We are very honoured to have Emma Spandrzyk of Keelys Solicitors share this guest blog with us. Her piece addresses some of the key insights many of you will have been thinking about when it comes to IR35.
I have recently joined Keelys in the employment department. I have been working as an employment solicitor for 9 years and, most recently, I have worked in-house for the police.
Some of our clients have been asking us about changes to the law on IR35 next year so we’ve taken some time to explain some os what is happening.
What is the current position?
If someone works on a self-employed basis but, in reality, they are an employee, HMRC can recover the underpaid tax and national insurance from the organisation that they work for.
Sometimes, the individual will set up their own personal service company to provide their services. If HMRC decides that the arrangement is a sham and that, if the individual was engaged directly by the client, they would be an employee, HMRC can recover the underpaid tax and national insurance under IR35. Currently, that is recoverable from the individual and/or their company rather than from the end-user. The exception to that is in the public sector, where the end-user will be liable for the tax and national insurance.
What is changing?
From April 2020 businesses with more than 50 employees or a turnover of more than £10.2m will be affected by the new rules. They will, therefore, be liable for tax and national insurance if they are found to be engaging people through personal service companies who, in reality, ‘are’ employees. If your business is smaller than that, you do not need to worry although we would not be surprised if, in future, these rules apply to smaller companies as well.
How to tell if someone falls within IR35?
If you are a larger business who will be covered by the new rules, the first step is to identify the contractors that provide their services through personal service companies.
To assess whether contractors fall within IR35, businesses will need to look at a range of criteria including the following:
- Control – how much autonomy does the contractor have in terms of how they deliver their work? If the business retains full control over how, when and where tasks are completed, this is indicative of employee status and the contractor is likely to be caught by IR35. If the contractor has full autonomy over the completion of tasks, they are more likely to fall outside the scope of IR35.
- Personal Service – does the contractor have to undertake the work themselves? The ability to send a substitute helps point towards a contractor being genuinely self-employed and outside the IR35 rules.
- Mutual Obligation – is there a requirement for both parties to continue to offer and accept work? If the business has an obligation to provide work and there is an expectation that the contractor accepts it, then this will indicate that the contractor is caught by IR35.
As part of the assessment, businesses should also consider factors such as the degree of integration that the contractor has with the business, the level of financial risk they assume and who provides the contractor’s work equipment.
What does this mean for your business?
Businesses will need to show HMRC that they have taken reasonable care in undertaking their contractor assessments. When reviewing assessments, HMRC will look at the size of the business. The bigger the business and the greater the resources available to it, the more effort HMRC will expect in relation to the process.
There is a useful tool on the HMRC website that you can use to assess whether someone is genuinely self-employed or should be treated as an employee:https://www.gov.uk/guidance/check-employment-status-for-tax
Please let me know if you would like further advice on this, which will be covered under your subscription to our Employment Healthcheck Plan. You may also want to speak to your accountant for advice on whether you are taxing staff appropriately.
If your onboarding programme focuses on getting your new team member up and running as quickly as possible, you’re missing a trick. Staff are at their most motivated when starting a new job. An effective onboarding process not only helps to keep this motivation high but maintains and reinforces it.
The impressions made during the early days with your organisation also have a lasting impact on your new hire’s perception of your employer brand. So setting up a welcoming and effective induction is key to making the most of this time for your new team member and your business.
What is Onboarding?
Onboarding new employees shouldn’t be treated as a tick box exercise. It’s a valuable opportunity to show new hires that you value and respect them and to help them understand your organisational culture and how your business works. For many people, starting a new job can be a nerve-wracking time, and a simple onboarding plan can make all the difference to easing them into your organisation.
It’s also a good opportunity to set expectations on both sides: employees need to be clear on what’s expected of them and your managers need to understand what motivates their new employee so they can get the best from them.
Onboarding is also sometimes called ‘induction’ and it refers to orienting an employee with their organisation and socialising them with their new colleagues. Done well, onboarding programmes prevent employees from leaving their role early and helps them to put their best foot forward delivering return on investment more quickly.
Inductions should also extend beyond the first few days or weeks – your onboarding plan should introduce someone new to what they need to do and how they need to do it. And it also provides an opportunity to assess performance and provide feedback using a structured approach.
Who Needs an Induction Programme?
Every employee, no matter their seniority or hours, needs an induction programme. Certain groups will need different support, for example graduates will need different information than those returning from career breaks or more senior staff. One size won’t fit all so it’s worth creating a range of onboarding programmes that will meet different populations’ needs.
