Work force management for the retail and leisure industry
How business friendly are the coalition Government.
After years of watching the Labour government add additional employment costs and red tape, the retail industry was hoping for a more pro-business approach from the coalition which was, after all, elected on the back of promises to build an economy for jobs and cut red tape. Nearly two years on and with the retail industry still suffering from the effects of the continued economic slowdown many of Shopworks customers are complaining about the sheer weight and cost of regulation that this new government is imposing on the industry. From where I sit this government’s agenda for employment regulation and passing the cost of social care onto the employer is no different to the previous Labour government and the industry should be speaking up about it.
We help shops, bars, restaurants and others that employ hourly paid staff with their staff rotas and payrolls and we are making a lot of changes to our “Work Force Management” system so that our rotas automatically account for all the changes the government is imposing. We have access to large amounts of pay data and are in a good position to estimate the impact of the changes the coalition government has imposed on employers. Having spoken to our customers about these issues the cost of these changes to the retail industry is worrying; and not just the small independent but for the larger operators as well.
Although most small employers seem to be focussed on the increase in employers national insurance this is only one of several changes that hit in 2011.
National Insurance went up in April from 12.8% to 13.8% which will cost up to £30 for a shop which opens 70 hours and needs two staff per shift or around £1,500 per year. This tax increase is from a government which when in opposition described National Insurance increases as a tax on jobs. In addition to this headline grabbing increase, 2011 saw a raft of new changes which added both to the staff costs and the administrative load in the retail and leisure industries.
April was a busy month; all parents with children under 18 were given the right to request flexible working hours and at the same time all employees were given the right to make a request in relation to study or training.
These requests for leave were on top of additional paternity leave and pay which allows fathers to benefit from up to 26 weeks of additional paternity leave if the mother returns to work without using up her allowance. April also saw a 3% increase in statutory maternity, paternity and adoption pay as well as statutory sick pay.
October 2011 saw a second batch of regulations and costs come our customer’s way and forced Shopworks to upgrade our Work Force Management systems. The default retirement age was scrapped and rules came into force to ensure that agency workers are given equal treatment, including pay and holidays, after 12 weeks on a contract. Also in October the minimum wage rose by 2.5% to £6.08, add in the employers NI and it has gone up from £6.68 per hour to £6.92 an increase of 24 pence or 3.6%.
The coalition also announced that it is looking at a couple of other changes in 2011. It has announced that it intends to introduce a new system of flexible parental leave because, wait for it; “it believes leave options for families are too rigid”. The Government has also announced that it intends to extend the right to request flexible working. These changes if they come in will be in addition to the changes to the same rules which were made in 2011 and which I have mentioned above.
We are also preparing our Work Force Management systems for substantial changes to pension law which will be another big cost to the sector. New regulations mean that between 2014 and 2016, the retail and leisure industries will have to begin automatically enrolling staff into a pension scheme. By October 2017, workers will have to contribute at least 4% of their pay to a scheme, with employers paying in 3% and the Government topping this up with 1%. We believe this could add around £3,000 to the cost of operating the same “70 hour per week, 2 staff shop” each year as well as the administrative burden that will come with a new pension regime.
From where we are sitting it certainly doesn’t feel like the coalition is pro-business and it certainly isn’t cutting red tape or the costs of employing people, quite the opposite. The decision to consider further changes to parental leave and flexible working at the same time as they have implemented changes, which many small businesses believe are too expensive, shows just how far the government has lost touch with employer’s needs. Not only will this add to costs when the second round of changes come in but red tape will increase and systems will need to be changed shortly after they have just been upgraded for 2011. At Shopworks, we will of course make sure our Work Force Management system complies with all these regulations so our customers can run keep their costs as tight as possible and let our system take care of the red tape.