Health, Safety and Wellbeing – is it possible on a tight budget?

Small and growing businesses need to keep a tight hold on their budgets if they are to get through those first critical months and years.  One cost that is sometimes forgotten or overlooked is for ensuring that your employees and workers are kept safe, healthy and well at work.  If you have more than five people working for you, you need to ensure that you comply with all of the current Health and Safety regulations.

That sounds daunting and potentially expensive, but it doesn’t have to be. Now I’d never advocate cutting corners on health and safety to help with the cash flow, but there are ways and means to help your finances.  You could spend a considerable sum, and there may be some unscrupulous people out there who will scare you in to thinking that you have to; but that really doesn’t have to be the case.

Often the Health and Safety essentials needed by law aren’t as complicated as they sound, so you don’t need to be an absolute expert to put them in place and monitor them.   The Health and Safety Executive (HSE) have a lot of free, helpful guidance available online and your own industry association / federation may also provide free or reasonably priced guidance too.  Essentially it will boil down to how complex and dangerous your workplace is – after all, there is a big difference between working in a small office and a nuclear power station.

Some aspects of health and safety might not cost you anything apart from staff time, as long as you already have the basic skills and knowledge in place. Examples can include ensuring that you have the required welfare facilities (eg. a toilet, wash hand basin and drinking water – hopefully things you already have?), that risk assessments and safe working procedures are in place, that staff take rest breaks and staff know what to do in the event of fire / accident / incident.  If you don’t have someone with the necessary knowledge in place already (known as a “responsible person”) you may need to get someone trained or you could buy in the expertise to get you set up.

Other aspects of health and safety will cost you some money, but these could be modest amounts and will certainly be a lot cheaper than doing nothing, only for an accident to occur later.  Examples here could include providing Personal Protective Equipment (PPE) – such as warning or hazard signs, “high viz” wear, steel toe capped boots, gloves or safety goggles / glasses – having a basic workplace first aid kit and fire extinguishers.  As with most things in life, shopping around and comparing quality and prices is key, as it would be very easy to spend a lot of money when you really don’t always have to.

Health and Wellbeing is a growing area and has the potential to cost you nothing or an awful lot.  Keeping your employees healthy and well doesn’t have to involve expensive gym facilities or memberships.  Sometimes the most simple things can reap the biggest benefits.  Recent research has shown that employees who take even just a 15 minute lunchbreak and spend it having a short walk outside are happier, healthier and more productive than those who don’t.  That doesn’t cost you, the employer, a thing – especially bearing in mind that staff typically aren’t paid for their lunchbreaks.

The most successful and effective health and wellbeing initiatives are often simple yet still manage to catch the interest of staff.  I’ve worked in organisations where groups and activities, such as a running group or a meditation session, are run by passionate volunteers who are keen to involve their colleagues. Group activities and interaction can really help staff morale and wellbeing even if they aren’t necessarily “active”. A popular workplace choir in one of my former workplaces springs to mind…..

So even if you are feeling the pinch financially, I hope that you do recognise there is still a need to keep your staff safe, healthy and well.  It doesn’t have to cost a lot and I can guarantee that even by doing a little, it will help save you a lot more money in the long term.

Time for a lunchtime walk anyone?

Self-employment and other workforce dilemmas….

You may well have seen recent headlines about people whose organisation told them that they were self-employed but actually ended up not being – for example the recent cases linked to Uber, Deliveroo and Pimlico Plumbers. So what are the differences between being self-employed and employed?  Or for that matter being a “worker”?

Admittedly this can be a complex area and if you are in doubt or are being challenged by someone who works for you, you are always best to get expert advice.

However, there are some guiding principles and questions to consider when determining what someone’s employment status is. (ie. are they an employee, a worker or self-employed?)

  • Employees

Being an employee tends to be the “normal” form of employment status for many people.  They are directly employed by an organisation via a contract of employment.  This contract of employment outlines their role, responsibilities and entitlements while working for the organisation.  Legally all employees must be issued with a contract of employment (also known as a “statement of particulars”) within 8 weeks of starting with an organisation.  Failure to do this can lead to a financial penalty for the employing organisation.

Typically an employee works directly for the organisation they are employed by, in one of their workplaces, uses their equipment / facilities and is managed (or “controlled”) by them on a day to day basis.  For example, Fred has a contract of employment issued by XCo.  It outlines that he works in the office of XCo and is line managed and told what work to do by Jo, who is also employed by XCo.  If Fred doesn’t attend work, he doesn’t have to send someone else in his place.  As an employee Fred has certain entitlements or rights, such as being paid, being eligible to take paid annual leave and the entitlement to some form of sick pay if he is too ill to attend work.  These are outlined in his contract of employment – so hence it is an important document to refer to to ensure that Fred is being treated correctly.

  • Workers

In the recent cases with Uber, Deliveroo and Pimlico Plumbers the people who challenged their employment status were deemed to be “workers”.  All employees are “workers” but workers are not employees, even though there is some common ground.

