off.

In the world of giant corporates, companies such as Meta, JP Morgan and Microsoft are changing their tune, rearranging their relevant policies and citing productivity, team building and innovation as essential drivers to get managers and teams back into the office.

But while the tech gurus and bank bosses might grab the headlines for their moves to order staff back into the office, SME owners know, too, that working face-to-face is important for their own productivity.

At The HR Dept, we advocate to our UK-wide clients that the benefits of collaboration in one workplace cannot be overstated. We understand that humans are social beings, who need to be physically present in order to bond over meaningful relationships. Great as they are, Zoom and Teams meetings just do not cut it.

Best practice managing inductions for hybrid staff

For many businesses, that leads to a hybrid approach – some days in the office, some working from home – which tries to capture the best of both worlds. So, as business practices evolve, how can you best manage inductions for hybrid staff?

Here’s a look at some of the approaches you could adopt to ensure your new hires have a flying start and, hopefully, stick with you.

Before they join

Sort out their tech

You want your new hybrid staff member’s induction to be smooth, so make sure this is done before they arrive. Ensure any work devices or kit have been pre-loaded with important software or templates. Bookmark any websites they may need to access on a regular basis.

Get personal

Draft a company-wide “new joiner” introduction email and be sure to include any fun facts or conversation starters. For example, “We hear Alice has a terrific knowledge of 80s trivia – one for the pub quiz team?”

Set out the plan

Regardless of their long-term work pattern, it is good to have them in the office in the first week to build rapport and make connections. Let them know what the induction will look like in advance.

Week 1: In the office

Help up-skill

It’s easy to assume that everyone knows how to screenshare, raise a virtual hand, or even schedule a Zoom meeting. New joiners will feel reassured if you offer a physical walk-through of all collaboration apps and software.

Think about shadowing

New employees can quietly join a meeting and this is a nice, relaxed exercise for a first day. Be sure however to introduce them to the team and advise they’re there to simply observe. Get them to take notes and perhaps give you private feedback.

Keep it balanced

It’s easy to top-load the first week with loads of introductory calls and meetings. This can be overwhelming, not to mention tiring. So, schedule a few easy, immediate tasks. This will help build their confidence and enable you to quickly identify any gaps in their skills.

Modify your health and safety induction

This piece is an important part of any induction, but now you’ll need to include working from home. You still have a duty of care here. Key points to cover include the set-up of the workstation to comply with display screen equipment regs and protect posture; and also mental health to ensure staff know how to report (and get help for) work-related stress.

Set them up for remote working

Building on the initial tasks set in the office, lead on to others that they will be able to do from home. Use the facetime in the office to set expectations about work ethic, productivity and culture, to guide them when they are away.

Week 2: When working from home (WFH)

Set the tone

Think about sending a welcome package by post. This could be something as simple as nice pens and notepads.

Encourage mentoring

Match new joiners with experienced, friendly staff who are willing to offer a bit of mentoring and advice. If both parties appear to have shared hobbies and interests, all the better.

Check-in regularly

Don’t assume that if you haven’t heard anything, they’re doing okay. If possible, schedule daily one-on-ones in the beginning. This will help track their progress and ensure they’re happy, engaged, and staying usefully productive.

Week 4: How did you do?

Ask for feedback

Hybrid working is still pretty new and the only way you can improve your digital onboarding is by asking for feedback – either via an informal tea break chat or perhaps a quick online survey such as SurveyMonkey which has a free basic package.

Successful hybrid staff inductions

We’d recommend that these various steps will help maintain a positive and constructive relationship with your new employees, helping you strike the balance between modernising your working practices to meet current expectations, while maximising chances of retention and maintaining authority over standards of performance.

Of course, all businesses are different and will have a different optimal balance for getting the best out of your workforce. So, if you are new to hybrid working as a concept, or if you need a bespoke programme, we would recommend seeking professional advice.

Sue Tumelty is founder and executive director of The HR Dept

Further reading

What do statutory pay rises mean for SMEs? – Sue Tumelty, founder of The HR Dept, explains upcoming statutory pay rises and what you should do as a small business owner

Statutory maternity pay UK – A key member of staff tells you that she wants to take maternity leave. What are your maternity pay obligations and how long can they be away for? Sue Temelty has the answers

Dismissing staff on long term sick leave – What should you do if you suspect one staff member is malingering? Deliberate work avoidance can affect your whole team’s morale, says Sue Temelty

The post How to best manage inductions for hybrid staff appeared first on Small Business UK.

]]> https://smallbusiness.co.uk/what-do-statutory-pay-rises-mean-for-smes-2565841/ Wed, 29 Mar 2023 13:16:34 +0000 https://smallbusiness.co.uk/?p=2565841 By Sue Tumelty on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs



Sue Tumelty, founder of The HR Dept, explains upcoming statutory pay rises and what you should do as a small business owner

The post What do statutory pay rises mean for SMEs? appeared first on Small Business UK.

