What does Labour coming into power mean for your business?

After the turmoil of Covid 19 and the rate of inflation increasing, politics has had a heavy and costly impact on businesses across the whole of the UK. Now that Labour has come into power after 14 years of Conservative government, it is important you are updated with what this may mean for your business. 

Firstly, we need to know what is going on in the UK job market; permanent staff appointments continued to fall in July however, businesses have increased employee pay, arguably increasing the productivity of workers. Labour’s focus on social justice, workers’ rights and boosting the economy, could impact how businesses recruit and manage their company. As the availability of temporary and permanent staff increases, this leaves a high volume of demand for work. This is where Labour finds the opportunity to improve worker’s rights, creating more steps for employers and recruiters when employing individuals, potentially making it more costly when dealing with compliance. 

1. Increased employment rights and protections: 

Labour has historically prized worker’s rights and they have not let this go in 2024. 

• Heightened protection for workers: Labour’s ‘plan to make work pay’ aims to strengthen worker’s rights and clarity on hours and contracts; as recruiters this is crucial to stay updated to follow compliance accordingly. If not, this can become costly for businesses as fines can be given along with the reputation of the company. If you need more information on compliance, view our ACS HR (Human Resources) compliance guide. 

• Increase in minimum wage: Their goal to increase minimum wage further will become more costly for businesses to hire employees, this could lead to the increase of AI (Artificial Intelligence) use as hiring candidates increases labour costs. This will mean the large pool of available workers will remain unemployed if businesses cannot afford them. 

• Adapting the hiring process: the greater focus on equality may lead recruiters or employers to have to adapt their hiring process, having to consider inclusion standards. 

1. Adapting employment contracts: 

There has been a suggestion of banning exploitative zero-hour contracts and even compensation provided to employees if shifts have been cancelled; this on top of a higher minimum wage will increase the costs of employing an extra employee, especially if they cancel a shift. 

• Reduction on flexibility: Firmer enforcements on contracts to ensure the workers are protected may reduce flexibility that employees previously may have relied on. Recruiters will have to comply with contracts but also update candidates on the possibility that flexibility may decrease. 

• The working world is changing: The government believes that “giving workers the right to switch off is key to productivity and could boost economy growth”. The intention is to make sure workers' homes are not “24hr offices”. However, they have made it apparent they aware different businesses possess different job roles in which working hours and availability may vary. 

1. Increased regulation and compliance: 

For recruitment agencies and employers, increased regulation and compliance may mean the need for further training hours or stricter licensing requirements when placing candidates. 

• Remember to stay compliant: This can mean for recruiters, employers, and businesses they may need to update staff and themselves on the regulations for the near future. Although navigating the change may be difficult, here at ACS staffing solutions we pride ourselves for creating trust in our client relationships to overcome and adapt to the changes. 

1. The growth of public sector work: 

Labour governments typically focus on maintaining the standards of the public service such as healthcare, education, and emergency services. This will mean a surge in public sector jobs, which is an opportunity for recruiters to fill those vacancies. 

• Capitalising on public sector growth: this is an opportunity for recruiters to dip into the public sector, however this may take qualified candidates for public service roles from the position they are already in. 

Preparing for change: 

As recruiters and employers, we must prepare for the challenges that politics imposes on the working world. Managing the regulations and compliance may be the largest change, but it presents both challenge and opportunity. It may allow businesses to prove their relationship as employer and employee securely; if all actions are compliant this could improve employee retention. However, the future must be planned for, therefore budgeting for the impacts will help for the ever- evolving world of employment. 

At ACS Staffing Solutions, we understand the struggles this may impose on your business and its employees, if you have any further concerns contact us. 

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