What Your Onboarding Programme Should Include
Before you create an onboarding plan, it’s a good idea to consider any areas other new hires have found difficult to navigate, like jargon and acronyms. Then change your programme so these issues no longer exist. Here are some ideas about what the core of an onboarding programme could look like:
- Share communications and information about events
- Provide clear instructions for their first day like the person to ask for at reception and start time
- First day:
- Warm welcome including a welcome pack
- Introduction to the team and ways of working
- Facilities and IT should be ready for the individual to use and payroll already set up
- Tour round the offices
- Clear job outline/requirements and how the role supports organisational goals
- Organisational culture and values
- Health and safety and compliance training
- First week:
- Meeting with senior key employees
- Product and services overview
- Current projects, processes and supporting technology and documents
- Review of total reward and associated policies
- Review of processes like booking holidays and claiming expenses
- Detailed expectations for the first month, quarter and (potentially) year
- First month:
- Development opportunities and career management
- Ongoing performance feedback
- First quarter:
- Probation discussion to advise on performance and confirm if probation has been passed
To carry out an effective onboarding process, managers should expect to set aside plenty of time to spend with their new team member. You can also buddy your new employee up with another experienced team member to show them the ropes and share the onboarding load.
Why Businesses Should Bother With an Induction
A well-designed onboarding programme helps employees integrate into their team and, with clarity about their role and how it links to the organisation’s objective, ensures they quickly become productive, working to their highest potential.
Employee turnover is often best avoided, but this is particularly true within the first 90 days. That’s because your organisation has invested money recruiting and training you new hire and it’s unlikely that they’ll have been able to cover these costs as they won’t have had long enough to deliver meaningful results.
A good onboarding programme helps retain staff which means organisations will:
- Support employees during this difficult period
- Save time and money on recruiting a replacement
- Reduce wasted time for the person giving the induction
- Boost morale for other staff
- Mean the unproductive early learning curve of the new hire won’t need to be repeated
- Boost their employer brand
- Reduce turnover and absenteeism
- Increase employee motivation, commitment and job satisfaction
Although it might sound like a lot of effort to create a range of effective induction programmes, retaining new hires will easily offset any cost. According to research from Oxford Economics, hiring a new employee to replace someone who’s left costs on average £30,000. Which makes an investment in your onboarding process money well spent.
For support developing your organisation’s onboarding programme, contact Crosse HR today on 0330 555 1139 or at firstname.lastname@example.org.
Successful businesses rely on having the right number of people with the right skills to bring in the business, do the work and make money. At the same time, employing people also means ticking all those employment law boxes. Combining your legal obligations with where your business is heading is the key to great HR planning. As we reveal in this blog.
Factor in Legal, Tax and Fiscal Changes
When planning ahead you need to be clear about the immovable objects – the legal changes you must tackle and include in your planning. Employment law, tax and statutory payment changes tend to be introduced around April at the start of the new tax year.
Rates – like statutory maternity pay, tax thresholds, national minimum wage and statutory sick pay – are amended and will need to be factored into your budgets and processes. You can find this information on the government’s website which is updated each year.
It’s also worth being in the know about employment law changes in advance so you have plenty of time to prepare. Typically, updates will have a long lead-in time so you have plenty of time to prepare. Keep an eye on HR industry blogs, like this one, for details about new rules your company will need to abide by. Then factor them into your HR plans.
Be Clear on Where the Business is Heading
With your legal obligations clearly mapped out, it’s time to turn your attention to your business’ goals. They will provide the context for your HR plans. For example:
- Business growth – could mean new roles, redistributing work between individuals, increasing people’s hours, upping overtime or taking on additional headcount
- Business slow down – stagnant GDP growth might mean your business needs to tighten its belt. Perhaps you need to reduce headcount or ask your staff to increase productivity. However you decide to do more with less it will impact your HR strategy.
- Business stasis – if your business is neither growing or shrinking, there’s still a lot you can do. Tightening up on people processes, developing your team to ensure you future-proof your business and finding ways to positively impact the bottom line are all possible with good HR planning.
Anticipating your future HR needs should also look beyond your immediate situation and be based around economic and technological changes as well as what your customers will need in one, three and five years’ time.
With your legal and business priorities clear, you can now identify your HR priorities. You might decide to go for some quick wins first or tackle those issues that are causing you the most pain.
Alternatively, complete tasks that will add to the bottom line: this should create additional revenue that could be fed back into the business. Reinvesting in your people is one option that frequently drives even better business results.
Choose the Right HR Strategies, Systems and Providers
With a solid understanding of your current and future people needs, you can start choosing which areas of HR to dedicate the most time and resources to. If you anticipate significant talent gaps, training, recruitment and performance management strategies should help. Or, if your business is facing a tough time, a restructuring programme could be the key.
