Striking the Balance: How Do Creative Business Owners Navigate Planned Workers’ Legislation?

Labour’s new workers rights’ regulation plans are bombarding our news feeds right now and, as a leader in the creative industries running a small, independent business, I’m weighing up the pros and cons.

Striking the balance between a pro-worker and a pro-business agenda is seemingly tough for Labour. The Government's new employment rights bill is set to go before parliament within 100 days, though it won’t come into full effect for two years. Amongst it all, I think there could be some great boons for workers, including protection from sexual harassment and in increase in parental leave for both partners. And clearly being entitled to sick pay from day one of employment is great for employees, – but for small businesses, it's risky. If I had just hired two people, and they both called in sick, and I would have to pay them both for 28 weeks and that would be detrimental to my income. The unfair dismissal clause means you can’t let them go either and it’s going to be complex to navigate.

So how will all of this affect business and consumer confidence?  I predict that companies are going to be more cautious and try to minimize the risk by working around the legislation, especially in the beginning. You might push back from employing somebody permanently, without being sure they were the right fit for your business. For example, some tech giants already hire some people as contractors on two year contracts for exactly that reason. It’s likely we’ll see more outsourcing and offshoring too. 

However, the changes could impact the creative industries differently from other sectors too. As a post -production house, we hire many freelance creatives and they won’t see any benefits from the plans. Freelancers are very important to us and are highly valued people in our teams, but 95% of my staff are full time employees based in different countries around the world. 

For agencies and studios of all sizes, hiring freelancers could feel like less of a risky option. So, I’m foreseeing a rise in freelancers, which could lead to fewer people in permanent, full-time jobs. Many freelancers are out of work right now, with cuts across big agency groups, so this could create more opportunities for contractors and suppliers too that can fill the gaps in the market. Recruiters could also win here as area specialists that can help employers make careful recruitment decisions. 

The planned 1% National Insurance hikes for employers could also be crippling for creative companies like mine, while large businesses will barely feel the hit. The economy is still not in great shape, it’s fragile. Should it really be a one size fits all approach? 

I’m not just considering the impact on my own company here, but the repercussions for my teams and our suppliers in the UK. The changes to zero hours contracts will have less impact on our industry, though I’m sure it will make a difference in sectors like retail and hospitality. 

While it’s easy to grumble, I’m looking at this as a creative problem that needs to be solved, while looking at the potential opportunities. Because with every challenge there is an opportunity, as the tumultuous past five years have taught us, and we plan to be ahead of the curve in finding solutions. Despite the challenging economy, we’ve won new clients as they look to outsource work in the face of hiring freezes, IR35 off-payroll rules and rising overheads, and we’ll help them to look at the next set of hurdles in the best way we can. So, what do you think?