Menzies LLP advises businesses to prepare for higher staffing costs under zero-hour proposals

Willorna Brock, senior HR consultant at accountancy and business advisory firm Menzies LLP, has advised businesses to prepare for higher staffing costs and more paperwork if proposals to tighten rules on zero-hours contracts go ahead. 

This comes as retailers have raised concerns that Prime Minister Andy Burnham’s plans will make it harder to hire for flexible and youth roles. 

Government research found Labour’s proposals for guaranteed-hour contracts and paying for cancelled shifts could cost UK businesses nearly £3bn a year. 

This is expected to add to the compliance burden for retail, hospitality and leisure firms in the South and across the country, which are already facing falling consumer demand.

Brock said: “Government proposals on guaranteed hours and reasonable notice of shift changes have been priced at around £2.9bn a year, and the largest component comes from paying for shifts cancelled at short notice rather than from guaranteed hours. 

“In Britain’s retail, hospitality and leisure sectors, where trade differs daily, a notice requirement of up to a month asks employers to predict demand with little room to adjust when it shifts, turning the routine judgement to trim a rota for a quiet week into a legislated payment obligation. 

“Greater security for workers is welcome, but these policies risk leaving employers carrying higher fixed staffing costs through quieter periods while running short-handed at their busiest, with the administrative burden of evidencing each change falling on businesses already short of time, resource and headspace.”

Brock added: “Employers are therefore likely to become more cautious about recruitment, particularly for entry-level, part-time and seasonal roles.