A “worker” is defined as “someone who carries out paid work for an organisation but is not bound by or employed by a contract of employment”.   A simple example could be – Jane comes in to do some work tasks for your organisation during the school holidays but she doesn’t have a contract of employment with you.  She may be working via an employment agency (as a “temp”) or perhaps works directly for you.  If Jane doesn’t attend work, she doesn’t have to send someone else in her place but if she works via an employment agency, they might send a replacement. As a worker Jane has certain statutory rights such as she must be paid the national living or minimum wage (dependent on her age), she has the right to the statutory minimum paid time off and cannot be discriminated against. However, as she is a “worker” and not an “employee” she has no entitlement to unfair dismissal protection, redundancy pay or the right to request flexible working.

Confused?  There is further guidance online on the Gov.uk website that you might find useful.

https://www.gov.uk/employment-status/worker

  • Self-employed / Contractors

There is, or should be, a real difference in how self-employed people or contractors work compared to people who are employees and workers.  The fact there wasn’t a clear difference in the cases of Uber et al is part of the reason that the Employment Tribunal / Employment Appeal Tribunal ruled as they did.

The terms “self-employed” or “contractor” do not particularly make a difference when trying to determine someone’s employment status.  What is important is the arrangements for how they are “engaged” to do a task, how the task is carried and by whom, and how the work is paid for.  If someone is truly self-employed there is no contract of employment but there will be a “contract for services”.  The “contract for services” defines what work is to be done but allows the person or people fulfilling it the freedom to decide how best to carry out the work.  It may also mean that one person is substituted for another in order to fulfil the work, perhaps because they have a certain skill or area of expertise that is needed for a part of the work.

Self-employed people work for themselves and do not have a line manager in the organisation they are working for.  They typically provide their own equipment, such as tools, a vehicle or IT equipment.  A self-employed person invoices the organisation they are carrying out work for and receives the full amount of invoiced.  They have to declare this income and pay the relevant tax and national insurance contributions directly to HMRC via their annual tax return. Again this is not an exhaustive or definitive list and further information can be found at:  https://www.gov.uk/employment-status/selfemployed-contractor

The big advantage for hiring organisations is that self-employed people do not have employment rights – so are not entitled to things such as the national living wage or holiday pay.  The hiring organisation also doesn’t have to pay for any employers’ tax contribution, employers’ national insurance contributions or employers’ pension contributions.  These various contributions total up to a significant financial saving for the hiring organisation, so hence why companies such as Uber used the self-employed model to reduce their costs.

This is an area that remains under scrutiny as the government believes it is missing out on significant tax revenue due to people misusing the current system.  The government has recently announced a number of reviews to look at the issue of self-employment, particularly as part of the “gig economy” and for the public sector, in more detail.  There are bound to be developments so watch this space………….

Is in-house HR the best option for your Company?

Having worked ‘in-house’ for much of my career and more recently as a consultant, I’ve had seen both sides. This is particularly illuminated when one performs a detailed ‘access all areas’ HR audit.  Matching the needs of the business against the capability and remit of the HR function. Often it can be a bigger gap than anyone realises.

New role in HR – Work out what you need to do to fit in

When you begin a new role with a Company they are keen that you bring new ideas and change things. But many quickly realise that the most important thing to learn is ‘How they do things around here’. For in many companies not working that out quickly could mean one is not in post long enough to do more than just be new.

Companies by their very nature are insular. The individuals that do well are either the very brave and talented who do their own thing but bring in so much revenue that no-one cares. Equally those that are extremely corporate will have long and successful careers. Individuals that are very bright will move on naturally because there will be many options for them. Those that are clearly poorly performing will be moved on. But everyone else stays.

So, in that context the parameters of what ‘good HR’ looks like are set. This will almost certainly involve maintaining unique processes and ways of doing things. Quirky administrative approaches. Often long winded. And all the unwritten stuff about who gets fired quickly and how.  And what gets ignored or isn’t deemed officially important.

HR ignore half their customers

When a Company initiates an HR audit what they often want to know is how do we compare with our competitors? Do we have the right resources and skills in HR. Too much or too little? That answer is always unique to the organisation as often it is driven by individuals and/or the sector. If you have someone very senior that insists that HR is all about administration and problem solving and nothing more than that will dictate who you have in your function. If you are in a sector where you have high turnover and a lot of ER problems that may require some intense catch up before you move to a different model.

Companies have different motivations for HR audit from are we compliant (will I get my bonus?) right through to do we have the skills and talent in HR and the remit to achieve what the ambitious CEO and board want to achieve.  Often there is quite a gap.

And HR still exclusively focus their activities on ‘employees’. The self-employed, the flexible labour and the workforce of tomorrow are largely ignored which is a bit like only caring about the customers that visit your store and not the ones that shop occasionally on-line or could be buying your products.

Most HR process are substantially similar – not substantially different.

