Many start-ups or small businesses will see HR support as a luxury rather than an essential function for the successful management of their workforce. It can certainly seem excessive to employ a HR specialist for just a handful of employees.
Why though is it so important to have HR support and guidance?
When going it alone, line managers are running the risk of missing crucial steps in a process or unintentionally discriminating against a member of their team when taking action on troublesome employee situations. These risks can be extremely costly.
Currently, the maximum awards for successful unfair dismissal claims are comprised of a basic award of up to £15,240 (or 30 weeks' pay if this is lower), plus a discretionary compensatory award of up to £83,682. Discrimination claims on the other hand, are not subject to a maximum limit. Damages awarded for discrimination are designed to return the employee to their position had they not been subject to discrimination. This is made up of financial loss; personal injury; whether that be physical or psychiatric. It must however, be shown that this injury has arisen from the unlawful discrimination; and also takes into consideration injury to feelings.
ACAS reported a total of 36,311 cases reaching Employment Tribunal in 2017. This does not include those settled prior to the case reaching Tribunal. It is also worth bearing in mind that Employment Tribunal fees were abolished in July 2017 so it is expected that this figure will rise dramatically for 2018. Reports from March 2018 stated that Employment Tribunal claims had risen by 90% following the abolition of Employment Tribunal fees.
The risk associated with taking action on less than ideal employee situations can result in line managers simply taking no action at all and hoping that problems will go away on their own. This approach rarely results in a successful outcome, and will often allow the problem to reach a crucial stage when action becomes unavoidable. By this point, the working relationship is strained and a significant amount of time and money is wasted in the process; particularly where performance or absence issues are not addressed.
Avoidance of issues or difficult conversations by line managers can also have a negative impact on employee engagement. For example, if a manager is unaware of their entitlement to make regular contact with an employee who is absent from work on long term sickness absence then this can wrongly create the impression that the manager does not care about the employee’s welfare while they are away from the business. It will also make a long term sickness situation much more difficult to manage if there has been a lack of contact between manager and employee from the beginning.
HR support doesn’t need to be expensive. For a small business, outsourcing your HR advice and support can provide the reassurance needed for line managers to effectively manage their employees. Contact MHR today to find out how we can help and just how cost effective we are!