What are the big employment issues facing small and medium businesses in the coming year?
If you run a small to medium-sized business, you’ll know that it can be hard work.
One of the biggest challenges for business owners is managing their employees. Employees may be your biggest asset but they can also be one of your greatest business risks.
Ever-changing employment law, health and safety requirements and employee grievances can eat up a lot of your time. Smaller businesses are particularly vulnerable as typically the owners lack the time, expertise or adequate resources to stay on top of their duties as employers.
The first priority is to be aware of the potential issues and pitfalls that face your business. With this in mind, we’ve looked at some of the most significant employment issues that will impact on small and medium enterprises (SMEs) in the coming year.
1. GDPR and data protection
The much talked-about General Data Protection Regulation (GDPR) came into effect in May, bringing in sweeping changes to how businesses process the personal data of employees and customers. If your business hasn’t updated its policies and procedures for GDPR, you could face fines of up to 4% of your total global revenue.
GDPR is designed to offer increased data protection to individuals and this is set to become a more and more pressing issue for modern businesses. Organising your management systems and updating your data policies and procedures is vital if you want to ensure that your business remains GDPR compliant.
2. Employee wellbeing
Studies show that happy employees are nearly twice as productive as unhappy employees. Workplaces that promote employee wellbeing are increasingly viewed as attractive places to work. Businesses that operate employee wellbeing programmes are also seeing tangible results in the form of reduced absenteeism, increased employee retention and ultimately a better bottom line.
Taking a proactive approach to employee wellbeing and engagement is no longer viewed as an optional extra. It has now become a business priority. If you look after your employees, they will look after your business.
3. HR and payroll compliance
Two of the biggest challenges facing small businesses in Ireland are HR and payroll compliance. Employment law is continuously being updated. Remaining compliant with existing employment regulations is challenging enough without also trying to keep abreast of future changes or impending updates which will impact on your business.
Compliance may be a challenge but it’s one that you can’t afford to get wrong. Breaching employment law can result in significant fines, reputational damage and costly, time-consuming legal actions. Business owners that fail to keep up-to-date with employment law could leave themselves open to claims by disgruntled employees or adverse findings in workplace inspections carried out by the Workplace Relations Commission.
4. Discrimination or harassment
An allegation of discrimination or harassment is particularly difficult for a small or medium-sized business to handle. Without a dedicated HR team, negative employee behaviour can sometimes go unchecked and end up creating a toxic work environment. Employers may also be found “vicariously liable” for harassment carried out by employees.
It’s important to have clear policies and procedures in place to prevent this type of behaviour and to demonstrate that any complaints or accusations will be taken seriously. Businesses cannot afford to brush over any accusation of discrimination or harassment. Any such behaviour is specifically prohibited under employment equality legislation.
Every effort must be made to address a claim, whether that involves using internal resources or bringing in an external party to carry out a full and impartial investigation. Employers who have clear anti-harassment policies, which have been properly communicated to all employees, will be in a better position to successfully defend an allegation of harassment.
5. Recruitment processes
Potential recruitment pitfalls involve more than just finding the right person. Start-up businesses often figure things out as they go along with a policy of “move fast and break things.” While this approach will initially help start-ups to expand, it is not a sustainable way to grow a business.
Hiring the wrong person because you need to quickly fill a position can prove to be a particularly costly mistake. Taking the time to thoroughly check a candidate’s background, investigate his/her suitability for your company culture and carry out a rigorous assessment of all his/her skills will minimise the risk of making a bad hire.
You must also remember that employment equality law prohibits you from asking certain interview questions which indicate that you intend to make a discriminatory recruitment decision. Employment equality legislation prevents employers from basing a decision on the candidate’s gender, civil status, family status, sexual orientation, religion, age, disability or race.
6. Having a paper trail
Failing to pay proper attention to employment regulations can leave you badly exposed. Employment compliance may not be the part of the business that inspires you but having proper employment policies, procedures and benefits in place will reduce your exposure significantly.
Failing to provide an employee handbook leaves you open to disgruntled employees claiming that they were unaware of company policies and it can create confusion in your workforce. The most time-consuming process is the initial drafting of your employee handbook but, once the documentation is in place, it is easy to update it periodically.
7. Health and safety
Health and safety is often ridiculed but it’s something that your business can’t afford to ignore. Every employer is required by law to provide a safe working environment for their employees.
Your office may not seem particularly hazardous but you are still required by law to carry out a risk assessment and make every effort to reduce any risk to your workers. If your business puts robust health and safety policies into practice, you reduce your exposure to the costs of ill health, accidents, legal fees and increased insurance premiums.
Peninsula is Ireland’s most trusted employment law and HR advisor, offering a 24-hour advice service 365 days a year, so clients can consult directly with their employment law and HR experts.
If you have any queries regarding staff contracts, health and safety policies, or any aspect of HR and employment law, call Peninsula’s 24-Hour Advice Service on 1890 252 923 or contact them through their website.