In an article written by Ruud Rikhof, Managing Partner of KennedyFitch he states “We believe that 80% of the activities in HR are substantially similar from company to company, not substantially different”. So, if it is substantially similar, why would you need it “in-house and customised” when you could pass it on to someone else, do it quicker and save money?

So many HR practitioners talk about Best in class. So many CEO’s don’t share these aspirations as they see such a process as long winded, expensive and distracting from core business.

Do ‘best in class’ processes you have contribute to the bottom line?

Whilst core HR processes should be agile and robust, they will never give your business a competitive edge. So, it’s wise to focus what resource you have on the things that will.

One of the issues about benchmarking your company’s HR needs against another is that whatever standard you use may not be the right one.

Your performance management system may have won awards and have some great technology with it – but does it drive performance?

You may have invested in a fantastic HR software system – but where are the reports and does anyone use or understand it apart from HR?

So, do you know what is right and important for your organisation and is that where you are directing your resources?

Individuals want an individual experience

When you go out to market to hire exceptional talent, the person you offer to is unique. You are excited about them joining and may even create a different package to get them on board. The CEO will take an interest in their on-boarding. But at that point the individual approach begins to wane. HR will get anxious that the Company is being inconsistent and will want the new hire to be treated the same as everyone else.

We have observed that increasingly individuals demand that they are treated as individuals. It’s often a deal breaker. Yet in-house HR activities are focussed on treating everyone the same.

What are the alternatives?

Many companies value their long serving loyal HR administrator. Key thing is to ensure you have the right level of senior HR challenge and expertise.

Equally you can contract out the administration, investing in a good system and employ a bright career hungry HR professional to work with your leaders and focus on the big things for your Company.

Many companies have an Employment lawyer on speed dial which absolutely supports the reactive problem solving risk adverse model that is hardly likely to have your HR function doing things differently.

Of course you can have both. HR lead in-house and HR admin in house. But that then results in what many businesses have now. A cost centre that stops more than it starts and manages problems.

Getting your HR capability right can be a powerful tool for increased competitive advantage. Especially in a challenging market

 

www.amelore.com

Happy 2017? Predictions for employers……

2016 was an eventful year and most people are now looking forward to a (hopefully) better 2017.  So, a few days into the year, what can employers look forward to over the next 12 months?

  • Brexit

After dominating the headlines in 2016, 2017 is also likely to be a year where Brexit is in the news.  Assuming that the government does what it has promised, then article 50 will be triggered in March 2017.  What Brexit will actually mean for employers and employees remains to be seen, but hopefully things will get clearer.  Updates to come, watch this space…….

  • Changes to work permits and the Immigration Act

This is hardly surprising given the current Brexit situation.  Some of the changes have already been announced and there will be doubtlessly more to come.

What we do know already is that employers sponsoring foreign workers with a tier 2 visa will be required to pay an “immigration skills charge” of £1,000 per worker (£364 for small employers and charities) from April 2017. The immigration skills charge will be in addition to current fees for visa applications.

In April 2017, the minimum salary threshold for “experienced workers” applying for a tier 2 visa will increase to £30,000.  New entrants to the job market, and some health and education staff will be exempted from the salary threshold until 2019.

  • Gender pay gap reporting

Or the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 to give them their full name, which will come in to force on 6 April 2017.  The government published updated guidance on these regulations a couple of days ago and has confirmed that all organisations with over 250 employees need to provide and report on gender pay gap information based on the date of 5 April 2017.  If you haven’t started planning for this, make it top of your new year “to do” list.

  • Apprenticeship levy

There has been much talk about the forthcoming apprenticeship levy and the potential opportunities it brings.  If you are an organisation with a payroll of more than £3m then from 6 April 2017 the levy will apply to you.  The Government has recently published updated guidance for employers on how the apprenticeship levy and the new funding system will work.

  • Salary sacrifice schemes – RIP

As stated in the Chancellor’s Autumn Statement, there will be significant changes to what type of salary sacrifice schemes employers will be able to offer.  Some of the current items offered, such as gym membership, will be abolished from 6 April 2017.  If you haven’t already reviewed your employee benefits scheme, then now is the time.

  • Rises in the national living wage and national minimum wage

This was another announcement in the Autumn Statement.  Rather than having different dates when there are changes in the hourly rates for the national living wage and the national minimum wage, these have now been aligned.  So the next changes will be due on 1 April 2017 and the rates are set to rise.

  • Trade Union Act 2016

We are waiting to hear exactly when this legislation will come in to force but it will happen at some stage during 2017.

Under the rules, a successful vote for strike action will require a 50% minimum turnout and a majority vote in favour of industrial action.  Strike action in “important public services” will require a strike vote of 40% of all eligible voters.

  • Pensions……

There has been a lot in the news about pensions in 2016 – whether it be related to the demise of BHS or the rise in the “gig” economy.  There are already some known changes planned for 2017, such as the final phase of pension auto-enrolment to encompass all employers and the rise in the minimum employer contribution rate.  It is likely there well may be others….

