Only one in ten businesses think employment legislation is ‘fit for purpose’. Just a third of businesses are prepared for new pensions reform from October.

Just one in ten businesses think that existing employment legislation in the UK is fit for purpose, according to a new YouGov survey commissioned by leading recruitment specialists, Brook Street. The research found that many businesses are burdened by the complexities of red tape and are struggling to keep on top of new regulations, with just over a third of businesses (37 percent) saying they felt ready for the pensions reform being introduced in October.

The YouGov survey, which was conducted with 553 British business senior decision-makers as part of Brook Street’s Survive & Thrive campaign, found that just nine percent of respondents think that the UK’s existing employment legislation is fit for purpose.

Almost a fifth of businesses (18 percent) said that it was ‘over-engineered’ and 16 percent of respondents said it simply doesn’t give businesses the flexibility they need. The research highlights some of the anxieties that businesses have around employment regulations and the impact that this has on their hiring decisions. Almost two-thirds (62 percent) of businesses questioned felt that employment regulation has a negative impact on their business, citing that it makes them nervous about dismissing under-performers (16 percent) and that the intricacies of the legislation may leave them at risk of being non-compliant (16 percent). Red tape is also stifling job creation for many businesses with 40 percent of respondents agreeing that employment regulation deters them from taking on new people.

Erika Bannerman, Sales & Marketing Director of Brook Street, says: “The complexities of employment legislation are placing a heavy burden on the shoulders of Britain’s businesses. While steps are being taken to reduce red tape, it’s clear from our conversations with businesses that many of them are still struggling. Smaller businesses are most at risk here as they have limited resources to keep on top of changes, so it’s vital they work with employment experts and recruiters who can guide them through the regulatory maze and give them the confidence they need to grow their business. That’s exactly why we have created our new Survive & Thrive campaign, to help support UK businesses as much as possible through these uncertain times.” The research highlights some of the challenges complex regulation presents, with just over a third (37 percent) of businesses indicating that they are prepared for the forthcoming pensions auto-enrolment regulation, which will come into force for many businesses from October 2012. Worryingly, just over a quarter of businesses (28 percent) said that they were not even aware of the legislation.

Bannerman concludes: “The fact that so many businesses are unprepared and even unaware of this important change in legislation is deeply worrying. It suggests that businesses may be struggling to keep on top of legislation much more than they realise. In an uncertain economy and with layers of legislation to get through it can be difficult to have the confidence to invest in people but with the right advice, the right strategy and the right people, the business benefits are clear. Knowledge is power, and by taking the time to understand regulatory requirements, businesses will be in a much stronger position to take on new talent and move their organisation from merely surviving to thriving.”