Sage Blog

It’s that time of year again.  In October, a couple of changes will be applied to UK employment law that will affect every business in the country.

But don’t panic. Although these changes could make a big impact to your employees, your responsibilities are minimal. We’ve covered the basics here, but for our Sage People Advice customers you can always call us for more detail specific to your business.

Firstly, the national minimum wage (NMW) rates will increase on 1 October

That means you’ll have to pay at least:

• £6.08 per hour for workers aged 21 or more.
• £4.98 per hour for workers aged 18-20.
• £3.68 per hour for workers aged 16-17.

You’ll also need to pay any apprentices who are under the age of 19 at least £2.60 per hour, as well as those aged 19 and over who are in the first year of their apprenticeship.

If you provide any workers with accommodation, the accommodation offset will be increased to a maximum of £4.73 per day.

The second change - is a big one.

From 1 October 2011, the Agency Workers Regulations 2010 will come into effect.

These regulations give agency temps a right to the same basic working and employment conditions as they would have had if they had been directly employed by the hirer to do the same job.

An agency temp will have to work for a qualifying period of 12 weeks, in the same role, with the same hirer, before they are entitled to equal treatment.

Occupational social security schemes, such as company pension schemes and occupational sick pay, are not included in basic working and employment conditions.

What’s more, all agency temps will be entitled to certain rights from the first day of an assignment, including access to canteens, childcare facilities, car parking and the right to be notified of permanent vacancies.

So what do I do?

Now you’ve got this information, you’re ahead of the game. Make sure that you start planning now to ensure you can make these changes to your business in plenty of time.

In terms of agency workers, it will be the resourcing agencies that have the bulk of the extra administration.

It’s a good idea to get in touch with your agency now to make sure you both have everything you need to start October without a hitch.

Matt Forrest, Small Business Team

Sage People Advice: For help with any areas of HR, Employment Law and Health and Safety for your business, contact our Sage People Advice team on 0845 111 2450. Alternatively, for a one off consultation, why not call our Pay As You Go team on 0844 8877 999

Parts of London and other major UK cities have been affected by rioting and criminality. Many businesses were looted, damaged or totally destroyed during the period of violence. Our Sage People Advice team have put together some useful advice to help businesses affected.

As many business owners survey the damage in the aftermath, we’ve broken down the advice you need in terms of paying employees and receiving compensation.

Do I need to pay employees if they can’t return to work?

If your business is open, you’re not obliged to pay an employee if they can’t or won’t come to work due to the violence, unless their contract of employment specifically states that they are entitled to salary under those circumstances.

However, unless there is a contractual clause within your contract to allow deductions from salary, any withheld payments could result in an unlawful deduction from wages claim.

Depending on your employees’ contracts, you can take the following options:

• Advise your employees that any time off work in these circumstances will be unpaid.
• Pay them on a discretionary basis, but only in exceptional cases.
• Ask them to take the time off as paid annual leave.
• Pay them as normal, but ensure that they make up the lost time.

If you can’t open your business due to damage, your employees are still entitled to be paid for that day.

Am I insured against looting?

If you’re in any danger whatsoever, you should never try to protect your building or property. Your business premises insurance should provide cover for fire, looting or any damage caused.

Most commercial insurance policies will cover you for damage to your premises, including the interruption to your business as a result.

Some policies will also cover those businesses which are not damaged, but whose trade will be affected by the aftermath.

Contact your insurer to check what you are covered for and arrange for immediate help if needed.

What if I’m not insured?

The Prime Minister has confirmed that an 1886 law, which allows insurers to pass on some of the cost of riot-related claims to the police, will apply, with the Government ready to make up any funding shortfall.

In addition, under the Riots (Damages) Act, uninsured businesses can seek partial compensation from the police.

The Government will also:

• Set up a £20million support scheme to help businesses get back up and running.
• Enable local authorities to grant business rate relief, by funding at least three-quarters of their costs.
• Defer tax payments for businesses in greatest need.
• Stop liability for council tax and business rates for the most seriously affected businesses.