We’re sure that there will be other developments during the year ahead, so keep your eye on this blog for more updates.  Happy New Year!

www.amelore.com

Fit for business? How about an audit?

People often ask what differences I see between working in the UK and France, particularly as a manager.  If there is one thing that is likely to strike terror in to the heart of a French manager or business owner what do you think it would be? Trade unions? Staff demanding their 2 hour lunch break? The actual answer is an “inspecteur du travail”, who is literally a government “workplace inspector”.  Under French law, people in these roles have the right to inspect any business, big or small, at any time to ensure that the employer is upholding their legal, employment obligations towards their workers and staff.

Surprisingly most French people actually think this role is a good and important thing, rather than being “government interference”.  It helps to ensure staff safety, means that French businesses always have their paperwork in order and apparently contributes to France’s high productivity levels. But it could never happen in the UK could it, especially not after Brexit?!

No – not exactly.  However, if you work in a “regulated industry” or supply services to one, you may actually find your employment practises (including your employee related “paperwork”) come under scrutiny. So what do I mean by a “regulated industry” and could it include you?  The typical kinds of organisations or activities that would put you in this definition would be some of the following examples (though not an exhaustive list by any means):

  • Financial services – particularly product selling and advising.
  • Social care – providing any sort of social care, to people young, vulnerable or old.
  • Health Care.
  • Education – be in for children or adults.
  • Housing providers – private sector, public sector or not-for-profit.
  • Utilities providers – including telecoms, as well as water, power etc.
  • Local government – who may well also provide some of the services outlined above.

When you include organisations and businesses who supply services or goods to the types of organisation listed above, you start to realise what a potentially large number this is.

The people who do the scrutinising or inspecting are likely to come from a regulatory body such Ofsted, the Care Quality Commission (CQC) or OFWAT, but there are times when other individuals may need or demand to scrutinise your business.  For example, should you be unfortunate enough to have a serious workplace accident, then the Health and Safety Executive (HSE) will come in and investigate.  This will include scrutinising your policies, training records, employee files and more. It can be incredibly scary, especially as you won’t have had time to “get your house in order” beforehand so any gaps in your “paper trail”, that you have been meaning to fill in, won’t have been sorted out. Oops.

As you are probably aware, the penalties that the HSE or other inspection bodies can levy can be punitive, substantial and costly.  They can even stop you trading / operating.  All potentially because you haven’t been able to produce a particular bit of information or paperwork, or because you haven’t got a policy or process in place.

Sometimes businesses also voluntarily invite people to come and inspect them too. If your business wishes to gain accreditation from Investors in People or to gain an ISO standard then their assessors will need to scrutinise and check that you say you are doing exactly what you claim and what their standards require.  Again, this will be a detailed look at your processes, procedures, policies and employee files.  If you don’t have the things in place that the standard requires, then no accreditation – and potentially a long wait (and associated cost) until you can attempt to get accredited again.  It may even mean that you can’t tender / provide your services to key customers until you get that accreditation.

So, how confident are you that your current HR policies, processes and employee files would stand up to such close scrutiny – be it on a voluntary or regulatory basis?  If you aren’t sure, then we strongly recommend that you take action now.  Who knows what tomorrow may bring?


What does an HR Audit or HR Operational Review involve?

Bringing in external auditors is not anyones favourite pastime however it is accepted as a normal part of business life.  Important for shareholders and investors to get reassurance that everything is going well and often Directors get well deserved credit for good governance and Internal controls.

However, what a more in depth internal audit can bring is a sensor check of how compliant and fit for purpose your business is.

Depending on your needs, we can just do a paper review and look at key documentation such as employment contracts, employee data and staff handbooks. Or we can also meet key staff and check understanding and needs spotting early problems emerging and flagging them.  We can also assess the fit of key staff in key roles if you would like us to.

We then produce a report with recommendations for you to set and implement your own priorities.  Our work with you may include further reviews to check on progress.

HR Audits give you the heads up on what you could and should be thinking about in your business.


At Amelore we offer a tailored service to help you to get your business in shape and to make sure you are ready for whatever tomorrow may throw at you.  Why not contact us to find out more about our HR audit service or our HR bootcamp?

www.amelore.com

Looking to recruit high quality staff but not succeeding?

Despite the looming shadow of Brexit, many UK organisations are still recruiting – albeit on a temporary rather than permanent basis.  Many industry sectors are reporting that it is still difficult to find the right candidates with the right skills and experience, despite the fact that many people are out there searching for new roles right now; myself included.

Is it a matter of the right skills not being out there in the job hunting population or is something else at play?  Here are a couple of examples to illustrate what I mean….

A friend, J, is looking for a new role and career change.  Knowing this he is prepared to take entry level role with the right organisation as long as it gives him what he’s looking for.  J likes being outside, getting up early and working autonomously – he thinks that being a Postman is just the new career for him.  Then he tries to apply for a role with Royal Mail….. To cut a long and painful story short, J’s “candidate experience” is a very negative one.

