Government needs to reduce the burden of employment legislation if it is to coax entrepreneurs into hiring new staff, the Forum of Private Business (FPB) has warned.
The FPB claims that the impact of the latest rise in unemployment – which increased by 140,000 in the three months to September – will cause longer lasting damage to the economy unless the regulatory barriers to employing staff are significantly reduced for small firms.
Research published by the FPB last month found that 61% of its members saw employment law as a ‘significant’ barrier to growth, with 18% seeing it as the main barrier. Further research shows more than 90% of the FPB’s members are concerned regulation has increased over the past year and 86% expect it to rise again over the next 12 months.
The FPB’s chief executive Phil Orford said government needs to heed its warnings – before it’s too late.
“The FPB has repeatedly warned the government that introducing ever-increasing amounts of employee legislation would prove to be unsustainable, and the true impact on small firms has been revealed during this economic downturn.
“Employment laws are supposed to protect workers, but are in fact a major factor preventing entrepreneurs from taking on new staff,” he concluded.
© Crimson Business Ltd. 2008