If it’s likely that your business won’t open for a substantial period of time, and you can call our Adviceline for further advice and guidance.

If you need further advice on this or other HR, Employment Law and Health & Safety advice can find out more about our Sage People Advice service on 0844 8877 999

The Sage People Advice Team

As part of our Sage People Advice service we keep our customers up to speed with HR, employment law and health and safety advice. One of the top topics with our customers lately has been the changes in paternity rights and what they need to do to make sure they tick all the boxes.

Matt Forrest, Small Business Team

Paternity rights; what’s changed?

Recently, paternity rules changed, meaning that new mums can transfer, or donate, some of their maternity leave over to the child’s dad (or the mum’s partner).

If you have any eligible new dads, they can potentially take up to 26 weeks’ additional paternity leave, on top of the two weeks’ ordinary paternity leave they are entitled to, after the birth or adoption of a child.

They’re also entitled to additional paternity pay, if the mother (or other adopter) has returned to work with at least two weeks of their statutory maternity or adoption pay outstanding.

How will this affect my business?

At this stage, it looks like the number of dads who actually request additional paternity leave (APL) or pay will be quite low. Remember that this extra right can only be taken instead of their partner’s maternity leave: she’ll have to return to work.

However, it’s still a good idea for you to prepare for the possibility of this happening: if any expectant fathers tell you that they want to take APL, will you be ready?

For instance, you’ll have to make sure that you have the resources ready to cover any male employee’s APL, just as you would for maternity leave.

To make sure you’re not discriminating against anyone, you’ll also need to make sure that your maternity packages are matched by your paternity packages.

Likewise, as with women on maternity leave who have the automatic right to “jump the queue” for a suitable alternative job in a redundancy situation, men on APL can now enjoy the same right.

Dads on APL also have the same right as women on maternity leave when it comes to keeping in touch days: make sure you offer them this opportunity.

What do I need to do now?

In addition to preparing for any APL requests, there are practical things that you can do now. If you haven’t already, you should update your maternity policy, your paternity policy and any related documents and forms to reflect these changes.

Matt Forrest, Small Business Team

Sage People Advice: For help with HR, employment law, Health & Safety advice for your business contact our Sage People Advice team on 0845 111 2450.

No matter what size or type of business, from a high street florist to a multi million pound engineering company, your biggest asset is your people. Your people are critical to the success of your business and at Sage we follow these rules from getting the right employment law and HR advice, to building trust.

Rule 1 – Get the right people on the bus

Start as you mean to go on. Recruiting the right people with the right skills is essential. Set yourself up for success by deciding on the exact type of candidates you want to attract and settling for nothing less.

Rule 2 – Teamwork

It’s no use hiring talented people if they won’t work as team. Employing people who fit your culture can be just as important as hiring those with the right skill set. Some people may not suit the atmosphere and feel of your business and it can affect motivation and productivity. Consider introducing candidates to the rest of the team informally to see how they get on.

Rule 3 – Ask if you have the right people in the right places every six months

Every business goes through periods of evolution and change. Sometimes it’s organic, but sometimes you should make changes to increase your business’ effectiveness. Are any talent gaps forming, or are someone’s skills not being fully realised?

Rule 4 – Create the right framework and your team will be self-organising

Set clear goals and ensure each individual has a job description and knows their role, and the role of other teams, within the business as a whole. How they interact is crucial in your overall efficiency.

Rule 5 – Empower your people

Give your people the tools to do the job themselves. You’ve hired them for a reason and they will often appreciate your trust in them to fulfill their role. That said, always let them know they can come to you with concerns.

Rule 6 – Clear the route for your people so they can do their job

Take the time to ask your people if there are any issues stopping them from achieving their potential within their roles. Ask for honesty and be prepared to make changes if you need to.

Rule 7 – Trust

Open and honest discussions with your team can get the best out of everyone. If you’re facing issues, get them out in the open and work as a team to overcome them. It’s a cliché, but you really can’t buy respect or trust.

