On October 1, three major pieces of employment legislation came into being.
Under the government’s new ‘common commencement dates’ – meant to make life easier for small businesses – new rules originating within the UK now arrive in two instalments every year.
It means that instead of having to track updates constantly, bosses focus on two ‘red tape days’ (the other is in April). Ministers say this will save you oodles of time and money previously spent wading through updated legal texts.
But changes to the Disability Discrimination Act and dispute resolution procedures, together with a hike in the national minimum wage, still managed to catch thousands of business owners unaware, forcing industry groups and accountancy firms to rush out articles alluding to the dangers of non-compliance.
In general, red tape remains one of the biggest business gripes – many of you complain that form-filling detracts from your core role of developing the business.
Summing up the environment immediately before the updates went live, James Walsh, head of regulatory affairs at the Institute of Directors, said: “More action is needed to get to the root of the red tape problem. We still need to tackle the proregulation mindset that pervades Whitehall and Brussels.”
But a growing number of you are responding to mounting piles of employment- related paperwork in a very simple way: paying someone else to deal with it.
The benefits
While still in a relatively early stage of development, the human resource management industry is evolving quickly. Businesses offering outsourcing services are developing new, more focused products; and many are exploiting niches in the market.
Years ago, smaller companies disregarded these services, in the same way that people shunned the emerging mobile phone market in the early 1990s. Back then, mobiles were a showy luxury to be enjoyed only by those with more money than sense.
But also like mobile phones, outsourcing has become a viable business tool, and increasingly, businesses that don’t count themselves among the world’s multinationals see it as a serious option.
“The main benefit is that it takes the pressure off,” argues Martyn Hart, chairman of the National Outsourcing Association. “There are so many regulations coming in from the government it’s hard for businesses to keep up, so putting it in the hands of professionals is more efficient.”
In theory, by handing HR responsibilities to an outside agency, companies can save time, stress and money – not just because someone else is doing all the work, but also because they will be au fait with ever-changing employment law and are better equipped to shield businesses from costly employment tribunals.
Outsourcing firms use economies of scale to maximise their appeal. They hire teams of dedicated experts to handle groups of businesses, which on their own could not afford to take on experts of the same calibre and experience.
“People want specific staff dedicated to the issues – someone they can phone and get a direct answer from instead of having to look it up on a website or in a journal,” says Steve Foster, general manager of HR outsourcing at Northgate.