A Guide to Employing Executive Staff

In a small business, hiring your first member of staff is an important step which some first time entrepreneurs approach with trepidation. Once that first time is under your belt you become more confident, and might even get blasé about. But how much more difficult it is when you want to bring in a number two or a finance or marketing director. You want people with skills to complement your own, and you may be way out of your comfort zone.

The Planning Stage

Because these are crucial roles, you need to get it right from the word go. It’s therefore important to plan how to go about the recruitment process, know what you want to find out and how you will approach it well before you start.

First you need a succinct job description, so take your time over it if at all possible. Before you finalise it, do some networking. Talk to other people who do the hiring as well as people who have been hired for the type of role you have in mind. Now you can advertise the post.

Selecting the Right Applicants

Your first experience of those who respond might be on the telephone, or more likely on paper. This will be either a CV or information from a recruitment agency. Again this stage should not be rushed as you need time to peruse and consider all the detail in front of you. Which candidates have the skills, training and experience you believe will equip them for the role? When you decide on the ones you will interview, make notes for each person to help you to probe further into what you have read.

The Interview Stages

At the first interviews you have to make judgements about whether they can do the job as well as you need. Lead them into discussing what they can bring to the role. You need to be sure that their skills will be a good fit.

From the discussion, is it clear they have done some homework to find out about you and your company? That could demonstrate the level of commitment you want. Now consider their personality. Will they fit in well with your team? Do they have the right balance of authority and willingness to listen and learn? Do you actually like them?

Sometimes there is a clear winner at this stage, but you may find you still have more than one possibility. If so, you should invite them back for another interview. You could set them a task or some homework to do in the meantime.

You could always bring a second person to join you for the interviews, if you have someone appropriate whose judgement you can rely on. It doesn’t have to be an inside person. It could be a spouse or a mentor or friend, perhaps someone from your local bookkeepers. The final decision, of course, will still lie with you, but you will have the view of someone else to help you make it.

The ‘Gig Economy’ – a Guide for Employers

A new buzzword in the business world is the ‘gig economy’, but do you know for sure what it means? Some people think it just refers to being able to use websites such as People per Hour where you place your bid for services offered. Others give it a much wider application as if it refers to using any freelancers for specific projects.

Gig workers may be used at any level of an organisation. Alex Swarbrick is a senior consultant at Roffey Park, an institute which claims to ‘develop people who develop organisations’. He believes that gig workers fall into two distinct groups.

“You can characterise the workforce in this model like an hourglass,” he says. “So the people at the top comprise highly-skilled, sought-after talent that is relatively well paid and expects to work flexibly. Workers at the bottom end of the hourglass, however, are likely to be on temporary, fixed-term, zero-hour contracts and have a number of jobs that could be characterised as insecure, low-paid work.”

How Can you Get the Best People to Give Value for Money?

Entrepreneurs frequently use freelancers when they need help temporarily, so are probably more used to avoiding the pitfalls than many a large HR department. Sometimes though, they can still be managed more effectively whatever the size of your business. So here are some aspects to deal with that you may not have considered before:

• What will attract the right gig workers to be available for you if at all possible when you need them? Having relevant contract terms and conditions, rewards and benefits will go a long way to making yourself an attractive employer.
• Staying in touch with people you will want to come back for future projects and keeping them in the loop as much as you can.
• Managing the risks of using people who might also work for your competitors from time to time.
• Keeping tabs on quality control to get the best value from outsourced workers.
• Making sure they are aware of all relevant legislation and operate within the law.
• Integrating them comfortably with any permanent staff you have. The last thing you want is any resentment on either side. 

How Can you Keep all Staff Happy?

Co-operation between permanent and temporary staff is essential so you must do all you can to ensure it. It’s worth remembering that even workers of longstanding can become bored and unproductive unless they have a bit of variety in their days, and operate in a culture of give as well as take.

Bearing all this in mind, you should have no problem in getting the most advantage from the gig economy. Your local bookkeepers will be glad to advise and assist if you need help with contracts or managing the finances. They might also have the contacts to help you find the best people for a particular job.

Time to Update Your Display Screen Equipment Risk Assessments

Pretty well any time you buy new business equipment, you need to produce a new risk assessment. Work stations, which comprise equipment such as desks, chairs, monitors and other display screens, are no exception.

Changes in Screen Technology

Display screen equipment has seen exceptional technological development in recent years. Gone are the fat, bulky monitors that used to adorn our desks and take up so much space. Flat screens are the norm, and even these can mean change of posture for the users or more strain on the eyes because the screen is further back on the desk.

Stand-up desks have also been recommended by Public Health England, because it’s not so good for people to sit at a desk for a whole day, as many workers have been used to doing. Desks can be at variable heights these days, and how they should be used is important for your well-being and productivity, and that of your staff.

In some fields it’s common to have wide format screens, with a number of applications on show at the same time. Similarly, people can work with multiple screens, but they have to be further from them so they can see everything without having to keep turning around. How might that affect the eyes, or put greater strain on the neck or back?

