Thursday, 9 March 2006

With employment law, and support, focussed predominantly at employees…. Who stops to think of the bosses!

I remember from starting my first company, every time I took on a new employee, it was a massive ‘punt’, and as an employer, I put a lot of faith, and effort (and money!) into recruiting the ‘right’ person for the job (whether office admin, or even management), and ultimately, a lot of the same-again settling them into the role, and trying to ensure we (and they) got the best out of them! I can tell you honestly, that for the first three years of running a company, I was by far and away the lowest paid member of the team, my view being that if we built a company with the right people, we would eventually grow and develop into a larger flourishing enterprise. Even with these factors, the amount of times I was confronted with people ‘jumping ship’ to larger firms, and even recruitment agencies actively soliciting my own staff…. I felt (OFTEN) that I was being held to ransom by my own workforce. Looking at the legislative & legal framework also, the balance is massively in favour of employees. As an employer, the amount of red tape necessary to minimise risk is overwhelming, compared with the amount of ‘loopholes’ which ‘blaim claim’ culture has created to allow ‘compensation’ for everything from a broken nail from a non-regulation coaster, to even cases I have seen from other business owners where even after dismissing someone for poor conduct, they have been faced with time-and-money-sapping-claims. The government often don’t help either, with many manufacturing enterprises and smaller retail businesses facing closure because of escalating regulatory frameworks, and (of course) minimum wage rises (don’t forget, that as much as minimum wage goes up, so do the other costs of operating a business, with market prices across the board for products/services not escalating proportionately!). The number of times, in this sense, I have seen otherwise healthy companies have to close because it ceases to become economical to employ their workforce? Ridiculous…. In many other countries, far greater subsidies and support are available to SME’s to employ and retain good staff across the board. What seems to be forgotten here is that the LIFEBLOOD of UK industry is the SME, with government and legal support given mainly to larger enterprises. And they wonder why “entrepreneurial culture” is dying off…

There is no doubt, that the world is becoming tougher, and more competitive every day with (particularly in the UK), the cost of living increasing in every sense. Aside from being harsh realities, these are the facts which [most] bosses have been confronted at some stage when a member of staff decides to leave for pastures new (typically pastures offering a better package). While I agree, wholeheartedly, that people should maximise what they make out of their own skills, I am often left gawping at the lack of consideration given to small business employers by their employees.

For larger companies, “HR” is an ongoing activity, with specialists (often in-house) paid vast sums to ensure the workforce is adequate in size, at the correct level of training and so forth. Given the number of people within the organisations, they can afford this kind of service, and have set tolerances on staff turnover and so forth, and usually carry a staff “buffer” to cope with these eventualities. Also, proportionately, larger businesses are typically able to offer much better salaries, and benefits, than their small business counterparts. Many investment banks, for example, start fresh-faced-graduates on well over £35,000 p.a!

Taking smaller businesses, they simply cannot afford these kind of services, and whether they choose to recruit through newspaper adverts (often costing £1,000+) or through agencies (often costing a LOT more), the net result is that they are, from the outset, taking a proportionately larger financial exposure. Similarly, once a new individual joins a typical small business (regardless of industry), the business may have training investments, and the investment of management time gearing the new member into the culture & role. These SME enterprises also (by their very size) are simply not able to offer the hefty packages of their larger counterparts.

The moral of my rambling-soap-box-esque piece this month really is an open request to those joining small businesses to stop and think about the risk and investment their employers are making taking them on, and helping them grow (regardless of level).

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