“Employer Inertia” driven by fear of red tape and administrative headaches

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A new report from Intuit, the QuickBooks small business accounting and payroll firm, today exposes the barriers preventing Britain’s 3.8 million class zero businesses – those businesses without employees – from taking the leap to becoming an employer and the concerns small business have with taking on staff.

 

One Giant Leap: The Vital First Step to Becoming an Employer polled 500 small businesses across the UK about their attitudes to taking on staff and found that:

  •    EMPLOYER INERTIA 80% of businesses without employees and 36% of current employers have no plans to hire; however 29% of all respondents would be tempted to hire if the economy improved.
  • CASH CONCERNS – 20% of businesses without employees do have plans to hire, but the biggest reason for not currently hiring is cash flow – 34% are not sure they can afford to pay anyone.
  • HIRING HASSLES – 27% of businesses without employees say they currently don’t employ anyone because the administrative burden puts them off.
  • TAX INCENTIVE – 26% of bosses would be encouraged to hire someone if employer’s National Insurance payments were cut.
  •  APPRENTICE ACCESS – 75% of respondents don’t know who to talk to about taking on an apprentice, and 28% had not heard about the government’s drive to get more apprentices into work placements.

 

The fear of taking on challenging administrative overhead and added bureaucracy weighed heavy amongst those polled including dealing with HMRC, regulatory compliance and legal and tax obligations.

“At present there are a number of major hurdles small businesses or sole traders face, including unfair dismissal, maternity leave and discrimination laws,” said Sean Morgan, managing director of Quest Professional, andcontributor to One Giant Leap. “Current employment legislation makes it very scary for small businesses to employ people when otherwise they would love to.”

“It is clear there is a willingness to create jobs, but for many the cons outweigh the pros,” said Pernille Bruun-Jensen, Intuit’s Vice President and UK Managing Director. “With unemployment among young people at an all-time high we need to make it easier for small businesses to continue hiring and encourage the swelling ranks of the self-employed to take the leap and hire their first employees.

“At Intuit, we help by reducing the administrative burden of paying employees with QuickBooks Payroll, an easy to use payroll solution built for small businesses. We are also trialling an online legal service for employers to help them deal with employment law and safety rules.”

Bruun-Jensen added, “This year we are also adding an employer-specific module to our Financial Fitness training workshops, which we launched in collaboration of the government.”

One third of businesses surveyed said that online legal help with health and safety compliance and creating employments documents would encourage them to hire someone in the next few months

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