Why, you may ask?  This should give you a flavour and is not unique to the Royal Mail:

Applications have to be made via an online recruitment portal, which requires you to register, fill in your personal details and to complete an online assessment.  Easier said than done…. J is fairly computer literate and his brother is an “expert” – they try and fail several times to register a basic application.  There is no phone number, email address or help option for him or other applicants to help them with this labyrinthine application process.

If J wasn’t so keen he would give up now. Other suitable applicants may not have the “IT savvy” or the perseverance, so Royal Mail is losing out on a potentially large candidate pool. (how IT savvy do you need to be a Postman anyway?)

  • Where there are multiple vacancies, perhaps with a minor change such as working hours / days or work base, J has to apply separately for each. Each time he applies for a role he has to do the exactly same online assessment again and again.  Frustrating, a waste of his and the Royal Mail’s time (and money?) and it undermines the validity of the assessment. (practise makes perfect – so repeating the test and getting the feedback means you can easily boost your scores).
  • J finally manages to get an application registered and waits to hear. And waits…. And waits. The closing date has been and gone, and despite being told to check his “portal” for progress / an update, there is none.  There is no phone number or email address for him to chase this up so he has to decide whether he waits any longer.  He’s been invited to attend another interview for a different role – so perhaps he’ll just go with that one instead.

I can echo similar experiences to J’s and can add to the what not to do list further:

  • I have a non-standard address and post code – the computer says “no” to allowing me to progress my application. Now what – make one up? (easier said than done)
  • The salary and the exact work location are a mystery. How do I know if the role is paying enough for my needs and am I able / willing to work in that location? (client confidentiality is not an excuse!)  Should I bother to apply?
  • Do I really want to spend hours filling in a very detailed online application form when the majority of this information is on my CV? Can’t I just upload my CV and add in the missing bits?  Also – I can’t save my application part way through – it’s all in one go or nothing.  I don’t have 2 uninterrupted hours available so perhaps I won’t bother….
  • The recruitment portal promises to save my details for next time, should I apply for other roles with the organisation. It doesn’t….  I have to start again if I want to make another application  – do I want to go through that pain again?

So in summary, many of the issues that are putting people off seem to be due to overly automated process with no “human touch”.  Theoretically going for an automated, standardised recruitment portal should make recruitment slicker, cheaper and easier for your organisation – but what about for the candidates?  The initial impression they get from your recruitment system can be extremely negative and it means you have lost them before you even know about them. Employee branding, good PR, your employer reputation and your brand recognition / values aren’t going to change that.

Is it time for a rethink and change to your recruitment approach? We can help……..

www.amelore.com

Company mergers – creating one big, happy family?

 

mergeIn my HR “life” back in the UK, I often found myself providing advice on managing change, whether it be restructuring, TUPE transfers or subtler cultural change.  I now find myself on the other side of things, as Happy Holidays and one of their former competitors, Smiley Holidays, have both been acquired by a large French company.  While these purchases took place a while ago now, it is interesting to see how the changes have now started to trickle down to the staff (me!).

So, can these changes create one new, contented holiday company / family?  At the moment, the views of myself and colleagues are mixed – we’re not entirely convinced that things will be better, or even as good.  What could be done to change our minds and to keep us engaged and motivated?  Here are some suggestions:

  • Communicate, communicate, communicate

With any changes or takeovers there are always rumours about what will and won’t happen.  Clear, regular communication is key if you are to stop the rumour mill and keep staff feeling engaged, rather than worried for their jobs.  A monthly newsletter is better than nothing but it doesn’t really do all it needs to.  How about using social media and other forms of communication too?  – Especially if staff are based in multiple locations or work different shift patterns.  Certainly face-to-face updates and briefings tend to be the most popular method with staff themselves, so can this be done in any shape or form? (Skype, Facetime, podcasts etc)

  • It’s not all about structures…..

Most people tend to think of “change” as being about restructuring, but that isn’t always the case.  Yes, it can make sense to join up some teams and to make some efficiencies and savings while doing so, however, this shouldn’t be the knee jerk reaction.  If you are keen to keep current brand identities then you need to keep some differences in place, which means not merging and restructuring everything.  Be clear on what structures will change, why and when, so allowing other, not directly affected teams / departments to stop worrying about what might happen to them. (at least for now)  At least they can focus on their roles properly again and not be distracted or worried about what may lie ahead.

  • Timing is everything

Make sure you understand what the businesses do when and why.  Are there any critical or very busy times when it would be unwise to change things?  For example for Happy Holidays, changing all of the company mobile phones over to a new network provider with new phone numbers perhaps should have been done outside of the holiday season!  There would have been no customers in resort trying to call old numbers or not knowing about new numbers, and would have avoided a number of problems, upsets and complaints.

