HR Planning for an uncertain future

Practical steps to consider in readiness for Brexit – whatever the outcome!

No-one really knows what is going to happen with Brexit, deal or no deal? Extension or no extension? Whatever happens you can of course only really influence those things within your control and therefore to help you make a start on planning I have prepared a list of steps I recommend you take, from an HR perspective, to prepare for possible outcomes in an uncertain future.

These are of course also good from a ‘housekeeping’ perspective and therefore regardless of the Brexit future you will not be wasting your time in taking some time to think about the following.

1. What are your payroll costs now, and what are they likely to be next year?

In many businesses, payroll is the largest outgoing each month, and if not, the largest it accounts for a large proportion of outgoings. With this in mind, do you know what your costs are every month? What your break-even point is? i.e. the point at which you can cover the wages and other bills?

Once you have calculated this add 4-5% to the amount, in order to account for increases in National Minimum Wage which will inevitably increase in April next year. How will this impact your business? Are your staff on or near the National Minimum Wage? Will you have to increase all staff pay to ensure that pay scales remain in place? What will be the impact on your break-even amount?

Another thing to consider is whether your other costs will increase in or after April 2020 if your suppliers decide to increase their charges to take into consideration increase in their costs for wages? What do your commercial contracts say? Do you have fixed terms with them? Now may be a good time to lock in a fixed price or deal.

2. How quickly can you make changes to staffing, reductions and redundancies if costs become too high?

What are your contract terms with staff? Do you have flexibility to make changes or reductions?

Do you have a contractual redundancy procedure or collective agreement concerning redundancy that you are required to follow? Will this impact on the time it would take to make cost reductions?

Do you have HR personnel/managers in place who could deal with the redundancy procedure if necessary?

This would hopefully be a worse case scenario but at least if you have planned and looked at what you will need to do and how long it will take, you will know what timescales you have to make decisions. If reducing costs of staffing is critical to the survival of the business, you do not want to have any delay or even worse find that you have lengthy procedure to follow.

It is important to remember that if you are making redundancies of 20 to 99 employees the consultation must start at least 30 days before any dismissals take effect. 100 or more redundancies means that the consultation must start at least 45 days before any dismissals take effect.

3. Identify and make a list of all EU Nationals employed. Make contact with EU staff and seek to provide reassurance and/or discuss possible options to support in the future. Keep in touch with EU staff as matters progress with Brexit.

There are many businesses in the UK who rely on employees from other EU Nations to fulfil critical roles in the business, and therefore it is important to take steps now to actively retain them within your workforce.

As a very minimum you should understand how many EU Nationals work for you, and how many of your workforce may be married to, living with or in a relationship with an EU National. In my view this is important for understanding which employees may have concerns or worries, and also to ensure that you can take active steps to plan for the future.

As well as providing reassurance to employees I strongly recommend that you consider what you would do in the event that your EU staff leave. How will you replace them? Where will you fill that gap from?

4. Review job roles and descriptions – are they correct? do you need to update or amend?

In the event that you need to be agile and make reductions in staffing or changes to your business it will make your life easier if everyone has the correct job title and description. There is nothing worse than trying to make changes or redundancies and finding that everyone’s job description is out of date, or worse still, an employee’s understanding of their job role is completely different to yours!

Now is a good time to look at this and make it a priority to review and update (it is also good housekeeping to do this periodically in any event).

5. Who are your critical / key staff? What are the risks of them leaving in the next 6-12 months or longer?

Do you have a process or procedure in place to ensure retention of key staff? If not consider implementing.

On the flip side to the need to make reductions is a very real possibility that there will be a significant shortage of people to undertake work for your business. On the one hand you have skilled and experienced roles that businesses are already struggling to fill and on the other you have a lot of minimum wage jobs that are hard to fill such as labouring, cleaning and caring (to name a few).

It is possible that due to reduced migration and current resident EU nationals leaving the UK, that there will be a shortage within the workforce.

Therefore it is important to understand who your critical staff are, and even if you do not employ EU nationals, you may find that your competitors or other businesses are looking to fill gaps in their own workforce and will be looking at poaching your experienced and skilled staff.

What would you do if a critical staff member left the organisation? How long is their notice period? How quickly can you fill the gap? Do you have a strategy for attracting skilled staff? How would you get by for a period if you could not recruit a replacement?

Conclusion

These are just a few things that you may wish to consider and form part of your housekeeping and/or business contingency planning, and in the event that it is just “business as normal”, you will not have wasted your time as these are all steps that will assist you in being a great employer and better business in any event.

My passion is to help employers and business owners to be the best employers they can and therefore if you want to be the best employer in your industry drop me an email to arrange a no obligation discussion and quote. Email: [email protected]

This article was written by Alison Colley, Solicitor and Director at Real Employment Law Advice.

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.

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