New research reveals that over half of British SME bosses with HR responsibilities say Government funding is key if their business is to successfully implement the new Employment Rights Bill.
It comes as the proposed changes progress through Parliament despite heated debate.
The survey was conducted by Breathe HR to uncover attitudes to the Bill amongst SME leaders who will be steering through the changes. It also sought to understand the specific challenges this group faces. SMEs account for 99.9% of all businesses, three-fifths of employment, and over half of private sector turnover in the UK.
When asked what support would best help their organisation implement the Employment Rights Bill, financial support came out on top, with 51% of SME bosses saying they’d benefit from Government funding and grants to help with resourcing.
The findings come ahead of the Autumn Budget on 30 October 2024, when SMEs will learn what the government’s spending plans could mean for them.
To conduct this research, Breathe HR surveyed senior leaders at British SMEs (with up to 250 employees) whose personal responsibilities include HR; such as CEOs, Founders, and HR Directors.
SMEs call for more support
In addition to government funding and grants, SMEs also want guidance to implement the Employment Rights Bill. 48% of SME leaders surveyed by Breathe HR say Government guidance on what the proposed changes mean for employers would be helpful, whilst 41% want legal advice on new employment rights.
SMEs are also seeking training and tech support. 2 in 5 (40%) SME bosses say training for leaders and managers on new employment rights would best help their organisation implement the Bill. Just under a third (31%) say their organisation would benefit from software to make it easier to manage staff scheduling, including flexible working requests; whilst a further 29% highlighted the need for tools to manage sickness absence, to ensure compliance with new rules around day-one rights to sick pay.
Gareth Burrows, founder of Breathe HR, said, “SME leaders are excited about the proposed employment law changes and can see the benefits they will bring to both employees and their business. But they desperately need Government support. SMEs are set to be disproportionately impacted in time and cost by the new rules, and Government backing will be crucial if these changes aren’t to set back smaller businesses.
“The Government must earmark specific funding in its upcoming budget to support SMEs in implementing these changes, and also make use of the extended period between now and reforms taking effect to shore up the financial support and guidance required by SMEs. SMEs are the backbone of the economy and deserve as much attention and support as bigger businesses in steering through the changes. ”
SMEs disproportionately impacted
63% of SME bosses surveyed agreed that changes proposed within the Employment Rights Bill will disproportionately impact small and medium-sized businesses in terms of cost and time to implement. Nearly a fifth (17%) of SME leaders surveyed estimate rolling out the Employment Rights Bill could cost them up to £1000 per employee.
Yet despite cost concerns (and unlike bigger firms) the majority of SME bosses remain buoyant about the future, with 80% agreeing that the Bill will be a positive step forward for employees, and 68% agreeing that the Employment Rights Bill will positively impact productivity at their organisation.
Just 14% of SME leaders don’t believe implementing the changes will disproportionately impact SMEs.
The Government has a long interim period in which to secure support for SMEs. Consultations on employment law reforms are expected to begin next year, and the majority set to take effect no earlier than 2026.