Getting this right is critical to the health of your business so if you don’t have sufficient HR support, it’s worth investing in an experienced HR consultant to provide expert advice and practical help.
Part of your HR planning should include a review of the systems you have in place to support your plans. There’s a wide range of HR technology available that:
- Makes it more efficient to administer your human resources
- Provides options for employees and managers to process standard requests like holidays
- Keeps track of employee data and gives you insight into your workforce with online reports
So, if spreadsheets aren’t cutting it any more, it could be time to consider going digital with your workforce administration.
Communicate Your Plans
Once you’ve firmed up your plans and put timescales, resource and budget to your changes, it’s time to communicate with your team. Start with leaders first to get their feedback and input if you’ve not already done this. Then roll out your plans to staff. Be prepared to answer questions like:
- What’s in it for me?
- Is my job at risk?
- Is the business stable?
- Where is the business heading?
- Will you provide training to help me adapt?
If your planned changes are significant you might want to hold face-to-face town hall meetings backed up by written communications including FAQs. Where changes are more incremental, cascading communications through line managers is a good approach.
With your HR plans in place, you might think you’re done for the next twelve months. But my experience tells me you’ll need to keep on top of any changes that the business and your people face. Combining annual planning with this level of flexibility will mean you’re ready to take care of any human resource issues that come your way.
Get your HR plans squared away with pragmatic, adaptable HR support from Crosse HR. Get in touch on 0330 555 1139 or at email@example.com.
Over the past few decades, lifestyles have become more flexible and people are able to differentiate in their choices about practically everything. This isn’t just a consumer trend: businesses have also become wise to the fact that their employees all have different needs that need to be catered for.
This has resulted in organisations taking a more individualistic approach to benefit provision.
In this blog, we explore what flexible benefits are, why they’re a popular choice and how your business can implement and get the most from them.
What Are Flexible Benefits?
All organisations provide employee benefits which are usually determined by grade. In most instances, the more senior the role, the more valuable the benefits package. Depending on seniority, core employee benefit packages, where the benefits are paid for by the employer, typically include items like:
- company car
- private medical insurance
- critical illness cover
- long-term health cover
- health checks
In addition, employers also often voluntary benefits like think discounted gym memberships, dental insurance and household or holiday insurance. Employees can choose to take up these products voluntarily, paying for the benefits themselves, usually out of their pay.
This approach is fine if the core benefits on offer meet every employee’s needs. But what if your employer provides a company car but you don’t drive? Or you’re already covered on your partner’s private medical insurance so you don’t gain any advantage from this benefit? Or you don’t have any dependents but your employer insists on providing life cover any way?
When benefits aren’t suitable for employees, companies are paying for benefits that aren’t used or they’re providing an unappetising benefit offering to their staff that fails to engage.
Flexible benefit programmes provide a solution to this problem. Instead of offering standard benefit packages in the usual way, flexible benefit packages enable employees to vary their pay and benefits to meet their personal requirements.
In most schemes, staff can retain their existing salary while selecting the right mix of benefits for them. Or they can adjust their salary up or down by taking fewer or more benefits.
Let’s look at some examples to explore how this works:
- A single employee rejects the family private medical insurance cover they’re entitled to due to their grade and opts for single cover only – they receive the cost difference in cash
- Someone who doesn’t take all their holidays each year chooses to sell five days holiday and uses the saving to take up family private medical cover with the rest taken as cash
- An individual who doesn’t drive forgoes the company car benefit and takes the cash instead – they use it to buy more holiday and take up dental insurance and gym membership
These are just a few examples of the sorts of flexibility flexible benefit schemes can offer. However, not all programmes will be this flexible; some employers decide that their staff must take a certain level of benefits (usually items like life cover or other insurances) as a minimum. And there are other considerations, like minimum pension auto-enrolment contributions, that need to be worked into the scheme.
How Many Companies Use Flexible Schemes?
According to Aon, just 12% of employers operate flexible benefit schemes. Which is surprising given research from Willis Towers Watson which shows that:
- 66% of employees who are offered choice in their benefits report their benefits meet their needs
- 30% of employees who are not offered choice in their benefits report their benefits meet their needs
However, the answer could lie in the perceived challenges associated with setting up and running a flexible benefit scheme.
What to Consider When Setting Up a Flexible Benefits Programme
There’s a lot to think about if you want to set up a flexible benefits scheme in your organisation:
- Online or paper – this might work for smaller businesses or those where staff don’t have access to computers. Otherwise online options, although more expensive, tend to offer ease of use and greater flexibility.
- Choosing benefit options – it’s easiest to transition your existing benefits to a flex scheme before expanding the options available. You’ll need to decide which benefits must be selected or whether you want to allow a more flexible approach.
