Why are so many people against employing?

I see lots of posts on the 4N forum about how outsourcing/subcontracting work is the way forward, and employing staff is old fashioned/just for stupid business owners that don't know better.

If your workload is very sporadic then I see why subcontractors might be preferable, but otherwise, I don't get it.

Is it just fear caused by HR horror stories about being taken to employment tribunals, or the complexities of the PAYE system?  Or is it more just being obligated to pay them £X each month regardless of whether your business made a big profit that month or not?

Overheads plain and simple. I can compete with (and have/do) massive media agencies and wipe out their 'starting at 20k because we have 20 ginger guys in suits and a soho address' inflated costs. I can also bring to the table the right team for almost any project because of the flexibility of having a team of outsourced resource. couldnt do that if we had a fixed employee base.

Outsourcing has its place but my personal view is that a business can be more successful when supported by good, well-motivated staff.  Certainly there are a lot of disincentives (red tape, etc.) and it is easier to sack a sub-contractor than an employee.  However, will a sub-contractor or outsourcer ever be as motivated for your business to succeed as a good employee?  Sometimes yes, but probably only when you are seen as being a major client.  

A healthy business will (IMHO) have a mixture of core staff on the payroll and access to external services for panic periods or times when extra specialist knowledge & skills are needed.   Shying away from being an employer can restrict future growth opportunity.  A lot of "staff" problems are probably down to poor management rather than poor staff.    Poor management skills will then be just as much an issue when using outside resources. 

 

 

Fear of not being able to get rid of crap people.

Certainly with smaller companies all the issues you raise act as a barrier to employing people and then some!

I work with small employers (in numbers, not height you understand!) and there are a lot of battered and bruised MD / Owners out there.  Either because of horror stories from others, urban myths or personal experience.  Health & Safety, Employment Law, Payroll and HMRC considerations all put the frighteners on potential employers and the media doesn't help with stories of huge payouts at tribunal!

Yup! Agree with Jo.

Having run hotels for 8 years, the toughest part was the staff. They jerk you around without a care in the world, but they also seem to be extremely well-briefed by the local CAB as to how to screw you when they leave/get sacked. I stress, we did also have a very few excellent staff in that time, but the vast majority were problems. I would always outsource if it were feasible.

Yep all of them, just equate to one big 'sod that' for me.

The no-win / no-fee culture that allows pretty much anyone to get you into a tribunal where even if you as an employer win you face costs on average of £18k is ludicrous.  Have seen both a client and a friend get screwed by this in the last 12 months.

The whole business of employing people seems to be designed to be as unappealing as possible.

 

All of the above, as a family we've been there, done that and got the T shirt.

It'll be a cold day in hell before we go down that route again.

Bitter? Moi?

 

18K??  Danny who are you using for advice??!!

I just have to add that I offer MUCH better value for money than that! (I can't say that I;m cheap for obvious reasons!!) ;-)

I think the honest truth is that most businesses can't support employing someone, and whilst there is another option, people will choose that.  

You can only grow so much before you need to hire staff. 

I can completely understand Matt's reasons. Big project comes in, get the specialists you need involved to do it, then next month you don't need them.

...but I wonder how much of the other stuff is actually a real problem, or whether it's media hype.  Interesting a few of you above imply you've actually had nightmare employees before, rather than just having read about them in the tabloids...so perhaps it's more of a "real" problem than I thought.

FWIW we've got 2 employees (not including me) and will soon be looking to take on a third.  Unlike Matt though our work is very regular and consistent, so whilst some months are busier than others, I think there's less risk of suddenly having no work for anyone to do.

Chris, my horror stories were very real! Fortunately, never lost a case against me, but even the big one that I won (yes, won!) cost me over 3 grand. I even had one member of live-in staff that it took me 2 months to evict after sacking him!

I do think a lot of the fear is media hype. Yes of course for those who have had nightmare employees it is a hideous painful and epensive experience...BUT I still think those are the exceptions rather than the rule.

Dealing with an employee who isn't performing isn't actually as difficult as some would have you believe and now that the qualifying period has been raised to 2 years you have a long time to decide if someone is going to work out before they can take you to tribunal for unfair dismissal.

The red tape around employing is not as trciky as it first seems either - most of it is pretty straightforward and can be dealt with very sensibly.

As for tribunals - i've been working freelance in HR since 2001. In that time with all of our clientsI have had to help respond to four tribunal claims, two of which were dealt with before we even got a hearing date scheduled, one of which was thown out by the judge on the day, and the other ofwhich we won and all the legal costs were covered by insurance.

i should add a caveat to the above - a lot of employment law is bonkers and over complicated BUT there are ways to navigate it that are straightorward and simple to comply with if you know how!!

Once upon a time, I owned a contract cleaning company. Three months after landing a new contract, I received a letter from a 'no win no fee' solicitor acting on behalf of an employee of the previous contractor. The solicitor claimed, on the basis of TUPE regulations, that I had effectively become her employer when I started the contract.

The fact that this person was so poor at her job, & was the principal cause of the loss the contract, was deemed not relevant. If I had employed her, my new client would have terminated our contract. Because I did not employ her, I was taken to an Industrial Tribunal for unfair dismissal. I had never met her, nor did I even know her name, yet I had 'unfairly dismissed' her.

Cue 15 months of legal wrangling, appeals, costs & hair loss, and her case was eventually dismissed.

So, never mind the perils of employing someone. Being perceived to have employed someone is just as much of a minefield. I have not employed anyone in the conventional sense since that time, & doubt if I ever will.