Increasing number of SMEs need advice on employment law
Almost two thirds of SMEs seeking legal advice in the UK are concerned about terminating the employment of under-performing employees, according to a survey of 400 solicitors around the country. This particular issue topped the scale of most problematic legal challenges currently experienced by SMEs.
Almost two thirds (63%) of small and medium sized businesses seeking legal advice in the UK are concerned about terminating the employment of under-performing employees, according to a survey of 400 solicitors around the country. This particular issue topped the scale of most problematic legal challenges currently experienced by SMEs.
The research found that the second most prolific legal issue for small and medium sized businesses is making redundancies when restructuring their companies, with almost half of solicitors (45%) finding it one of the top three legal challenges business owners face. Selling their business is also an issue SME owners are concerned about, with 32% of solicitors citing it as an area they’ve advised on.
The main reason for SMEs finding these issues challenging, according to the research, is that in 85% of cases they don’t know or understand what their legal requirements and obligations are and 45% lack awareness of changes in legislation. In addition, 65% of SMEs often leave it too late to seek legal advice on compliance issues and 45% of them leave insufficient time to resolve legal matters due to other business pressures.
Chief Executive of QualitySolicitors Craig Holt says: “As an entrepreneur myself, I completely understand why the finer points of employment law may not be front of mind for people when they are starting a business, but failure to comply with legislation or taking cuts in the short term can prove costly to a company, and ultimately the profits, in the long term.”
SME Director Stacie Umbers, of Wharton Park Golf and Country Club, appointed a QualitySolicitors firm to avoid potential employment problems: “A company the size of ours does at times needs legal assistance and we asked QualitySolicitors Talbots in the West Midlands to advise us on some employment matters. This work involved putting together performance plans for our staff to help them through changes we were making to improve our company. As a result of the advice from QualitySolicitors we saw an improvement in the performance of our staff and more generally a better understanding of the company.”
Craig Holt agrees that taking pre-emptive legal advice is a smart move: “In this challenging economic environment when SMEs need to run efficient and effective businesses in order to survive and grow, it is more important than ever to make sure they have a clean bill of legal health. This means keeping on top of employment law and preparing in advance for difficult situations.
“As a starting point, SME owners who want to avoid costly legal problems should follow these basic rules:
- Consistency. Have consistent policies in place especially in disciplinary, grievance, equal opportunities and sickness. Follow those policies and ensure all key staff are trained on them.
- Recruitment. It pays to find the right person so make sure you recruit staff correctly and look after them by having a proper induction process and giving regular feedback on performance.
- Procedure. Ensure that the correct procedures are in place. E.g. it is a legal requirement that a new member of staff should have their employment contract within two months of starting.
- Training. Good training is essential. A lot of tribunal and personal injury claims relate to inadequate or lack of training so make sure it is provided, recorded and kept up to date.
- Communication. Talk to your staff, keep them informed and ensure that your company stays abreast of changes to employment legislation to avoid claims being made against you.
- Advice. If in doubt seek proper legal advice. The right information on how to implement employment legislation could help your business before it gets into trouble and save you money.”
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Notes to Editors:
This press release is based on research conducted by QualitySolicitors using SurveyShack, an online polling programme. Total sample size was 414 solicitors from QualitySolicitors branches. Fieldwork was undertaken between 18th - 23rd April 2012. The survey was carried out online.
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