Why would anyone in their right mind become an employer?

In recent times, I’ve come to wonder more and more why anyone in their right mind would become an employer!

Think about it: all of us who employ people will soon be in the depths of auto-enrolment pensions.  Even if no employees take up the scheme, the employer has to jump through the hoops of setting up a scheme and communicating loads of very technical details to employees.  That’s after dealing with a stream of employee questions because the adverts have been on TV.

Many are facing the situation that their Stakeholder Pension provider won’t convert an existing scheme to auto-enrolment and, because they’ve only been required to join in later in the process, that other providers are closing their doors to new applicants.  And now time is ticking with the penalties for missing deadlines being harsh.

The push for employees to be paid a living wage, not just the minimum wage, is growing.  Many smaller employers are facing constant downward pressures on their prices so will have to face the prospect of cutting employee numbers if they have to pay employees they keep more.

The prospect of overtime hours costing more for reasons from living wages to the recent holiday pay ruling (albeit that is likely to be appealed), may mean that some employers decide against allowing overtime because the added costs exceed the additional profit that can be made.

Then add in the fact that apparently ever-greater rights for employees to ask for (or is that demand?) flexible working patterns can and does cause real headaches for scheduling/resourcing.

With pricing pressures on one side and the cost of employing people on the other there can come a time when a company is struggling to survive.  Then the hard decision of reducing head count often has to be made and, oh boy, the cost and risk of doing that is daunting.  A long-standing employee could be entitled to several months’ worth of pay when you combine redundancy and notice pay – all at a time when the business is trying to save money and may be short on cash.

Oh yes, and small employers can no longer reclaim the cost of Statutory Sick Pay.  You’ll have heard about the £2,000 employer’s NIC rebate and that’s great but the cost of one employee being on extended sick leave soon takes away that benefit.  After that sick pay is a real cost to the business and there’s nothing they can really do but pay it.

I could go on - and yes, I know it’s a potentially depressing list!

That said, for me I know (looking round my offices) that the trials and tribulations are outweighed by the reward of building a happy and productive team.  Running a small business means working with staff who can (and should) become an extended family and, if you get it right, then each member of your team will actively strive to grow a prosperous future for the whole business and everyone involved with it.