Autumn statement: the implications for HR

Chancellor Jeremy Hunt announced an array of reforms to pensions, benefits, the national living wage and more – but what do people professionals think of the plans?

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Chancellor of the exchequer Jeremy Hunt promised a host of reforms in his autumn statement yesterday, including changes to pensions, a boost to the national living wage and a stricter approach towards benefits and jobseekers.

Steve Nicholls, managing director of Executive Connexions, tells People Management that the statement brought several “positive developments for UK businesses and workers”, but says: “I have some concerns that the statement does not go far enough. 

“Overall, it tackles important issues around jobs, skills, incomes and productivity. But bolder reforms may be needed if the UK is to drive growth, retain talent and remain internationally competitive during a difficult period.

“HR professionals have an important advisory role here in translating policy into workplace practices that serve both business performance and employee wellbeing.”

And Lisa Alexander, policy and process manager at Fitzgerald HR, says HR professionals will be at the forefront of communicating any changes to the workforce: “Doing this in a clear and transparent way will ensure employees understand the changes ahead.” 

With many of the reforms focusing on initiatives to get more people working and reforms to pay and pensions, how have HR professionals reacted?

Increases to national living wage

Alexander says the increase for all age brackets “will be a significant boost for many amid the current cost of living crisis” and that workers will also benefit from a reduction in national insurance contributions, reducing from 12 per cent to 10 per cent.

She continues: “As HR professionals, it’s critical that we guide and advise our business owners and leaders to ensure these changes are reflected in financial forecasting and that budgets take the higher rates of pay into consideration for 2024-25.

“While many organisations won’t be impacted by the changes to the national living wage as they already pay above these rates, many sectors such as care, retail and hospitality will have considerable work to undertake to ensure these changes to pay are implemented correctly.

“As a result, ensuring legal compliance is another key role for HR professionals following the autumn statement.”

Concerns over how reforms will hit workers with disabilities

Earlier this week, People Management reported that Tony Wilson, director of the Institute for Employment Studies, felt significant investment risks being “drowned out by divisive rhetoric”.

These criticisms have only continued after Hunt announced plans to scrap benefits for those who do not engage with new mandatory work placements for jobseekers on benefits who have been out of employment for 18 months.

Diane Lightfoot, CEO of Business Disability Forum, says she is “concerned and saddened”, adding that “many disabled people who want to work struggle to find a job that meets their needs”.

“Disabled people should not be vilified for this. They also need assurance that they will not lose their benefits if they try out work and it doesn’t work out,” she says.

“If the government wants to make work a realistic option for more disabled people then it needs to take a joined-up approach with better access to tailored employment support, which is informed by current working practices.”

Getting people back to work

“While it’s positive that the government wants to encourage people back to work, it is going about it the wrong way,” says Dominic Wade, co-founder of specialist HR and accountancy recruitment firm Wade Macdonald.

Mandatory placements for people deemed to be inactive in their search for work will “only be possible” if businesses have the money to invest in hiring, he says. “The principle is good, but the government will likely find the scheme hard to manage and challenging to make enticing.”

Wade adds that previous provisions announced about supporting workers over 50 and the ‘returnship’ scheme to entice the over 50s back into work “seem to have evaporated”.

“This proportion of the population represents a large pool of talent who are highly skilled but put off working by high taxes,” he says. “In other words, there is no incentive for them to return. There’s a running theme here, which the government is failing to address.”

‘Missed opportunity’ over workplace benefits?

David Williams, head of group risk at Towergate Health & Protection, says the statement is a “missed opportunity to tap into the power of employee benefits”.

The Back to Work Plan is “too focused on sick and disabled adults already out of work, rather than how to prevent the illnesses in the first place” and did not address how employers can manage absent employees more effectively to avoid losing them from the workforce, he says.

While Williams welcomes the announcement that the government will invest nearly £800m in health, including mental health support, over the next five years, he says it “would have been great to see some measures pointing towards the fantastic services that already exist and that many forward-thinking employers already provide. 

“Mental health counselling, employee assistance programmes and cognitive behaviour therapy are all services that employers can quickly and cheaply provide for their staff via their employee benefits programme.

“How good would it have been if the government had introduced tax breaks or subsidies on these services so that employers could support their workers during illnesses or, even better, help to prevent their illness in the first place?”