Rule 8 – Celebrate your team’s success

It’s always worth thanking your team for a job well done, and celebrating success as often as possible. Even if cash bonuses aren’t in the budget, sincere thanks and appreciation are valuable tools in forging strong bonds within your business.

Rule 9 – Be prepared to lose your best people as they grow

It’s inevitable that the career paths of some individuals may take them out of your business. Remember that no-one is irreplaceable, and make sure that no processes are reliant on just one person, in case they ever leave.

Rule 10 – If you need advice, make sure you know where to get support

HR and employment law is a large and complex area. Sage People Advice can help. We’ve got flexible options, from a single phone call to a 12-month contract to help support you with any employment queries. For more information call us on 0845 111 2450.

Matt Forrest, Small Business Team

This month with HR Vision we are talking about talent management and who should drive it. Paul Sparrow, Director of the Centre for Performance-Led HR, Lancaster University Management School and Bob Marsden, Director of People and Organisational Development, Balfour Beatty Utility Solutions, discusses who owns talent management, HR or business managers.

Paul Tooth, Sage HR and Payroll

In my opinion effective talent management is a critical business goal for all leading organisations in today’s economy. It is essential that business managers recognise that workforce and talent management can directly impact a company’s profit and give them a competitive edge.

Talent management won’t be a success if it’s seen purely as an HR initiative. To be truly effective, it will need senior management buy-in, but also buy-in from a range of other stakeholders. Having said that I believe it is only HR professionals that have the skills and expertise to create a talent management strategy.

Bringing together everything from recruitment through performance management, training and development, leadership programmes, to individual professional development, talent management must be aligned across divisions and designed to support business strategy.

How is talent management addressed in your business? Should CEOs get more involved? Have your say at www.hrvision.tv

Paul Tooth, Sage HR and Payroll Team
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The first topic we’ve been exploring at HR Vision is ‘Has HR become remote from the line?’ It’s been interesting watching Tanith Dodge, HR director of Marks and Spencer and Jo Hennessy, director of research, Roffey Park, discuss the issues and their experiences. No matter what your experience we hope you’ll find something that gets you thinking. And if it does, why not have your say and tell others what you think?

Paul Tooth, Sage HR and Payroll

We all know that the HR function has transformed over the past decade. It is no longer administrative but specialist and strategic. However this does mean that HR are relying on line managers to ensure employees are motivated, productive, competent and fully engaged with corporate goals. Therefore it is vital that these two functions understand each other and work together but we know this can be challenging!

So how can HR build effective relationships with line managers to ensure they are working in partnership?

Here are my top 10 tips

1.       Coaching and development

Line managers need both skills and development to execute HR responsibilities. Make sure the necessary coaching and development is in place. This will give them confidence and mean they will be happier with the extra responsibilities.

2.       Be honest

If you are introducing a new strategy or policy and it will involve a lot of line managers’ time and resources, be honest with them and ask them how they feel about it. Involving them like this will automatically make them more engaged and cooperative.

3.       Timing of communications

When you are trying to communicate with any audience, timing is vital. Don’t try to communicate with your line managers during the busiest time for the business because it is unlikely you will be heard. Pick your moments to communicate carefully.

4.       Listen and respect

It is likely that they will have different views and attitudes to certain things but this does not mean that they are less important. In order to build an effective relationship you need to listen and respect their views and take on board what they say.

5.       Equip them with the right tools

If you are relying on line managers to manage many of the day-to-day duties of people management ensure that you give them the tools and equipment to make this as easy as possible. Self-service technology can significantly reduce the administration and save line managers valuable time.

6.       Support

Make sure the HR department is there to support line managers when needed and make sure line managers know HR is there to support them!

7.       Personal performance objectives

Make people management responsibilities part of personal performance objectives as this demonstrates corporate sponsorship of HR activities as being crucial to the business.

8.       Make HR’s role and contribution clear

Explain the role of HR as a strategic partner and showcase the benefits that it can bring to the business.  Provide examples of how HR can add value to the business on a strategic level now that it has moved away from tactical activities.