Changes in Communication Technology

Laptops are also a feature of the modern office, but they can be much more difficult to use comfortably over long periods of time. Your risk assessments will need to cover how to mitigate the problems with connected keyboards and mice; you can even connect a larger separate display screen if it helps.

Do you allow your staff to bring their own devices to use at work? Perhaps you supply them with a mobile or a tablet for personal as well as business use. When you use a touch screen device, you are just as much at risk of repetitive strain injury as anyone using a keyboard.

If your risk assessments don’t take all these eventualities on board, it’s high time to review and update them. If you need help for this, your local bookkeepers may be able to assist, or point you towards appropriate professional help.

Shared Parental Leave – the Story so Far

One year after the introduction of shared parental leave for parents of babies born on or after 1 April 2014, surveys on take-up were undertaken. Reports in the press declared it to be very poor, but it seems they got the wrong end of the stick.

What the Surveys Said

My Family Care and the Women’s Business Council questioned HR directors from 200 companies and found that around 1% of men had requested and been granted shared parental leave. But this was a percentage of all men employed, and only 10% of both the men and women employed had had a baby since April 2015. In fact, 24% of these women and 30% of the men who were new parents had taken shared parental leave.

In another survey by Totaljobs, out of 628 respondents, 86 became parents in the qualifying time. Among these, 21% were ineligible to take shared parental leave, while 31% took it. In both cases, this was considerably more than was reported in the press.

Are the Surveys Representative?

However, Mark Crail, content director at XpertHR, said the research should be taken with a pinch of salt. Not only were the samples particularly small, there were other factors to be taken into consideration.

“If the 30% figures are correct then take-up has been higher than expected – it’s good news, not the shock-horror story that much of the media has been running about these research findings,” he said. “The problem is many employers simply will not know whether or not men are eligible for shared parental leave unless and until they apply. If someone’s partner has a baby and they choose not to tell their employer, they won’t show up in the records. That makes it extremely difficult to get a good overview of what’s really happening.”

Why Parents Don’t Apply

There are clearly still barriers to taking shared parental leave. Many people just can’t afford it, especially if their employers are unwilling or unable to top up the statutory pay awarded. Among men, the culture of their organisation may discourage it, and both men and women are sometimes fearful that their careers would suffer. Some women and men said that they believed that women prefer to be the main carer of their children. A lack of awareness about shared parental leave also seems to be a problem.

In small businesses, shared parental leave may be seen as yet another burden for the employer and affordability is bound to be a problem. If you have any questions about shared parental leave for your staff, your local bookkeepers will be happy to advise you.

How the EU Referendum will Affect Small Businesses and Employers

June 23^rd 2016 is when the UK public will vote on whether or not to remain in the EU. If the result of the referendum is to leave, the government must notify the European Council. There will then be a two year period of negotiations before we can finally exit. Not until then will we know what kind of relationship we will have with EU countries or whether we can still have access to the single market. It is therefore difficult to predict the effect of a withdrawal on small businesses, but various people have suggested a number of scenarios.

The referendum date was decided after the Prime Minister had negotiated an agreement with all other EU countries to a package of reforms in the event that we vote to stay in. These reforms include an exemption from ever closer union and a four year ban on in-work benefits for EU member immigrants. Critics felt the high levels of immigration would not be reduced and Brussels would still retain unacceptable levels of power.

The Need for Information

After the referendum announcement in February, the Federation of Small Businesses (FSB) published research which found that, of 4000 small businesses polled, 42% had not decided how to vote. Most did not feel at all well informed. Members were asked what they needed more information on: almost half mentioned the economic impact on the country; 38% wanted more detail about the administrative load of regulation compliance; 33% wanted to know more about the cost of EU membership.

Mike Cherry, policy director at the FSB, said, “It is crucial that once appointed, both the ‘Remain’ and ‘Leave’ campaign groups tackle this information deficit. Smaller businesses want to know the practical impact that remaining within or leaving the EU would have on their firms.”

Will There be a Level Playing Field?

Another poll conducted by major accountancy firm, Moore Stephens, of nearly 500 owner-managed businesses found that 17% had already made their minds up that they wanted to leave the EU. This was mainly because they were concerned about “the excessive bureaucracy associated with EU trading regulations, especially in the food industry, and also because of the prospect of tax reductions which could benefit business," according to Mark Lamb, a Moore Stephens partner.

He also said, "Owner-managed businesses are concerned that future growth will be disproportionately hit by a UK exit as they would no longer compete on a level playing field in the EU. Economic and political uncertainty is already impacting trade for some SMEs, and there is a fear that leaving the EU could severely destabilise business growth in the long-run. Small businesses currently benefit from unrestricted access to the large European market and many could find increases in tariffs and potential trade restriction difficult to overcome, stifling international growth potential."

The Effect on Employers and Employees

In recent years, many small employers have found it hard to comply with EU regulations on workers’ rights. Our own government has recognised the difficulties and sought to alleviate them by, for example, increasing the qualifying period for unfair dismissal from one to two years, and capping the compensation that could be awarded. In 2013 it introduced a cost on applications for employment tribunals.