  • Who are we again?  What do we do?

Staff do identify with the organisation they work for and can often be surprisingly loyal to it.  Staff will feel that they have their “psychological contract” in place with their employer, as well as their actual employment contract.  Any change can potentially challenge the trust between employer and employee, and potentially sever the “psychological contract”.

It’s really important that staff can see and understand what the future holds and what will be changing. They can then choose whether they want to be part of this or not, and act accordingly.  This can include seemingly obvious things such as – are we still planning to deliver the same product(s) or service(s) to the same customer(s)?  Will we keep the same company values (eg. “green” or “ethical” commitments)?  Will I still wear the same uniform?  Will I still work in the same place?  Will I be working the same hours?  Things like this can really make a difference to someone deciding whether they will stay and go through the changes, or leave now to avoid them.

Even though this is about the two holiday companies I hope that the suggestions will be helpful for your business too.  If anyone from Happy Holidays is reading this, you know where I am and I’m more than willing to make this change a positive one!

www.amelore.com

Eu exit and the implications for your business

Following the unexpected confirmation of a “leave” vote, many businesses will already be turning their attention to what happens next?

The most important message is that the referendum result does not trigger any automatic legal changes; neither does the UK’s formal notification that it will be withdrawing from the EU.

The UK will continue to be a member of the EU for the time being, and the status and effect of all UK and EU law remains unchanged for now, and possibly for some time in the future.

Beyond that, however, much remains to be debated and negotiated – such as the shape of trading agreements between the UK and the EU, the status of EU-derived law, thorny issues such as acquired rights, and the UK’s relationships with non-EU states.

It’s still business as usual for a while – no immediate changes

Neither the referendum result nor the UK’s formal notification to the EU has any immediate legal effect. From a legal perspective, it will be ‘business as usual’, probably for some time to come.

  • The next step is for the UK to give formal notification to the EU of it’s intention to leave. This will start the withdrawal process, which must be concluded within two years unless an extension can be agreed (which requires the consent of all twenty-seven remaining Member States).
  • The future trading relationship between the UK and the EU could take one of a number of different forms; which form it takes will have significant implications in terms of the movement of goods, services, people and capital.
  • The UK will also need to undergo a major legislative project to identify which areas of EU-derived law will stay, which will be modified and which will no longer have effect in the UK.

Each of these processes is likely to involve much consultation with the UK public and industry. Businesses have an important part to play in shaping the environment that they will be trading in, domestically and cross-border.

Employment implications of Brexit for your business

UK employers are unlikely to see any large-scale changes to current employment law in the short-term as a result of the UK leaving the EU.  The UK’s on-going relationship with EU Member States, as well as our own workplace culture, is likely to demand that the UK retains many of the EU-derived laws that have already been incorporated into domestic legislation.

Free movement of workers within the EU

Now we’ve voted to leave the EU, the free movement of workers will certainly be affected. However, changes to legislation are likely to be gradual rather than immediate.

While in theory citizens of EU member states no longer enjoy the automatic right to work in the UK (and vice versa), this will form part of negotiations to establish the UK’s new trading relationship with the EU.

EU nationals already employed in the UK may already have acquired rights under UK legislation, depending on how long they’ve been here. It’s likely that many will be permitted to stay in return for a similar agreement for UK nationals currently employed in EU member states.

For prospective employees, however, it may be a different story. While it will still be possible to employ personnel from EU member states, there may be extra administrative costs to be factored in, such as visa applications. An EU employee’s capacity to remain long-term in the UK may also be affected.

There may also be limitations on the type of workers that will be allowed to seek employment in the UK. If we choose to follow a model more like the US or Australia, visas may only be granted for those in professions identified as having a particular need.

Other employment legislation changes

We also expect some piecemeal reform to specific areas of employment law, such as:

  • Clarification of the rules for calculating holiday pay and how holiday accrues during periods of long term sick leave, under the Working Time Regulations (WTR)1998.
  • There is on-going litigation regarding inconsistencies between the WTR and the EU Working Time Directive (which the WTR implements in the UK), creating wide-spread confusion for UK businesses and potentially significant accrued and on-going liabilities.
  • Whilst the UK government is unlikely to repeal current working time rules, it may well take the opportunity to clarify the rules around holiday pay and provide much needed guidance for employers.
  • Pro-business reform of agency worker rights, given the additional costs and complexities of engaging agency workers since the introduction of the Agency Workers Regulations 2010, which implement the Temporary Agency Work Directive.

Whilst the AWR gives agency workers limited equal treatment rights with comparable permanent employees from day one, following a 12-week period, an agency worker has a right to equal pay, working time and holiday with a comparable permanent employee. The extent of any reforms in this area will depend on the exit terms the government is able to negotiate.

KEY THINGS TO CONSIDER NOW

Understand the profile of your workforce. How many are EU citizens? How long have they lived in the UK? Do any have the right to a British passport that you can support?

