The government has announced it will conduct a review into how it can best support a thriving future UK labour market. The review will be led by MP Matt Warman and will build on existing government commitments, including those made in response to the Matthew Taylor Review as well as new ways of working, including hybrid working. We’ll consider that.
According to the government’s press release, Warman will look at how the government could best shape the UK’s labour market so it is fit for the future, including short and medium-term barriers and the challenges that the labour market might face such as the role of automation. He is also expected to explore the role of local labour markets in facilitating access to good jobs as we level up across the country, as well as where skills development is most needed to drive future economic growth.
People Management reports on this and questions whether another review is what’s needed. It has been five years since the Taylor Review ‘Good Work’ was published and many of its 53 recommendations have still not been translated into legislation. It’s something many of us had hoped the long-awaited employment bill would have changed – the employment bill was a notable omission from this year’s Queen’s Speech, the second year in a row it has been overlooked.
On Monday Matt Warman was interviewed on BBC Radio 4’s PM programme and he talked in detail about where hybrid working fits into this. He talked about how the new world of flexible working is having a positive impact on employees’ health, wellbeing, and work-life balance but how it does bring with it some challenges. His review will look at all of that to make sure both employees and employers maximise the benefits of hybrid working arrangements.
We agree, there are certainly many challenges with hybrid working and we’ve been working with a number of clients to address some of them. So, for example, with large numbers of staff rarely in the office and some team members only working on alternate days, it’s down to the HR team to find new ways of building a sense of inclusion and engagement. One way to address that problem is to rethink your benefits packages – something our share plans team has been advising on. So, the challenge for businesses now is how to make the package relevant for all employees, no matter where they are working. So the thinking is, by allowing employees to build their own individual benefits package they immediately feel valued, which in turn helps keep them engaged and motivated.
So let’s hear more about that. Lynette Jacobs has been fronting that work and she joined me by video-link from Manchester to discuss it. I started by asking Lynette how a review of share plans can help to make employees feel engaged and valued?
Lynette Jacobs: “So Joe, I think I would always have said, and would always say to companies, that the importance of having employee share schemes is there because of the opportunity for your employees to feel part of the wider group and I think even more so now as we're coming out, hopefully, of the Coronavirus pandemic, finally. For the majority of companies, employees will not be based in their offices full-time, some will be there 50% of their working week, some may be there for an even smaller part of their working week and, therefore, if you're sitting at home at your own desk, in your own office, the fact that you have shares in your company share plan will make you feel part of that company far more. You need to have ways to make your employees feel part of the group, albeit that they're not physically in the office, and just having the share plan and offering it to the employees, again, that's sort of a step in the right direction but what you need to do more, so it has the full impact, is to communicate those plans well to the employees so they understand the potential benefits to them of participating in them whilst, of course, not overselling, keeping away from any financial advice. Then if the employees are participating in the plans, don't only talk about the plans at the time there's a launch, but continually refer to them. So, if you can say what the share price is, from time to time, so that they can see that, all being well, the share price is going up and their value of their reward is going up. If there are performance conditions they need to meet, let's make it easy for them to understand the extent to which those performance conditions are being met as the award progresses throughout its life.”
Joe Glavina: “We know very best employee benefits programmes offer a degree of flexibility so that each employee can pick and choose their own portfolio of benefits that work for them. Can share plans be tailored to individual needs in that way?”
Lynette Jacobs: “It probably depends on the type of plan, I’d say, Joe. So, if you have one of the tax-advantaged all-employee share plans, the company has to offer it to all employees who meet certain requirements. So, generally, as long as they haven’t worked there for more than five years, they have to be offered the opportunity and companies will tend to have a much shorter qualifying employment period, maybe 12 months, before the date of grant, six months or even just anyone who's employed at the date of grant. So, the company would definitely need to invite the employees to participate in those plans, they couldn't choose not to. I guess the employee to choose themselves not to but I think it would be really against the legislation, I would imagine, for those plans to say, you know, you pick (a) or (b). So I don’t think you could do that. Potentially the company may have decided that it would be willing to grant the employee an option under a discretionary plan the company could then say, well, you could choose to have an option under this plan. or an award under this plan or, alternatively, to have your gym membership. I think if you're going to think about doing something like that you should speak with a friendly lawyer, for example, Pinsent Masons, to just check how you're doing it to make sure you don't come up against any of those things and fail to meet the requirements of the tax legislation.”
Joe Glavina: “So I guess there’s an important communications exercise here for HR?”
Lynette Jacobs: “Yes, absolutely, communication is everything. Again, as I say, just being very careful if it's a tax-advantaged plan that you don't run into anything where the plan you're planning to give to your employees ends up not having the tax advantages you were hoping for because of something you've said or done. Also, just making sure that you're not committing the company to granting options under a plan where it becomes a contractual right and, again, we would always warn against the company against doing that. But, yes, definitely, communication is everything so that employees understand what's available to them and the potential benefits and also potential downsides of those plans.”
Finally, on the subject of share plans, be aware that in April we saw the 1.25% rise to NICs designed to support health and social care – the start of the Health & Social Care Levy – a significant extra cost of employees and employers alike. Back in March shortly before that took effect Lynette talked to this programme about that issue and how share plans will be affected. That is: ‘Share plans provide opportunity to mitigate NICs rates rise’ and is available for viewing now from the Outlaw website.