Keep calm and carry on: Responding to Labour’s new workplace reforms
A dos and don’ts checklist for hiring managers
As outlined in the King’s Speech last month, Prime Minister Sir Keir Starmer’s new government intends to bring forward a number of far-reaching labour reforms during their first year in power. Enhanced workers’ rights, getting more people into work, making age band adjustments to the National Minimum Wage, forming a new Industrial Strategy Council and transforming the country’s approach to skills and training via Skills England are just some of the initiatives which have grabbed headlines.
How should I respond?
For those wanting some practical, ‘starter-for-ten’ advice on what they can do now in response to the new government’s legislative reforms, we’ve assembled this preliminary checklist of suggested dos and don’ts to inform workforce planning over coming months.
Why? Because this stark choice is already evident: Employers can either adopt a ‘wait and see’ approach to Labour’s new legislation (which would see hiring rates further plummet during the second half of this year) or make some early, strategic bets now based on what we already know of the PM’s reform programme and inject some much-needed dynamism into an otherwise stagnant economy and jobs market.
In a nutshell, when it comes to recruitment activity over coming months, the joint advice to employers from ManpowerGroup, the Recruitment and Employment Confederation and the Association of Professional Staffing Companies is: Keep calm and carry on.
This remains an evolving story and the government’s legislative priorities may change. Individual businesses also have different needs. As recruitment experts, all three organisations are committed to providing you with the latest guidance on the evolving legislative landscape and will update this list as further information about Labour’s new legislation comes to hand.
“The direction of travel for this new government is becoming clear when it comes to bolstering innovation, productivity and growth across the UK – but how, and how soon, will we get there?” observes Michael Stull, Managing Director for ManpowerGroup UK. “The recruitment industry is no stranger to workplace reform and legislative uncertainty – it’s not like we haven’t been here before. So, I suggest businesses ignore the fear-mongering favoured by some post-election and instead double down on workforce planning. Employers need to keep going. There’s no time like the present to start getting forensic about the skills, staffing models, technology and infrastructure needed over the next 6-12 months to unlock the growth of their organisations, the potential of their people and the future prosperity of our country.”
Shazia Ejaz, Director of Campaigns and Research at REC, adds: “The new government’s wish for a partnership with business to achieve greater economic growth is providing the scope for us to emphasise to policymakers that different ways of working support the economic and social development of the UK. And we are making it clear to government that reforms carefully done and not rushed can improve the daily lives of workers while helping firms grow. While changes to employment rules are inevitable, our consistent message to the Labour party in recent years is that the more it engages with labour market experts such as recruiters on these policies, the more chance of them working and thereby helping their mission to grow the economy.”
Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo), said: “The professional recruitment and staffing outsourcing sectors are familiar with legislative change both here in the UK and across their international operations. Although the changes proposed under the Employment Rights legislation and particularly the one status of “worker” review have the potential to be wide ranging in scope, the Government is well aware of the importance of the independent contractor workforce both to the public sector and to growth in the private sector. They have made it clear to us they will continue to take our advice into consideration when drafting the new laws and regulations and this is an opportunity to define the professional self-employed in law. Now is the time for employers to review their processes around onboarding, off-boarding and managing the performance of their flexible and permanent workforces, thinking more strategically about their headcount planning. APSCo and OutSource members are experts in workforce change management, helping their clients navigate complex commercial demands. In order to deliver the growth the economy needs it is important that businesses continue to look positively at opportunities.”
THE CHECKLIST
DO’S
DO read Labour’s Plan to Make Work Pay. If you haven’t, then here’s a summary. This is the blueprint for Labour’s legislative agenda. You can use this as a starting point to understand potential impacts and opportunities for your business.
DO take heart from the latest CFO data from Deloitte. Business confidence, risk appetite and growth expectations are all on the upswing, postelection. Plus, both interest rates and inflation are coming down. Our current mood: Cautiously optimistic.
DO remember that eight-in-ten UK employers remain unable to find workers with the skills they need. Devising a skills development strategy for moving current employees into higher value creating roles and enhancing your EVP to attract the best available talent now is an investment in future productivity and growth (both short-and long-term).
DO ignore some of the more sensationalist commentary about the implications of Labour’s proposed changes to Day One workers’ rights and ending ‘exploitative’ Zero Hours Contracts, as examples. Do an audit of where, when and how you’re currently deploying personnel – all with the aim of increasing efficiency and productivity. Investing in a comprehensive workforce planning audit now will likely increase business agility and see you better prepared for flexibility discussions (if needed) down the track.
DO revisit your performance management processes. Do you have SMART goals, clearly defined/understood KPIs and reporting processes across your business? A timely review now will help ensure your performance management processes are well set-up to accommodate potential future workplace legislation.
DO look across the complete spectrum of available staffing solutions. Alongside traditional permanent and contingent labour options, RPO, SoW, MSP and hybrid options – or any combination thereof – could increase agility, productivity and delivery for your business.
DO remember to take a moment and BREATHE. This is the biggest exercise in change management the UK workforce and wider economy has seen in a generation. All UK employers will be seeking solutions to both challenges and opportunities as they arise. We look forward to seeing further detail regarding the government’s proposed consultation processes and timelines, so that businesses, industry bodies and unions all have a voice in shaping the new legislation, its implementation and oversight.
DONT’S
DON’T panic. Whilst the King’s Speech outlined the new government’s initial priorities, everything won’t become law at once. This is likely to be a ‘phased’ series of legislative changes over the next five years.
DON’T adopt a ‘wait and see’ approach to Labour’s workplace reforms. This would see hiring rates further plummet during the second half of this year and lead to further economic stagnation. The UK is in danger of talking ourselves back into recession, otherwise.
DON’T delay – there are skills shortage remedies available now which can be explored. The recent launch of Skills England brings the welcome promise of greater flexibility with the apprenticeship levy, but it’s going to take 9+ months to set up. Act sooner, rather than later, we suggest.
DON’T succumb to knee-jerk responses like implementing mass sackings, making over-the top probationary changes and/or implementing a hiring freeze. These could have disruptive – and unintended – consequences for both your current workforce and employer brand.
DON’T fall victim to negativity. Yes, there will be challenges associated with Labour’s reforms, but there will also be opportunities for employers and workers alike over the next five years. We all need to keep moving forward – together.
DON’T assume that you can only meet your staffing needs in the way you currently operate. As the examples opposite indicate, other options (offering flexibility and efficiency) are available.
If you have any questions regarding the recent election results or would like to discuss how these changes may affect your business, please do not hesitate to reach out.
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