If you are in a sector recruiting lots of EU nationals or likely to, consider accelerating any planned recruitment before changes are announced to the process. Much more likely that any existing arrangements will be allowed rather than unpicked.

If you are planning to expand into areas of Europe, familiarise yourself with local employment legislation and understand any opportunities to second staff from UK and vice versa.

If you would like to speak to an experienced employment advisor, please contact us.

www.amelore.com

 

M&A – Assessing People and Cultural Fit

So many factors contribute to success in merger and acquisition (M&A) transactions — and many involve getting the right people into the right jobs. Unless the deal involves nothing more than physical assets — which is the exception to the rule of acquisitions in today’s global business world — the acquirer will need talented, high-performing individuals at all levels in order for the deal to reach its full potential.

Consequently, it is critical to assess the target company’s human capital with the same rigor that is applied to the assessment of pension liabilities, inventories, financial statements, and other significant assets. If we agree that people are ultimately a company’s most valuable asset and largely responsible for income generation and revenue growth, identifying and managing people risks and opportunities usually account for the difference between M&A success and failure. In many cases, however, acquirers know very little about the human capital — at least not initially — that may soon be part of their corporate families.

M&A transactions always trigger decisions about individuals. A merger, for example, often produces redundancies; suddenly there are two CFOs, two HR Directors and so on. The question is: Who should go and who should stay (even if in a different role)? In an acquisition, the acquirer must determine whether incumbents from the target are the best people for the job, given the objectives of the new organisation. Talent assessment addresses this important issue.

For each key position, talent assessment aims to answer these questions:

  • Can this individual successfully achieve the business strategy?
  • Has he or she demonstrated leadership that produces results?
  • What is the employee’s industry-specific knowledge?
  • How well does this person manage relationships?
  • Will this individual be able to work within our culture effectively?
  • Does he or she develop the talents of key subordinates?
  • How long will this person stay and remain motivated?
  • Are there any reasons for concern about stability or volatility?

Pre-close pressure

Talent assessment can be completed at any time, but the more information an acquirer has before signing a letter of intent or closing the deal, the better. For many practical reasons, however, this almost never happens. Time is insufficient. Data from the target are spotty or unavailable. Or the target will not give access to its key people. As a result, a big part of talent assessment tends to be done after the closing, when the acquirer has full control.

Thus, organizations should do whatever they can to overcome these barriers as early in the deal as possible. While a full, formal assessment may not be possible in the early stages of a deal, many actions can be taken to begin the assessment process and get an early read on people and potential deal risks that allow for an early determination of whether to proceed with the deal or walk away.

These include observing behaviour during management presentations and meetings, reviewing CVs provided in the data room, conducting internet searches (or “desktop” research), and conducting informal operational or functional meetings as part of the due diligence process.

The target’s deal team can begin compiling a list of business, leadership, and other behavioural attributes that begin to tell the story of whether a key or critical employee will fit into the go-forward organisation or kill the deal.

The figure below describes the assessment approaches and tools that can be utilised for a systematised approach to talent assessment that will ensure thoroughness and save valuable time.

Screen Shot 2016-05-17 at 16.58.11

In our experience, there are five steps in the process.

  1. Clarify the business imperative

Always begin with the objectives of the deal and expectations for the new organisation. Talent, after all, must be measured against its potential to fulfil those expectations. A clear understanding of business objectives should guide the assessment. For example, is quick turnaround of the business needed, are growth objectives very high, or is the acquisition in a stable environment that will need little change?

  1. Define the essential success criteria

The next task is to define the success criteria required by the business objectives. Those criteria typically involve skills, knowledge, behaviours, experience, values, and — for executives — leadership ability and strategic thinking.

For example, to fill the CEO position at a target company, it is important to determine:

  • The level and scope of experience required to successfully lead the organization, depending on its size and complexity.
  • The technical skill/industry knowledge required for success in this position.
  • The intensity of ambition, commitment, and personal interest a person must demonstrate in order to achieve the defined business objectives.
  • The balance of strategic and operational focus needed by the ideal leader.
  • The leadership style and fit with culture and core values

Culture is an important part of this step. The acquirer should define the workplace culture it wants its key people to embrace and demonstrate through their behaviour.

In many instances, acquirers want people whose values are compatible with their culture. They know that conflicting values will make for a bad corporate relationship and impair the deal.

  1. Develop role profiles

In this step, the assessment moves from the general to the specific, documenting the success criteria for each position in terms of job scope and responsibilities; required skills, know-how, and behaviours; and experience the ideal candidate brings to the table. Based on conversations with the acquiring company or hiring managers, the assessment team identifies the level of responsibility and job requirements for the target roles.

From this it identifies the requisite skills, knowledge, and abilities necessary to carry out the role requirements to their fullest extent. In addition, the team examines what experiences have helped other successful individuals in the past that are relevant to the current situation. This enables the creation of a robust, defensible, and detailed description of the requirements of the target roles.

