Spring Statement: HR and business responses

Business and employment groups have expressed concern that the Spring Statement today did not do enough to promote growth and skill development, but rather added costs and regulations to employers.

Ben Willmott is the head of public policy for the CIPD. He said that while the announcements of increased funding for the construction and defence sectors are welcome, “no recognition was given to the need for more support for employers”.

He added that the government had been quick to increase costs and regulations for businesses, through national insurance increases and the Employment Rights Bill. This has created clear challenges and additional costs for employers.

The government must now show that it is willing to work with employers in order to overcome these challenges and increase productivity. This will help to boost business investment and training.

It’s important that the government consults with employers about key measures in the Employment Rights Bill, which are yet to be finalised. This will ensure they do not have the effect of increasing costs and risks of hiring staff.

If the government wants more people to work, there has to be jobs available for them. “It’s vital that employers don’t feel discouraged by new regulations from hiring employees, especially those who may need additional support.”

‘Anti-business rhetoric’

Neil Carberry is the chief executive officer of the Recruitment and Employment Confederation.

The Chancellor has been right to emphasize this today. “Economic growth is a result of private sector success, which generates the income needed to fund jobs, taxes and our public services,” said Mr. Hennessy.

The upcoming increase in employer’s insurance, antibusiness rhetoric from certain parts of the government and concerns about new, impractical employment regulations are all anchors for business confidence.

Carberry called on more progress to be made in reforming the Apprenticeship Levy, which would ease bureaucracy and burden for employers. He also called for “proper partnership work” that could support the labour markets and unlock growth.

Doug Rode said that employers will be evaluating their hiring strategy in light of the increased costs.

He said that now is the time to make sure every hire is strategic. Not just filling in gaps due to immediate pressures but also securing talent for the long-term.

“As a consequence, holistic talent strategy will be at the forefront, as business leaders focus on hiring as a group rather than by team. It will open up opportunities for hiring cross-functionally, as overlapping skills can bring versatility and value.

Employers should also look at creative solutions to their talent needs. This can help reduce overall costs. “Temporary contracts may be a more cost-effective option than permanent hires for project-based positions.”

Welfare reform

David Williams, Towergate Employee Benefits’ head of group risks, commented on the reforms of the welfare system. He said that the government should focus its attention on the 2.8 millions economically inactive people who are out of work because of ill health.

“The welfare reforms that were announced last week did not just reduce benefits, but also included investments to help people start working, stay at work or return to work while retaining their benefits. “All crucial initiatives to kickstart an inactive populace,” he said.

“The message for businesses should be the exact same. Invest wisely in your employees’ welfare if your business is slow. “You may not see immediate growth, but in the future you will reap the benefits.”

Rebecca Florisson is the principal analyst for the Work Foundation, Lancaster University. She said that the controversial reforms may cause instability in the lives of disabled people.

She said: “On one hand, freezing the level of benefits and restricting access will result in a short-term savings, but with a high human cost. The DWP estimates that 250,000 additional people, including 50,000 kids, will live in relative poverty by 2029-30, as a consequence of these measures.”

It’s especially concerning that the government intends to cut PIP, which could actually undermine disabled persons’ ability to maintain employment. In 2023, one in six recipients of the payment was employed. This is important because it helps disabled workers stay in their jobs.

“Much depends now on the success or failure of the additional government investment in employment assistance. It is important to connect people with disabilities who wish to work, with well-paid and secure employment. If we fail to act, the standard of living for already vulnerable people will be eroded.

Skills gaps

In today’s announcements the government announced that it would launch an initiative to train up 60,000 additional skilled workers.

The additional PS100million will be used to fund 35,000 construction bootcamps and the PS40million for up to 10,000 new construction foundation apprenticeships.

The government has ambitious plans to invest in defence and artificial Intelligence, creating jobs.

Dominic Holmes, principal of value and strategy for software company Cornerstone cited data showing that 55% employers do not fully understand the skills gaps they have, leading to an increasing “workforce ready” gap.

He said that identifying the most effective strategies for bridging this gap was not easy and required more than just a one size fits all mindset.

Many companies invest in their employees’ training by partnering, certifying, and mentoring them. But these methods overlook the industry-specific requirements and, most importantly, how each employee learns best.

AI is not only the key driver for change in the workplace, but it’s also a solution. It can identify skills gaps, create personalised growth programmes, and provide workforce insights and data to help organizations upskill.

Tax evasion clampdown

Rachel Reeves, the Chancellor of England and Wales, announced that HMRC would be tackling schemes which allow workers to pay lower tax than what they should. Matt Fryer of Brookson Group – a provider of compliance and services for flexible workers – said that he hopes this will put an end the schemes that have plagued market for years.

He added: “But it would disappoint me if the result was a heavy-handed approach to enforce compliance by recruiters and contractors.” HMRC has consistently targeted these businesses despite their complexity.

Crawford Temple, CEO at Professional Passport, said HMRC should tap into their data to crack down on tax avoiders.

“HMRC has a goldmine full of data which could have destroyed tax avoidance schemes many years ago. Yet they choose to fiddle their thumbs.” HMRC, he said, has created a tax-evasion playground by failing to cross-reference intermediate reports with real-time payroll information.

“Sluggish enforcement mechanisms have turned what could have been an exact surgical intervention into a wide-spread compliance crisis. The economy suffers as a consequence.”

HMRC has been watching non-compliant parasols flourish for years while continuing to launch consultations. Tax dodgers thrive in every moment of hesitation. “The time for analysis has passed – it’s time to act now.”

Employee Experience

Mark Williams, the managing director of WorkJam for EMEA, reminded employers to not forget about the importance to retain valuable employees, while attempting to achieve efficiencies.

He stated: “The UK’s biggest retailers expect an additional PS7bn in annual costs as a result the NICs increase, along with increases to the National Living Wage. Businesses will try to cut costs by stopping recruitment campaigns and making redundancies. This will only damage the economy.

While all businesses are trying to do more with less resources, it’s important that they use tools that protect employee experience while driving productivity. The technology can be a key tool in this process, as it allows businesses to automate and use self-service tools for flexible scheduling.

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