Small businesses could be offered HR vouchers to help with workplace reforms
Small businesses could benefit from free HR guidance as part of a proposed government initiative aimed at helping employers adjust to changes under the employment rights bill.
The Department for Business and Trade is reportedly considering offering businesses vouchers to be used on external HR services, according to a report from City AM.
These vouchers could help smaller employers – many of which do not have dedicated HR teams – manage the contractual changes that will be required as a result of the government’s proposed workers’ rights reforms.
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The employment rights bill has been described as the “biggest shake-up in UK employment law in more than 30 years” and is now in its final stages of its passage through parliament. Among the laws proposed in the bill are new rules on flexible working, a ban on zero-hours contracts and day-one rights to unfair dismissal.
A Department for Business and Trade spokesperson said the government will “continue to work closely with employers to ensure new laws work for them”, adding that the Small Business Strategy – set to be published later this year – will give them the “tools they need to grow”.
CIPD head of public policy Ben Willmott said the professional body had consistently made the case that small firms would need support to adapt to the changes proposed in the employment rights bill, and was pleased the government was looking at options for investment.
“We’re keen to work with the government to develop the best way of supporting SMEs, using the expertise of the many thousands of CIPD-qualified, independent HR consultants who are ideally placed to help support SMEs to comply with the provisions in the bill as they become law,” he added.
Importance of supporting small firms
The vast majority (99.8 per cent) of UK businesses are classified as small or medium sized, according to the Department for Business and Trade, and they employ 16.6 million people.
However, research from the Federation of Small Businesses highlighted widespread concerns over the impact of the employment rights bill. A majority (92 per cent) of small businesses were worried about the reforms, while 67 per cent expected to scale back hiring as a result of the proposals.
More than half (56 per cent) also said they would cancel or reduce investment and expansion plans because of the measures in the bill.
Many small businesses do not have a dedicated HR team, which can make it challenging to ensure compliance, according to Chris Garner, managing director of HR consultancy Avensure.
A lack of legal knowledge can also make small companies more vulnerable to employment disputes and tribunal claims, Willmott added.
Garner welcomed the proposed voucher scheme, which he said would address the “critical need” for HR expertise within small businesses as the employment rights bill comes into force.
“By providing access to expert guidance, the scheme could ease the transition to new regulations, ensuring compliance while reducing financial and operational strain,” he added.
Michael Doolin, CEO of consultancy Clover HR, agreed, saying that, for firms operating on tight margins, the proposed scheme could provide a “lifeline” allowing smaller businesses to focus on growth rather than complex legislation.
However, he warned that the scheme’s success would depend on ease of access and how well it met industry-specific needs. “Effective delivery could reduce legal risks and administrative burdens, fostering fairer workplaces for all, but generic advice may not suit everyone,” he said.