9.       Recognise them as strategic partners of HR

Line managers should be recognised as strategic partners of HR and given recognition and reward for their responsibilities

10.   Give praise

If line managers have implemented a new policy successfully, engaged employees effectively, or are just are just doing a good job, make sure you tell them!

Well, that’s my top 10. What would you add to the list?

Paul Tooth, Sage HR and Payroll Team
Join our Linkedin group for more HR tips and info

Love it or loathe it, you can’t deny the impact that ITV’s The X Factor has had upon popular culture. Acres of newsprint have been devoted to it, some of its contestants can be seen in the upper echelons of the hit parade and, lately, even yoghurt companies have jumped up onto the bandwagon.

The X Factor is a massive money-spinner for ITV, and for Simon Cowell’s Syco entertainment company. In 2009, X Factor brought in £75m in revenue and is projected to smash through the £100m mark this year. And of this not including money made from the phone-In votes, live shows and appearances, merchandising, download sales via iTunes or the eventual record sales of the winner.

Like all great commercial enterprises, The X Factor is a success because of the vision and dedication of the people who make it. And like many great commercial enterprises, The X Factor has a distinctive leadership team – Simon Cowell and his three co-judges, Dannii Minogue, Louis Walsh and Cheryl Cole. Each of the judges brings a distinctive flavour, personality and style into the mix. The competition between the judges adds the element of conflict necessary to create the tension that is at the heart of the show’s weekly vote-off and it could be argued that the secret of The XFactor’s success lies in the interplay between these different leadership styles.

There are many academic theories and models out there that aim to unlock the secrets of effective leadership and characterise different leadership styles. Among these is Bass &Colleagues’ model of the five distinct styles of leadership. Looking at these five styles through the lens of The X Factor, we can see that our four judges match up with four of these distinctive leadership styles.

Simon Cowell – Directive leadership style
Characterised as a leader who exercises complete control over followers, the directive leader tells people what to do and when and how to do it. The classic Svengali, Cowell architects his act’s every move and song. His final act to remain in the competition, boy band One Direction, are a great example of Cowell’s directive style – the band itself was created by Cowell from contestants who had all auditioned as soloists.

Dannii Minogue – Participative leadership style
For Minogue, the directive leader is the antithesis of what she aspires to be; she far prefers reaching decisions by consensus and sees herself as a member of a team, rather than as someone atop a structural hierarchy.Minogue epitomises the participative leader, creating a real team atmosphere amongst her acts, who pick this up in turn, behaving in a very supportive manner to each other. “Team Dannii” contestants who have been voted off often go on to publically back their teammates to win. When her acts are criticised, Minogue is defensive and displays behaviours to suggest that she feels that she herself is in the firing line.

Cheryl Cole – Consultative leadership style
Similar to Minogue’s participative leader, Cheryl Cole is very much a consultative leader. She is at pains to stress the time she spends with her acts and that they are very much involved in the decision-making process. The consultative leader leverages the particular skills and talents of individuals in their team to achieve results; witness the four very different acts Cheryl worked with this year, each maintaining their distinctive style throughout the competition.

Louis Walsh –Delegative leadership style
Although his success with bands such as Westlife would suggest that he’s more of a directive leader, on the current series of The X Factor, Walsh has generally displayed behaviours more associated with the delegative style of leadership. Walsh has repeatedly stated that his acts are genuine and self-directive, autonomous artists rather than puppets dependant on his direction and advice. Walsh tends to avoid decision making whenever possible, for the most part doling out generic platitudes rather than constructive criticism. The delegative style is most effective when your team members are trustworthy and solid; the leader can trust them to make good decisions. However, the delegative style falls down when used with people who need more direction and guidance.

With all this in mind, we were curious to see who our customers thought would make the best boss. Out of the four X Factor judges, you may be surprised to hear that Simon Cowell was the runaway winner. Could it be that, when it comes to work and career, many of us still like the security and surety of someone telling us what to do? Are consultative or participative leaders less effective in practice? Leave a comment and let us know your thoughts.

