For many people January is the time for personal fitness goals, but it’s important for businesses to make sure they stay healthy too. Against a backdrop of increasing employee costs and future changes to employment law (including the much talked about Employment Rights Bill) many businesses will be considering what they can do to stay fighting fit in 2025.
To help your business to thrive in 2025, we take a look at a key question that’s on the minds of many employers – I’m worried about rising costs in my business, is there anything I can do from an employment law perspective?
Assessing your ongoing staffing needs
This will enable you to identify whether you have and will continue to have the right number of employees to meet the needs of your business going forwards. For many businesses, staffing will be at the right level, and it will be neither possible / desirable to operate with fewer employees with no savings to be made on headcount . However, if you identify that you are overstaffed, for example because of a reduction in demand for products or services, you may have a redundancy situation. If you think this may be the case in your business, please get in touch to discuss your circumstances before taking action as redundancy can be tricky. It’s important to make sure you not only have what is considered in law to be a genuine reason for redundancy, but that in most cases, a fair redundancy process is also followed.
Consider if you have flexibility regarding pay awards
Most businesses are only too aware of the increases to National Minimum Wage rates that are taking effect in April, and it will come as no surprise that where an employee is entitled to such an increase it must be paid.
But what if your business is one that pays its employees in excess of National Minimum Wage requirements? You may have some flexibility regarding what pay-rise, if any, to give to employees this year. Where there is flexibility, increased financial pressures are likely to see more businesses looking very closely at their bottom line, with some giving consideration to alternative ways of rewarding / motivating / retaining employees.
If you are thinking about pay rises in your businesses, as a first step you should check your employee’s contracts of employment and your business’s custom and practice in this area to identify what, if any, flexibility your business has. For example, are your employees contractually entitled to a pay rise in 2025, (e.g because you have contractually guaranteed them a percentage increase such as a cost of living pay-rise), are pay rises discretionary or are employees contractually only entitled to a pay review and not a rise? If employees don’t have a contractual right to a set pay rise of some kind, don’t forget to check what your business’s past practice has been to ascertain whether an employee could have an argument that they have an entitlement through custom and practice. Unsure what the position is in your business regarding pay rises and flexibility or want to talk through your plans? Get in touch to discuss your situation.
Review employee benefits
If your business is feeling the pinch you might want to review employee benefits to identify whether they still work for your business and your employees. If you are providing benefits you will want to make sure that they fulfil their purpose and are what your staff really want so you are getting value for money. In some cases, there may be a cheaper alternative that employees would prefer e.g extra holiday instead of free gym membership which is hardly ever used (except in January!). If you want to understand what your staff really want in terms of benefits, a simple way of finding out is to conduct a staff survey. That could help to inform your approach going forward.
It’s important to bear in mind that if you are looking to end / change a contractual benefit employee agreement will usually need to be sought. If this is a step you are considering it’s vital to get in touch for advice on your situation and the steps to follow so you can make informed decisions for your business.
Need help with a HR matter, please get in touch.