Email a collegue.| Headline: | SMEs hit by increasing financial burden of employment legislation |
| Description: | 7 June 2005 - Exactly half of SMEs in the UK believe that recent changes to employment legislation, with regards to maternity, paternity and disability rights, have resulted in additional costs in the day-to-day running of their business.
This is the verdict of research out today conducted for the Tenon Forum**, an independent think tank made up of leading entrepreneurs from the UK’s small and medium-sized business community. As businesses grow, in terms of both turnover and staff numbers, it is recognised that employment legislation increases the financial burden. Forty per cent of organisations with 5-9 staff members say that employment legislation had caused them to incur additional costs in the daily running of their business, but this rises to 57 per cent of organisations with 10-199 staff, and 68 per cent for those with 200-499 employees. Fifty eight per cent of companies with a £1-5m turnover said that recent employment legislation had resulted in additional costs, rising to 79 per cent of firms with a turnover of £20m+. Richard Kennett, Chairman of the Tenon Forum, comments: "Overall, 49 per cent of SMEs say they haven’t incurred extra costs yet, but further changes in legislation will increase employers’ costs over time and businesses should be prepared for this. Entrepreneurs start businesses to make a profit; if it becomes difficult for them to do this because of legislation, then this will affect the level of job creation, which helps no-one. Most employers know it is in their interest to develop a long term and mutually beneficial relationship with their staff." Across the regions, SMEs in the South West feel the financial burden of employment legislation most acutely, with 61 per cent of firms saying that they had incurred costs because of it. SMEs in London, South East and the East of England were least likely to see it as a problem, but despite this, four out of ten SMEs (44 per cent) in these regions feel that their businesses have suffered financially. Half of all SMEs in the Midlands, 47 per cent of SMEs in Scotland and 48 per cent of SMEs in the North East and North West said employment legislation had caused them to incur costs. Kennett continues: "On the whole, the businesses we work with think employment law is probably the most complex and far-reaching area of all the legislation and regulation that applies to them. It is arguably more complex than tax, health and safety and the regulations of the Financial Services Authority. It is inevitable that, with legislation this complex, there will be associated costs for SMEs." This research was conducted following a DTI consultation on proposals made in the 2004 Pre-Budget closed on 25th May 2005. This looked at: > Extending maternity pay from the current period of six months to nine months by April 2007; > Looking to extend it to 12 months’ paid maternity leave by the end of 2009; > Introducing a new right for mothers to transfer some of their leave and pay to fathers; > Possibly extending the right to request flexible working to parents children aged over 6. |
| Date: | 17.06.2005 |
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