Driving into work this morning, I was thinking about just how much added costsbusinesses are having to take on, which is hamstringing companies especially when we need to get the economy moving again.
Lets forget about rising fuel prices, diesel, engergy costs, business rates, minimum wage, rising rents and all the other things we don't like but have to put up with.
A couple of examples:
A few years ago we as a company were paying a lot of money for skip hire and collection /emtpying/landfill, plus a tax of £16k per year. Due to EU waste packaging directives, we were then liable as a business for over £300k - yes a massive jump. Obviously we have worked extremeley hard at reducing this, and have been succesful to a certain extent, so that we are now liable for c£160k. On top of this we had to employ extra staff to manage the data and systems. A huge tax because that's really all it is.A whole new industry was created called 'compliance', with a boom in local council employment who visitall businesses in their areas and check for EA licences, waste transfer notes etc, etc, etc.
We have the same thing happening with the carbon reduction scheme, revolving around electricity useage.
Due to the way employment law has changed, we have had to employ 2 extra staff in HR, and spend many, many hours each year with management tied up carrying out disciplinary investigations, appeals, hearings, tribunals, and of course a lot more money spent on the legals if we decide to go to a tribunal. We are recognised as a good employer, but the system today is such, that a simple employee transgression, which should take minutes to deal with now involves a lot of man-hours to do. The employee rights are so favoured that someone who should be dismissed immediatley, is still employed until a very ,ong process has been gone through, and still on full wages whilst under suspension. All employees know that they can string the whole process along, by appealing and then going to tribunal and making a claim. They know that many companies find it more cost effective to pay the employee off, rather than go to tribunal. The whole tribunal fiasco is slanted in the employee's favour because they know that costs never get awarded to the employer, once the case has been found in favour of the employer. In fact costs have only once been awarded to an employer, which wasn't supposed to be the case when the legislation was introduced.The proces was supposed to be balanced and objective, but cases which should never be heard are listened to, the employer found not to be at fault, but no costs awarded which means the whole expensive fiasco is a huge cost to the business in both management time, HR man-hours and legal bills. No-win-no-fee solicitors will take any case an employee wishes, which is a total abuse of the system, but perpetuated by the tribunal system/culture, and makes me wonder just how many jobs were created to deal with these cases, which comes out of the public purse. A whole new industry was born. We are at present dealing with an ex employee who decided to make a claim for unfair dismissal, and has demanded £40k in cash or he goes to tribunal. The case was cut and dried and simple, but we are having to go through the whole legal process, and fully expected the system to throw this case out because its a no-brainer, but no it's going to tribunal.
Health & Safety legislation is yet another huge cost to business, as yet again staff are employed just to manage it.There are very few businesses that are operating unsafe systems, but EU legislation and the HSE directives are continually being updated, revised and implemented without any understanding of the ramifications. A couple of years ago we had a run in with a particular young man from a council in another county. He issued us with a prohibition notice so that we couldn't deliver to our stores in his county. I got involved and spoke to the young man via phone, where I discovered that he was fresh from university and had taken a decision that part of our operation was unsafe, so issued the notice. I arranged for a meeting with this young fool and also his line manager, where I explained that what they were trying to do would completley change the whole of our business, and would mean a multi-million pound company would have to close. The H&S guy thought this was extreme, but once I explained to him that the way they said we should be working was actually illegal, and would make us put a huge number of our warehouse staf in extreme risk, he was gobsmacked. A very long story, but true, so a short version. I employed an ergonomics expert who actually works for the EU, and he wrote a report backing me up. I went to the transport select comittee and was given full backing. I had industry leaders in my corner, because this ruling would effect them too. The upshot is that the head of the HSE was involved and had to back down. We didn't however recieve an apology, but we had a huge amount of man-hours and costs to pick up, because some wet behind the ears kid had made up his own mind that he was right, and we were wrong.
Wages departments head counts also on the increase due to changes in national insurance and now the new employee pensions scheme.
Obviously there is much more than I've ranted about here, but I would dearly love to know what % of every companies margin is being eroded, and fully appreciate that all businesses are different in size and type of sector, but all of us have been impacted in some shape or form. Lost margin, even if it is just working time directive etc. There are occasions when we find it cheaper to utilise outside labour than employ people.
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