One in five UK SMEs rethink hiring under the Employment Rights Act

One in five UK SMEs rethink hiring under the Employment Rights Act

Employment Hero, a global AI-powered employment platform, has launched HeroForce, a new fully-managed employment model designed to centralise and automate the world’s most complex regulatory landscapes. 

HeroForce is the evolution of the Employer of Record (EOR) model, a structure that has long helped businesses hire internationally without establishing local entities. Where traditional EOR solved the complexity of hiring across borders, HeroForce applies the same principle regionally and gives small businesses in the UK a way to take on new employees without absorbing the full UK payroll and compliance obligations that come with it.

The Employment Rights Act is fundamentally changing the cost and complexity of employing people in the UK. Research commissioned by Employment Hero found that one in five SMEs have already planned to increase their use of contractors or temporary staff to help mitigate the risks the legislation introduces, while for many others the ERA has triggered a more cautious approach to hiring altogether – a trend with serious consequences for business growth and job creation. This comes against a backdrop of rising regulatory burden: the annual cost of compliance for SMEs already stands at £36 billion, consuming 379 million working hours every year.

Where the Employment Rights Act and increased compliance burden adds complexity, HeroForce helps absorb it. Employment Hero becomes the legal employer and in doing so, manages a broad spectrum of UK payroll and HR elements on behalf of the business, from PAYE and National Insurance contributions to auto enrolment pensions, holiday pay, Statutory Sick Pay and Statutory Maternity and Paternity Pay.

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