- Keeping schemes up to date – every change in your benefits, tax and legislation must be reflected in your scheme which involves additional work in terms of configuring scheme rules, calculations and systems (if online).
Although each of these sounds fairly straight forward, flexible benefit schemes can quickly become complex and require technical decision making which requires HR specialist knowledge.
However, the pay off could well be worth the effort as flexible benefits help organisations stand out in the recruitment marketplace. And they can also be a powerful tool for retention as your benefit package will meet the needs of every segment of your workforce, regardless of life stage.
There’s a lot to think about if you want to set up a successful flexible benefits scheme, so consider working with a seasoned HR consultant to ensure you deliver legally and secure a great return on your investment.
For flexible support with all your HR projects, get in touch with Crosse HR on 0330 555 1139 or at firstname.lastname@example.org.
With more people living longer, the workforce contains a higher proportion of older workers than ever before. And this demographic trend is only going to continue with one in five of the UK population expected to be 65 or older by 2030.
With pension pots failing to provide people with the retirement they want, more people are working longer. However, many people over the age of 50 are at risk of leaving the workforce early. And not always because they want to.
With many businesses struggling to recruit due to high employment rates, it’s time to consider hiring older workers and all the benefits they can bring.
The Challenges Faced by Older Workers
Older workers are generally considered to be people over the age of 50. However, in some industries served by younger people – think fashion retail or hospitality – older workers could be thought of as anyone over the age of 35.
According to the Centre for Ageing Better, staff over 50 face age discrimination when applying for jobs or trying to progress their careers. They are also:
- more likely to be stuck in low paid jobs
- feel most insecure about losing their jobs
- less likely to be offered opportunities for development
In fact, only 25% of employees aged 50-59 and 22% of those aged 60-69 felt their employer encouraged them to take up learning and development opportunities. This is a significant drop compared to 44% of 18-39 year-olds and 32% of 40-49 year-olds.[Text Wrapping Break]
With older workers forming an increasing part of the workforce, it’s time for employers to change their perspectives and understand what the over 50s can contribute.
What Older Workers Bring to Your Business
Older doesn’t mean worse. In fact, many of the UK’s key industries rely on more mature staff. Take farming. The average age of a UK farmer is 59. These people bring years of skill and expertise to their jobs. And the country remains well fed and is able to export meat and other produce because of their work.
There are plenty of other benefits that come with hiring older employees:
- They’re less likely to leave than their younger counterparts – saving you time and money when it comes to recruitment and training.
- They’ll understand your ageing customer base better – as the population ages, it’s not only workers but customers who will be getting older. Having employees who are the same age as your customers, who understand their needs and can talk to them on an equal footing will bring major benefits to your business.
- Diversity brings additional advantages to your wider team and business – and that includes age diversity. Think fresh perspectives, knowledge sharing, new ideas and improved problem solving.
There are also benefits to the economy as employing more older workers will contribute to tax revenues offsetting some of the costs associated with an ageing population. If everyone in the UK worked one year longer, GDP would increase by 1%. Which can only be good for the economy and, by proxy, your business.
Managing Older Workers
Hiring older workers may be easier in some locations than others due to the demographic makeup of the area in which your business is located.
Cities tend to have larger populations of younger people whereas older people often move away from urban areas. So, if hiring over 50s sounds like a good option for your firm, you might need HR support to attract and retain the right people.
But it’s not just recruitment that you’ll need to consider. Think about adjusting your workplace practices to create an age-friendly culture that appeals to all generations.
A key practice that cuts across all age groups (although for different reasons), is flexible working. For older workers this could mean giving people the opportunity to work from home, condense their hours or work part-time or in job shares. These options will allow them to:
- achieve better work-life balance
- carry out caring responsibilities
- manage health conditions
- wind down to retirement
Making flexible working practices available to all staff is a certain way to engage your people, whatever their age.
For older workers you might also need to consider making changes to:
- Work tasks – heavy lifting could be a no-go for some older people but judge this on a case by case basis
- Training provision – ensuring everyone in your team is up to speed with how you work will deliver best return on your compensation and benefits investment
- Technology – not all over 50s are behind the technology times but you might need to invest in technology training to ensure your latest recruit is up to speed. This could mean introducing formal training sessions or learning on the job by being buddied up with a colleague.
As skill shortages worsen and the working population ages, hiring older workers will be a necessity for many businesses. The workplace imposes barriers on every individual and all employees, no matter their age, have their individual strengths and weaknesses. Your challenge as a business owner is to find out where your staff need support and where you can make the most of their existing expertise.
Attract, hire, engage and retain staff of all ages with expert support from Crosse HR. Get in touch today on 0330 555 1139 or at email@example.com.