Sunday, May 27, 2012

Beecroft was Right

I say this both as an entrepreneur and a Liberal Democrat.  Vince Cable has been right about many things, not least Murdoch and the banks.  But on Beecroft he is wrong.  

To recap, Beecroft wanted to make it easier to release people who aren't working out as good employees. At the moment, it very hard for businesses to move people on who aren't quite up the job.  The law is OK - just - for moving on people who are absolutely terrible, but it isn't a lot of good in situations where things just aren't going as well as they need to - for example, where people are just about getting by - but things are not working out as you hoped.  

Tough on you, I hear some readers say. How about helping that person reach the mark?  Training?  Patience etc?  Believe me, most people in business will do all of the above before taking away someone's livelihood.  Particularly in small business where everything is face-to-face.    

What we need - which we don't have now is the right to make a unilateral decision - without fear of legal challenge - that this person isn't delivering value to our business and they need to go.  With requisite compensation, of course.   What happens instead is that you can say you're not happy but, in order to avoid a legal challenge, you have to give people all sorts of targets and supports to hit those, even when you're sure, in your heart, this isn't going to work out.    

I have been here lots of times in my previous role in a larger organisation.  With 250 employees, about ten percent are normally underpeforming.  To have that many people in 'special measures' is expensive and takes up all of managers' and HR departments' time.   It would be far better, with nearly all those people, to be able to have a grown up conversation that enables a quick, mutually dignified departure.

Will this, as Cable fears, create mass insecurity in an already anxious workforce?  I am sure that 90% of people realise that they have nothing to fear from such changes in rules.  Those that will be most scared will be the 10% who need to be.  Indeed it may, in some cases, be the prompt they need to address some of their issue.  

I realise this a very different view to that of most people who don't see themselves as on the Tory Right.  But talk to anyone who manages people or runs an organisation and you'll hear a lot of agreement.   

One's own view comes down in part to whether you believe that people in the UK, and Europe more widely, are over-protected and insufficiently flexible at work than they need to be in the current world economic situation.   

Personally, when I look at how people and companies in other continents work, I see us as asleep at the wheel, living on borrowed time before we get 'found out' and thrown in far greater hardship than we would if acted now and took the wise advise of Adrian Beecroft onto the statute book.


Anonymous said...

Are you seriously trying to say that the biggest problem facing entrpreneurs in the UK is that they operate in the most deregulated labour market in Europe?

Rob 'Arris said...

Anonymous, I don't believe Craig is saying that at all, unless of course i have missed something.

There are plenty of problems facing entrepreneurs, some are the same as the problems facing massive organisations, charities and the public sector. The problem that Craig describes applies to all so isn't exclusive territory for entrepreneurs or small businesses.

Ive been there myself; and it slows the business down and you know you are on a downward spiral that won't come back whatever you or the employee does. Its not a good situation for the employee either but there is a belief, especially in the profitable employment legislation business, that you must flog a dead horse until you are either whiter than white or your employee leaves or takes out a grievance. The latter usually applies and it's ridiculous. I believe that is what Craig is talking about.

Also Craig doesn't mind sticking his name on his posts. Nor do I.

Anonymous said...

I suppose the thing is that in the past workers had little or no rights and their employment was at the whims and prejudices of their boss. You now seem to be saying that legislation may have gone too far the other way in favour of workers, at the expense of the boss's judgement and business. Would you prefer to return to the days of 'If I don't like you, you're fired' approach to the workforce?

The Incomer said...

As an entrepreneur I have vowed not to employ again as long as legislation remains as it is. Employment atrocities, on either side of the employee/employer line, will happen no matter what the legislation. The one thing that entrepreneurs are excellent at is spotting potential and when you start someone new, you very quickly know who will respond to training and who will not. I personally believe employees should be employed by employees and then they can abuse each other to death as neither is accountable. At the moment the self employed carrying poorly performing employees are sitting ducks.