Zeinab Lenton, TAS Software

Jim Scott, Head of SageCover

You don’t need me to tell you that HR and payroll is a major concern for businesses. That’s something your employees will do if you get it wrong! But you might not know that seven out of ten small businesses have needed to seek advice on HR and payroll issues that have impacted their business. 

The challenge for small businesses is the speed that the legislation changes. The Chartered Institute of Personnel and Development (CIPD) identified that twenty significant changes have been made to the UK employment law since January this year.

Barometer for British Business

During May we carried out our Sage UK omnibus, this surveys 1,500 of our 800,000 customers to get a better picture of the challenges facing UK firms and provide a barometer for British business.

The survey found that only 22% of firms employ a dedicated specialist to deal with HR and payroll issues. But for the majority it’s a huge challenge to find their way around the complex legislative landscape by themselves.

Understandably, many are seeking specialist advice such as our HR Advice service.

Working with our SageCover team also gives me a clear idea of the issues facing businesses. This team provides help to our customers in the day-to-day running of their business, and they’d certainly agree with the survey; there are a large number of businesses struggling to get to grips with HR and payroll issues.

Critical to business success

There is no question that HR and payroll is about far more than pay, rewards and policies. It is about knowing your employees and understanding their needs in order to establish a long-term and productive relationship. Getting your company’s HR and payroll right is critical to the success of the business.

Firms need to be in the best position to take advantage of every new opportunity as we emerge from the recession, and having a highly committed and motivated workforce underpins that. People understandably have a low tolerance when it comes to errors in things so personal as their pay or paternity leave, so making sure your business has the correct procedures and support is vital to maintaining a competitive business.

Staying up to date with HR and payroll issues can seem daunting if you’ve not got dedicated resource in your business, but here are some things you can consider:

Getting to grips with legislation

Legislation affecting payroll changes regularly, so make sure you are always up to date with the latest developments by dedicating at least one hour a month to reviewing the HMRC website. The HMRC also runs EmployerTalk forums, which take place every week across the UK.  The sessions last for half a day and include three half-hour presentations on relevant topics and an ongoing exhibition.

If you’ve got SageCover with your Sage 50 Payroll software then you’ll already have access to expert HR Advice. But, if not, then you might want to consider signing up for our free HR legislation alerts or join our comprehensive HR Advice service.

How much is employee absence costing you?

According to the CIPD’s 2009 survey, the average cost of absence per employee per year is now £692.  Capturing your company’s HR information using software will help you to monitor absences and spot trends. This can help you identify potential gaps and plan ahead. You can also work out the cost of absence to your business and identify if this is an area that needs to be addressed.

Jim Scott, Head of SageCover

It’s been a tough few years for the accountancy industry. And the toll taken by the recession has had very direct consequences for us all.

In an effort to cope with the economic downturn, we all know that many firms have had to freeze or even cut salaries, with some asking staff to accept reduced working or conditions in a bid to increase efficiency and minimise redundancies.

Steve Porter, Sage Accountants' Division

But now, as tentative recovery begins, accountants are starting to ask when they’ll be rewarded for their loyalty – and those personnel who settled for less will soon be asking for more.

So will they be successful? And will firms face even more difficult decisions in the months to come as a result of previous cost cutting?

What will the effect of the recession have on current staff whose careers have halted during the downturn and how will the new raft of summer graduates find their way in this changing landscape? One thing is for sure, there is no shortage of young people wishing to join the profession.

Almost 10% of all UK university leavers currently pursue a career in accountancy in some shape or form. The vast majority of these still enter the ‘big four’ firms – KMPG, Ernst and Young, PriceWaterhouseCoopers and Deloitte & Touche.

Although there is a small decline – the number of qualified workers employed by the top 50 firms has fallen by about 3,000 or about 5% over the past year – this means there are still almost 57,000 accountants working in the UK.

