Fractional HR – the key to HR concerns?

Now that Labour has taken the political reins what will this mean to employers and especially SME employers when it comes to employee rights?  The Labour Party’s approach to employee rights centres on significantly enhancing protections and working conditions for employees and workers across the UK. Could fractional HR play a part in your organisation?

What is fractional HR?

The proposed changes have the potential to fundamentally impact the way in which businesses operate with respect to their employees and are likely to increase employer costs and risks. Such an impact will help shine a spotlight on ensuring there are robust HR practices in place but will also apply pressure on budgets and costs for managing and retaining employees.

Now more than ever may be a time to consider fractional HR.  A fractional HR person is someone with broad and deep expertise available to support companies (typically SMEs) that need help with that function on a part-time, interim capacity. Experienced and robust enough to credibly interact with the founders/CEO of a business but with the resources and network that can quickly create value as the business grows and evolves. Fractional HR can support with  people planning, HR strategy, learning and development options, cost management, change management and much more besides, including your day-to-day HR needs.

How can fractional HR help?

  • Cost-effective: A ‘fraction’ of what it would cost to hire a full-time executive, fractional HR can provide the same level of senior HR expertise without the need to hire a full-time head of people. Employing a full-time senior head would cost at least three times more – once you include base salary, bonus and benefits, additional employers’ National Insurance contributions. This is particularly beneficial where a full-time employee is not required but the expertise is.
  • Breadth and depth of experience and knowledge: A fractional HR consultant is able to translate practices learned at bigger companies into something that works for the unique culture of a SME, building a positive culture that gets in front of any potential issues before they emerge.
  • It’s temporary and scalable: In addition to access to an experienced, senior resource at a fraction of the cost the consultant can be accrued differently from a regular full-time employee and therefore not recorded as a fixed overhead.  And, once any changes are put in place and the business arrangement ends, there are no added costs typically incurred from hefty severance payments. However, should you need to switch that additional senior back on again further down the line, that option is still there.

What’s an alternative to fractional HR?

If fractional HR isn’t something that your organisation is able to commit to right now and would rather wait until the new government settles in, then investing in your own HR expertise is a great alternative – especially if you’re a SME. For those responsible for HR – be it as an operations director, finance director or an office manager – a HR development and mentoring programme will quickly help you to understand the impact of these altered employee rights on your current working practices, as well as what changes you may need to apply to your policies and processes once these protections become a day-one right.

How can a HR development and mentoring programme help?

Such a programme will vary between consultancies; at People Business, through a series of 121 training and mentoring sessions, we fast track those responsible for HR (but not necessarily with the relevant qualification) to quickly navigate the impact of any new legislation on a business. We focus on the processes to follow in order to mitigate any potential tribunal claims, proactively implementing ‘best practice’ initiatives that ensure you are managing equality, diversity and inclusion in the workplace and bring greater clarity to managing performance from day one.

Should you ‘wait and see’ or act now?

Under the Labour proposals, areas of the law that enable employers to be more agile with how they react to fluctuations in their business will also be lost. While it may be tempting to adopt a ‘wait and see’ approach, the promise from Labour to introduce an Employment Bill within the first 100 days, means we could see draft legislation as early as autumn this year. Whether it’s fractional HR or investing in your HR resources, now is the time to start making plans.

How People Business can help

At People Business we are experienced at providing fractional HR support for our SME clients whether it’s on an interim basis for larger businesses (while the client hires someone full time) or on an ongoing retained basis where the consultant is seamlessly embedded into the business as part of a leadership team on an ongoing basis. The consultant uses their experience and expertise to allow a business to navigate complexity and risk as it grows and/or undergoes organisational change. Additionally, our HR development and mentoring programme is useful and practical and will help non-HR professionals position their organisation to adapt to changes as they arise.

If you are looking for help with planning for the changes on our horizon and their impact on your business, feel free to get in touch and one of our consultants would be happy to discuss your requirements.