  1. Assess the talent pool

The first three steps set the stage for the detailed work that follows, gathering whatever relevant data are available on candidates for each key position. The goal is to give decision-makers the information they will need in selecting the best people for each role. These data are gathered by interviewing the board (in the case of CEO talent assessment), hiring managers, or others involved in the acquisition and by gathering any past performance information that is available.

For executive and director/manager positions, the typical selection criteria include leadership ability and leadership style, alignment with the culture of the new organization, potential for future personal development, cognitive ability, and motivation. For professional positions, selection criteria are more geared around specific skills and experience in the job; thus, assessment is heavily weighted toward professional competency, work history, past performance, and future skill-development potential.

  1. Review and select talent

The results of the assessment are presented in detailed reports to decision makers, who use them for review and selection. The quality and extensiveness of these results go a long way toward ensuring the full value of the deal.

CONCLUSION

Indeed, M&A transactions are full of risks and opportunities, and many of those reside in the target company’s human capital. Because of this, it is essential to thoroughly evaluate key and critical talent with focus, rigor, and honesty, beginning as soon as possible and continuing throughout the deal phases.

The consequences of getting people decisions wrong could be the difference between winning and losing in the marketplace — something no company should risk in today’s highly competitive market and volatile economic environment.

Strong HR in a High Growth Business

Research from the CIPD has shown that HR has a vital role to play in driving long-term performance in SMEs, whatever stage of growth the organisation is at, and whether or not it has a dedicated HR function.

The research report (Sustainable organisation performance through HR in SMEs published in 2013) identifies six key insights which can help HR managers – or those responsible for HR – anticipate and respond to the people-related challenges that will inevitably arise as the business grows.

Read on to see if these resonate in your business.

  1. Anticipation is key:  HR needs to have a clear understanding of where the business is headed.  They need to be deeply familiar with the strategy, vision and values, so that they can anticipate key stages of growth and transition and plan for any necessary shifts in the way HR challenges and processes are managed.
  1. Values and purpose should be the bedrock of the business.  One of the biggest challenges facing SMEs is how to retain the heady excitement and ‘family’ feel of the early days.  HR has an important role to play in preserving the vision of the founder or leader and embedding it in all aspects of people management.  Are people engaged with the overall purpose of the business and clear about how they fit into the bigger picture, for example?  If innovation and creativity are valued in the business, are there mechanisms in place to reward employees demonstrating these behaviours? Make sure HR processes are set up to reflect the way the business wants people to work on a day-to-day basis and are not time consuming or complicated.
  1. HR and business strategies need to be aligned.  In the early days, it can be difficult for HR to make itself heard in an SME.  Owner/managers often see it as something they ‘have to do’ rather than a strategic tool they can use to support business growth.  HR needs to work hard to demonstrate that well-thought out people processes can play an important part in building the high performance the business needs if it is to sustain long term growth.  Having up-to-the-minute information about everything from head count to available skill sets is a good way to build credibility and get your voice heard.
  1. Keep processes simple.  As an SME grows, it inevitably needs to move to a more structured approach and to introduce more formal people processes.   It’s important, however, to find the right balance between structure and fluidity so that agility and entrepreneurial spirit are not stifled or undermined by bureaucracy.  Many Office Managers given HR responsibility will implement inefficient and out of date practices due to lack of training or the desire to create a job for themselves. Many processes should become automated.

The latest HR software allows employees to access and update their own data – and makes it much easier for line managers to manage processes such as holidays and absence.  It cuts down on the paperwork, ensures consistency and makes HR processes simpler and more transparent.

  1. Strike the balance between preservation and evolution.  As the business grows, it’s important not to be sentimental about what has always been, and to let go of processes or aspects of the business culture that no longer support its vision or priorities.  In today’s environment, for example, highly formal team meetings are often giving way to more immediate and engaging forms of communication.  Likewise annual appraisal processes are increasingly being replaced with a constant feedback loop and a greater focus on career development. SMART objectives are now seen as a bit silly.
  1. Lay the foundations for the future.  In a busy SME, it can sometimes be difficult to see beyond the immediate operational issues.  HR people in small businesses often find themselves caught up in a relentless cycle of recruitment as the company grows, and barely have time to lift their heads to look at what strategies they should be putting in place to prepare for the future.  Make sure you are not getting so caught up in short term solutions that you are missing golden opportunities to support longer term goals. Sow now what you later want to reap.

The way forward

What HR strategies are you employing to support growth in your SME?  How do you manage to make time for the strategic issues? How scalable are your current practices if you continue to grow at the rate you have?

If you are planning a lot of recruitment when did you last review your recruitment and attraction practices, your employee benefits package, how you manage talent?  No point in putting lots of effort into recruitment if you have a revolving door straight back out to your competitors. Both expensive and a waste of your time.

Whilst your business may not need a full-time senior HR practitioner, working with someone flexibly to help set the direction internally and pin down your strategy for how you handle the people side of the business just makes good business sense.