18 Dec What the election result means for HR
While there’s no doubt the latest election centred around Brexit, there are other important aspects to consider. We take a look at key points of the Conservative Party’s manifesto to see how these will impact HR and the workplace.
Will Brexit affect EU workers?
With Boris Johnson’s new majority, it seems more than likely he will ‘get Brexit done’ by the end of January 2020 which could pose a potential problem for those industries that reply heavily upon talent immigrating here from the EU. However, under current plans the government says that those EU citizens who wish to remain in the UK have until 30th June 2021 to apply for settled status.
Andrew Willis, Head of Legal at Croner, expert consultants in Employment Law, points out that the Conservative’s plan to move the country to a points-based immigration systems that “may create uncertainty for employers that often rely on a steady flow of EU nationals for low-skilled work. Especially, since the party has insisted that higher priority will instead be given to highly skilled job seekers with desirable qualifications.”
Increase to National Living Wage
One of the new government’s manifesto pledges was to raise the National Living Wage to £10.50 an hour by 2024, and to lower the age threshold to 21. This rise is great for employees, but some smaller firms may indeed struggle with this increase in wages and have to seriously re-think how they will afford to hire the talent they need.
There aren’t any planned raises to income tax which means HR won’t need to look into changing renumeration packages for senior members of staff.
Director of Employee Wellbeing at Benefex, Gethin Nadin, has suggested that the way candidates make career decisions is changing, as “people are starting to gravitate towards employers who align with their personal and political values.” As the Conservatives have pledged to reach net-zero carbon emissions by 2050, firms can take this a giant nod that reducing their impact on the environment is a key social concern and important decision influencer.
Indeed, a survey by Porter Novelli Company found that more than 1 in 7 millennials prefer brands that are driving social and environmental change. Mr Willis from Croner has also hinted that business could benefit from adopting a more eco-friendly stance, saying: “Although little is known of how this [carbon pledge] will work in practice, additional requirements will likely be placed on employers to increase their sustainability. These efforts could help employers stand out in the job market and encourage a more significant number of applications from environmentally conscious job seekers.”
So, to stand out from the crowd, HR departments need to ensure the purpose of their business goes beyond making money and aligns with the goals and values of their target talent – and adapting their recruitment strategy to demonstrate this.
Pledges to improve the commute
Fare increases, unreliable public transport and long delays due to traffic jams. These are just a few of the obstacles many commuters have to face at least twice a day just to get to and from work. The Conservative manifesto promised to do something about these travel woes, including investing in a new rail line between Manchester and Leeds, £2billion to fix potholes and a further £29billion for roads. However, previous projects promised by the government are still yet to come into fruition, so trust in these new pledges is understandably thin.
What HR needs to do to mitigate the impact of the difficult commute is to be flexible with working hours and locations. General Secretary of the TUC believes being flexible has a big positive impact on their staff and therefore their productivity: “Home working and flexitime can cut journeys and help avoid the rush hour. And if staff have fewer stressful journeys, they can focus better on their work.”
Review of the Apprenticeship Levy
Since its implementation in 2017, the Apprenticeship Levy has reportedly lost some businesses more than £100million. In reaction to the somewhat poor reception of the plan to get much needed funding for training, the new Conservative government promises to reform the Apprenticeship Levy.
Tania Bowers is a Legal Counsel at the Association of Professional Staffing Companies and says they welcome the change but warns the government that “they could do more to ensure that the system works effectively. With recent figures revealing that employers have lost £133million from Apprenticeship Levy accounts due to funds expiring, there is clearly need for reform.
“We have called for the system to be updated so that monies can be shared to assist the professional development of agency workers and Independent Professionals – particularly in talent-short STEM sectors such as digital, engineering and construction.”
Revision of the new IR35 implementation
Freelancing is fast becoming one of the most popular ways to work in the UK and as such, many businesses now rely on the services of these individuals. The implementation of the new tax rule IR35, which shifts the responsibility of employment status, is worrying organisations and the self-employed alike.
The Conservative Party have promised to review the new rule, although it wasn’t mentioned in their manifesto, to ensure no one loses out. Dave Chaplin, Director for Stop The Off-Payroll Campaign, said IR35 “will force thousands of contractors into false employment, expose self-employed contractors to excessive taxation, as well as depriving UK plc. of essential access to talent and key skills and drive up project costs.”
While the founder of Clarke Bell, an insolvency practitioner, John Bell, said: “We need a review into IR35 as a matter of urgency as the uncertainty is having a crippling effect on the livelihoods of many contractors as well as impeding hiring decisions by firms.”