It is inevitable that the world of work will have to change in response to Covid-19. We are already needing to change the physical set up of our workspace, but what do we need to do more broadly post Covid-19 to retain competitive advantage and come out of this unprecedented period more successful?
Whilst the vast majority of people are still employed in traditional full time jobs with one employer, we explore how a move towards creating a more atypical form of workplace may allow businesses to respond to the Covid-19 in a way that means they can become more competitive and successful. We will therefore be looking at the different types of employment contracts, the use of flexible working and home working as well ways to upskilling in this new world of work.
How Covid-19 is Affecting Business
Covid-19 has caused devastation across the world in so many ways. Over the last 5 months, businesses have had to close, operate at half capacity and have seen less customer demand. All of which has led to redundancies occurring and as warned by the Chancellor back in May, it is very likely the UK economy will face a significant recession.
Whilst the UK is effectively out of a national lockdown, we are seeing localised lockdowns occurring as a result of increased infection levels, and there is a real threat that these lockdowns will continue and become part of the norm whilst we await a vaccine.
For these reasons, businesses will need to re-build stronger and a crucial part of doing so, will be to look at the way they operate and manage employment practices moving forward.
Achieving Competitive Advantage
For an organisation, people are its biggest cost yet most essential asset. How employment practices are managed will be vital to its ongoing success.
The future world of work will see organisations who are trying to rebuild, fighting to secure the best candidates and candidates will want to seek out the best employers. Employers will also want to retain their employees to avoid further disruption.
One area to consider when rebuilding is to think about the Employee Value Proposition (EVP). An EVP is the unique set of benefits that an employee receives in return for the skills, capabilities and experiences they bring to the organisation. The ability to accurately define your own organisations’ EVP can enable you to effectively attract and retain the best talent.
Having an effective recruitment process as well as an employee retention strategy clearly aligned to the organisation’s vision and values will help the organisation to stand out from its competitors, which at this present time, when there is a competitive labour market you will want to do as much as you can to stand out.
What does the future world of work look like?
There is no doubt that the world of work will need to change. Businesses will need to adapt and become flexible to respond to the continued Covid-19 challenges and threats of further lockdowns. We will now examine what avenues are available that could help businesses rebuild and become stronger as we continue to respond to the pandemic.
Using Different Types of Employment Contracts
One way in which an organisation can become more flexible and be in a better position to respond to ongoing Covid-19 challenges, is by considering what type of contract of employment is best when hiring. Consider how you are best protecting your business as well as potential future costs. There are many types of contracts of employment that can be utilised:
• Open ended contract
Perhaps the most traditional, common type of contract. These contracts essentially offer “permanent” employment, either for full time hours, or part time hours, which would be specified within the contract. Where an employee is part time, pay, benefits (holiday, sick pay) would then be prorated based on their weekly part time hours.
• Fixed term (temporary) contract
These contracts last for a specific time, typically used either for specific projects, or to provide cover for long term absences, such as maternity leave. The employee would have the same employment rights as a permanent member of staff, the only difference being is that their employment is for a specified period, agreed in advance. The term “temporary contract” is sometimes used to refer to this type of arrangement.
• Annualised hours contract
Annualised contracts set out the number of working hours to be worked during a year, which means the hours worked are likely to fluctuate week to week, and month to month. It can be particularly useful where an employer has varying demands for their products or services over the course of the year, and so, the employees can be managed around business need. This type of contract will need a certain amount of planning in advance based around known predicted peak operating times. It is usual for a certain amount of the annual hours to be set out in advance, but then allow for a reserve period whereby the employee can be called upon, based on business needs. The employee will have full employment rights, just as somebody who is on a regular weekly hour open ended contract.
• Zero hours contract
This type of contract is for somebody who only works when the employer has work available, and so there are no specified or agreed set number of hours to be worked. It also means that when hours are offered, the individual is not obliged to accept. They only receive pay for hours worked. It is for an organisation to determine based on the circumstances whether the individual will be taken on as an employee, or as a worker. It is important that organisations have sufficient information to enable them to decide how to classify the individual and engage them under a zero hours arrangement as depending on how an individual is classified will determine their employment rights. There has been criticism of the zero-hour contract due to potential exploitation of vulnerable workers; however, they are also regarded as an essential flexible working option that helps the UK economy and those seeking work.
• Casual worker agreement contract
Casual workers are those who truly provide ad hoc work on an irregular basis; the organisation is not obliged to offer work, and the individual is not obliged to accept. Whilst they do not receive continuity of employment in between periods of engagement, they do accrue certain statutory entitlements during periods of work, such as a right to annual leave, the national minimum wage, right not to be discriminated against.
• Contractor (self-employed) agreement
This type of agreement enables you to buy in the services or skills of an individual directly, or through a separate company. They may also be known as freelancers. Individuals who work in this way are responsible for their own tax and national insurance but for the organisation buying in the services, it is vital they make their own assessment to determine if the engagement is deemed “employment” for the purposes of IR35 off payroll rules.
• Agency worker
This is to access resource via a 3rd party recruitment agency generally for short term, ad hoc, and sometimes urgent work. Employment rights of the agency worker are limited, and it will overall be the agency’s responsibility to ensure that their employment rights are protected, however after 12 weeks continuous employment in the same role, the agency worker is entitled to the same rights as permanent employees of the company.
Questions you will want to consider when determining which is the best contract to bring a recruit in on would include:
• Is there a short or long-term need for the role(s)? • Will you have sufficient work for committing to a specified number of hours each week • Are there peak periods across the year, conversely are you able to identify quiet periods? • Are their activities that can be fulfilled sporadically, short term and could be completed through temp work or for fixed periods of time? • Could it be more cost effective to buy in the services/skills for any activities?
Government “A plan for jobs 2020” Schemes
The Government have announced “plan for jobs 2020” scheme which will help both young people and unemployment levels. It will recognise that young people are the most vulnerable coming out of the pandemic due to lack of work experience as well as the long-term impact that unemployment will have on individuals and their families.
One scheme is the kick start scheme, focussing on helping young people find employment and it will fund the direct creation of high-quality jobs for young people. In addition, the Government has set out its plan to pay businesses to hire apprentices between 1 August 2020 and 31 January 2021.
They will give employer’s £2,000 for each new apprentice they hire under the age of 25 and £1,500 to employers for each new apprentice they hire who are aged 25 and over. We are waiting the detail behind these schemes, but these could be further options to help business move forward.
Business Resilience
HR Solutions explore additional avenues that could help businesses rebuild and become stronger as we all continue to respond to the pandemic. For further guidance on the employment practices listed below read the full article at https://www.hrsolutions-uk.com/future-of-work-new-employment-practices/
• Support flexible working
• Diversity and Inclusion
• Consider a 4-day work week
• Update your benefit offering
• Upskilling opportunities
Further HR Guidance
• Webinar Recording: you can watch the HR Solutions webinar called “Future of Work – New Employment Practices” on demand at https://www.hrsolutions-uk.com/services/future-of-work-new-employment-pr.... • HR Knowledge Base: as part of your PRCA membership you can get access to the HR Knowledge Base, which is the go-to resource for thousands of business owners and managers across the UK. The HR Knowledge Base includes HR documents, templates, legal updates, news and hot topic articles as well as access to free webinars and HR seminars. To find out more call 0844 324 5840 or visit www.hrsolutions-uk.com/members-prca.