Access to such a large talent pool has been part of the problem. Having such a large number of staff and graduates to choose from means that in recent years employers have been able to offer reduced salaries as people compete for jobs.

In turn, new joiners have found themselves having to lower their pay expectations, sacrificing financial gain in return for job security.

Those already in position when the recession began have seen salaries frozen or hours shortened. And the introduction of four-day working weeks and optional extended leave have also been seen across the sector, as part of a longer-term strategy to stave off redundancies. Other smaller firms have laid off management staff and replaced them with less experienced, cheaper graduate recruits.

While this type of cost cutting might work well in the short-term, industry experts warn it could prove costly in the long run.

Although it could be argued that having such a large pool of talent to choose from means it is possible to secure strong candidates at reasonable rates, the departure rate of staff in such an environment is likely to be high.

If firms continue to offer non-competitive salaries even when the economic climate begins to improve, personnel will move on – wasting money and time spent on training and career guidance.

With this in mind, firms are urged to resist cutting training in a push to reduce costs.  Some argue that companies who don’t train their staff are far more likely to have problems later on – that those who invest in developing the talents of their employees are much better placed to weather tough times.

In some of the larger companies employers are offering accountancy professionals salaries that will not entice people to move, and those people who do move are more likely to do so with reluctance or because they feel they have no choice.

In order for employers to find and retain the most talented candidates on the market, there needs to be some change in the way they attract talent. Going on the understanding that people will be happy just to have a job isn’t feasible for the future, and there must be more forward thinking in the market.

As soon as there is evidence of an upturn, there will be huge unrest in the market if employees do not feel suitably engaged with employers or feel that they are not gaining enough recognition for their work. And unless comprehensive succession plans are in place, companies may not be prepared for a loss of skills and people when the market moves on.

So as the economic climate continues to change, how we attract, retain and reward staff looks set to be a talking point for some time to come.

Steve Porter, Sage Accountants’ Division

With the World Cup fast approaching many people are looking forward to watching some of the world’s best footballers in action. But with a lot of the early matches taking place during the day time and the opportunity to stream games on your computer live for the first time, there are concerns that it could create a serious drain on productivity in the workplace as well as internet bandwidth. It has been reported that two million employees in London alone are expected to tune into matches during work hours.

Planning for every eventuality

It has been well documented in the past that employee sickness levels often rise during key sporting events, so every business, regardless of size, must accept that the World Cup could potentially impact their business and contingency plans should be put in place. However, it was encouraging to see from research conducted amongst our own 800,000 customer base that only one in ten businesses (10.7%) are expecting the World Cup to lead directly to absenteeism.

Taking the appropriate steps

There are a number of measures that employers can take to ensure productivity levels remain high around the World Cup and if handled considerately firms can use the event as a great way to build morale and ensure employee satisfaction.

The Sage Omnibus conducted amongst 1,500 SMEs, showed that many small businesses are planning to adopt different working practices during the tournament. Twelve percent of SMEs will be setting up a TV in the office, 6% changing their working pattern and 2% are allowing staff to work from home during this period.

Top tips for improving staff morale during the World Cup

• Be flexible – By allowing staff to have flexibility over their hours is one way that employees are able to watch specific games. Staff may choose to start early, or finish late, to make up the hours taken or even swap shifts but as long as this has been agreed in advance the company should not suffer as a result.
• Screen games at work –  As long as the business owns a valid TV license, on-site viewing is a great way to increase staff morale.
• Allow the matches to be watched online –  Have clear procedures in place which outline the company’s stance on watching games online. By knowing in advance how many employees will be streaming live games on their computers, the firm can best monitor their bandwidth and ensure their business continues to run smoothly throughout the tournament.

No one wants to miss a rampaging run from Rooney or a dazzling goal from Terry and by taking a proactive approach, companies can enable employees to follow the tournament while maintaining productivity and boosting morale.

For loads more tips to help you manage your people check out our free guide.

Cath Sheldon, Sage Brand Marketing Team