The TUC is therefore encouraging its members to vote to remain in the EU. Its general secretary Frances O’Grady said: “Working people have a huge stake in the referendum because workers’ rights are on the line. It’s the EU that guarantees workers their rights to paid holidays, parental leave, equal treatment for part-timers, and much more. These rights can’t be taken for granted. There are no guarantees that any government will keep them if the UK leaves the EU.”

Who to Believe

Meanwhile the Chancellor is making a very gloomy forecast about the economy if we leave, with everyone paying heavier taxes to keep the country going. Boris Johnson, MP and Mayor of London, who backs the exit campaign, appeared on our TV screens to tell us that this is totally wrong and we have a great future ahead of us if we leave.

Unfortunately no one seems to have definitive answers about what will happen if we leave. Entrepreneurs are, by definition, optimistic and eager to turn all eventualities into opportunities. Many of them will look to their local bookkeepers to help them ensure that their small businesses, with or without employees, will be prepared for whatever comes next.

National Living Wage: Common Questions Answered

Each time new regulations are introduced, they throw up many questions that need to be answered to be sure of compliance. On 1 April 2016 the national living wage (NLW) of £7.20 per hour became the minimum amount that employers could pay workers aged 25 or over. Here are our answers to some of the most commonly asked questions about this.

When did the NLW have to start?

On the first day of the pay reference period that fell on or after April 1^st.

What does not count towards the NLW?

To be sure that the NLW has been paid for any pay reference period, you should not include the following elements in the calculation: 

•  Employer pension payments
•  Repayments of expenses
• Benefits in kind
• Shift premiums
• Overtime
• Advances of wages
• Loans

When all these elements have been excluded, the worker should be paid a minimum of £7.20 per hour for every hour worked. The gross amount calculated can include bonuses, commission and incentive pay.

How should holiday pay be calculated?

You should include any regular overtime undertaken as well as a worker’s normal or average working hours when working out holiday pay.

Must I pay the NLW to apprentices who are over 25?

Yes, unless they are still in the first year of their apprenticeship, in which case the relevant band of the national minimum wage still applies.

What happens when a worker turns 25?

He or she will not be eligible for the NLW until the first day of your next pay reference period. They must be paid the NLW for the period following their birthday.

When will the NLW next increase?

The government intends to review all the statutory minimum wage rates to introduce any changes by April 1^st each year, beginning in 2017. The NLW rate will gradually increase until 2020, when it is intended to have reached £9 per hour.

How does the NLW apply to those paid a fair piece rate?

If they are over 25, these workers are eligible for an additional 20% on the normal NLW. You should pay them £8.64 per hour.

How will the NLW be enforced?

The consequences of not paying the minimum rates that apply could be financially crippling and are designed to be a good deterrent to non-compliance. An HMRC compliance officer can order an employer to pay any arrears to the workers and pay a fine of 200% of the underpayment for each worker. Serious cases may be criminally prosecuted, in which case there is no limit to the fines that can be imposed following a guilty verdict.

The questions listed above are those that are most commonly asked. If you are not clear about any of the answers, or have other queries, your local bookkeepers will be happy to help. 

Two Important Insurance Policies Businesses Think They Have (But usually do NOT have)

It is a legal requirement for any company that employees staff to hold employer’s liability insurance, and no doubt there will be numerous other policies you hold as a business owner. But do they cover every area for which you need protection?

For example, do they cover the effects of cyber-crime? Are you covered for the cost of acquiring cover staff if someone is off work due to an injury? If it happened at work and was due to negligence, your employee liability cover might kick in, but what if it happened outside of work? If you are a sole trader who does not need employee liability cover, what would happen if you had an accident and suffered injury yourself?

Traditional insurance policies rarely include all these eventualities. Fortunately, you can still get the cover you need through specialist insurance policies. Cyber risk and key worker injury insurance plans are available to all businesses, whatever their size.

How to Cope with the Effects of Cyber Crime

Most organisations have no option but to rely heavily on IT that can be adversely affected by viruses or hacking. It is a sad fact that despite all efforts at protection, breaches of data security and successful cyber attacks are still happening in the small and medium business community, as well as in major companies and private sector bodies. The effects can be wide ranging and devastating, from financial penalties and specific extra costs, to loss of business and reputation.

The only way for you to have true peace of mind about this is to cover all potential risks with specialist insurance.

How to Protect a Business from the Effects of Accidents

In a small business, losing a member of staff for a sickness period following an accident can make an enormous difference to productivity. Unless someone else can do the work, in extreme cases you may be unable to fulfil orders and get a reputation for letting customers down. Whether the accident occurred at work or in the employee’s own time, there may well be heavy costs that are not covered by your liability insurance.

With the right insurance plan however, these costs can all be covered. And you could be able to arrange for the best health care and rehabilitation therapies, all covered by your insurance policy, to get your worker fit and back on the job in the shortest possible time. Everyone can benefit when this happens and it will do wonders for the morale of your whole team.

Your local bookkeepers are likely to have experience of these types of policies and will be able to direct you to a good insurance broker, so it’s worth getting their opinion on what you need and where to go for it.