]]> By Sue Tumelty on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs



What do statutory pay rises mean for SMEs?

As sure as April brings showers, it also brings statutory pay rises. All businesses need to be aware of the changes which are coming into force and, ideally, have planned ahead so that these pay rises can be incorporated effectively into your business spending.

This year, thanks to inflation, they jump higher than normal. For SMEs already under considerable pressure, this is not great news. Consideration must be given to where these extra costs will be absorbed – either passed on to customers or impacting your profit margins.

To help you plan and budget for the imminent rises, effective from April 1, here is a handy summary of the main statutory rates.

National living/minimum wage

As you will likely know there are several components to the national living wage. You may not know that the Low Pay Commission (which advises the government on rates) has a target for the national living wage to be two-thirds of the median earnings for all workers aged 21 and over by 2024.

This aim had been disrupted by Covid and, even before inflationary pressures hit in 2022, they had advised raising rates last year more than normal to catch up (6.6 per cent). This year their recommendation was in the region of 10 per cent.

This means that from April 1, 2023, the new rates are:

Aged 23 and older (the national living wage): £10.42 per hour

Aged 21-22: £10.18 per hour

Aged 18-20: £7.49 per hour

Aged under 18 (but above compulsory school leaving age): £5.28 per hour

If you pay at or near the national living wage, it’s important to be aware that processes such as clocking on/off or pay deductions (like for a compulsory dress code for waiting staff) can drag the effective rate below legal minimums.

This catches out a lot of businesses and can lead to a lengthy investigation and sanctions from HMRC. I would suggest that it is worth consulting with an expert, so that they can help you review your employment practices to ensure you stay compliant.

Apprenticeship rates

There are also minimum wage rates for apprenticeships. These start significantly lower than the headline minimum wage rates. From April 1 these starting rates rise from £4.81 per hour to:

Apprentices aged under 19: £5.28 per hour

First year apprentices aged 19 and over: £5.28 per hour

Aged 19 or over and have completed their first year: an applicable living/minimum wage for their age (see above).

With much of the training paid for by the government, apprenticeships are a cost-effective and interesting way to bring new talent into your team. It is important to remember that apprenticeships are not just the preserve of trades.

We know several businesses in professional services sectors, such as accounting, who are actively recruiting youngsters out of college, embedding them into their workforce with the offer of training and rapid career development. It’s an enticing prospect for a young college or school leaver who is facing the prospect of student debt but has an alternative route into the workplace. You might also consider those with the maturity to consider the holistic practicalities of the next decade to be the kind of youngster you are keen to employ. Again, experts can help advise on this option.

Statutory maternity/paternity/adoption pay

Businesses are faced with a similar story for statutory maternity pay as well as statutory paternity, adoption and shared parental leave pay. Of course, the first six weeks of maternity and adoption pay are calculated as a percentage of average weekly earnings. This stays at 90 per cent.

Thereafter, maternity, paternity, adoption and shared parental leave are all paid at a rate of £172.48 per week or 90 per cent of the employee’s weekly average earnings (whichever is lower). In 2022 the rate was £156.66 per week.

Statutory sick pay

Statutory sick pay is the last of the main statutory rates that we will look at here. For qualifying employees it becomes payable after four consecutive days of sickness absence. From April 6 the weekly rate is £109.40. This compares to £99.35 in April 2022.

Advice for SMEs

With inflation still high and the cost of everyday staples such as food continuously going up, it’s a difficult time for employees as well as business owners. It’s important to ensure that these statutory price rises are considered carefully by company owners, so that staff are retained wherever possible for the good of all.

We would recommend seeking advice on the implications of these pay rises and also, crucially, how you can continue to structure and motivate your workforce. While the ongoing economic difficulties are of course a challenge, it’s important to recognise the value of the experience and expertise among your existing workforce. It makes business sense to do all you can to retain this knowledge in preparation for easier times. Your workforce will thank you for it too – and will be more likely to remain loyal as a result.

What’s crucial from an adviser is in-depth understanding about you and your business: what its values are and where it is looking to go. That’s why we’d always advocate a personal service over an off-the-shelf solution.

You should also bear in mind the risk of tribunal and the resulting fines and legal fees. Good insurance is worth its weight in gold, if nothing else, to bring you peace of mind so that you can focus on navigating your ship through choppy waters.

Sue Tumelty is founder and executive director of The HR Dept.

Further reading on pay

How to manage an employee’s pay rise request

The post What do statutory pay rises mean for SMEs? appeared first on Small Business UK.

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