Guide to Hiring in the UK
Attracting and hiring top talent can be a daunting task, especially in the highly competitive UK job market. To succeed in hiring the right candidates, companies need to have a strategic approach to recruiting and be aware of the latest trends and best practices. In this article, we will discuss everything you need to know about hiring in the UK, from sourcing and screening candidates to onboarding and retention.
Are you looking for a high quality partner to drive hiring in key geographies for your business?
Book a meeting with our global expansion expert for the UK to discuss your expansion strategy today
Can I Hire in the UK?
Companies from abroad can hire employees in the UK, but they need to register as an employer in the UK, comply with UK employment laws, have a presence in the UK, and obtain the necessary visas or work permits for their employees. Seeking expansion advice is important to ensure compliance with UK laws and regulations.
Working Hours
In the UK, full-time employees cannot work more than 48 hours worked on average, normally averaged over 17 weeks. This law is sometimes called the ‘working time directive’ or ‘working time regulations’. However, employees can opt out of the 48-hour week if they wish.
There are some exceptions to this rule:
● Where 24-hour staffing is required
● In security and surveillance
● Where working time is not measured and you’re in control, for example, you’re a managing executive with control over your decision
Salary
The salary system in the UK typically involves payment of a fixed amount of money, either on a monthly or a weekly basis, to employees for the work they have performed. The amount of salary is often determined by the job role, level of experience, and the industry in which the employee is working.
Employers are required to deduct income tax and national insurance contributions from the employee’s salary and pay these to HM Revenue and Customs (HMRC) on behalf of the employee. The amount of income tax deducted from the salary depends on the employee’s income level and tax code.
Taxes
There are a few taxes that businesses wanting to hire in the UK should know about:
● Employer’s National Insurance contributions: Employers are required to pay National Insurance contributions (NICs) on their employees earnings above a certain threshold. The rate of NICs vary depending on the employees income level.
● Pay As You Earn (PAYs) income tax: Employers are required to deduct income tax from their employees salaries and pay it to HM Revenue and Customs (HMRC) on their behalf. The amount of income tax deducted depends on the employees income level and tax code.
● Corporation Tax: Companies are required to pay corporation tax on their profits. The current rate of corporation tax is 19%, although it is set to increase to 25% for larger companies 2023.
Removal Process
As an employer in the UK, you can terminate an employees employment contract, but it must be done in accordance with employment laws and regulations. You must have a valid reason for termination, and the process must be fair and reasonable.
The UK government states that employees who are not fired for cause are entitled to receive a written notice of the termination. The minimum statutory notice periods are:
● At least one week’s notice if employed between one month and 2 years
● One week’s notice for each year if employed between 2 and 12 years
● 12 week’s notice period if employed for 12 years or more
Authorized Leave
In the UK, employees are entitled to a minimum of 28 days of annual leave per year. Employers can include bank holidays as part of their employees’ annual leave entitlement or give them as extra days off. Annual leave is usually calculated in days or hours, and employees must be paid their normal rate of pay for annual leave.
Employers can allow employees to carry over up to eight days of unused annual leave into the next year, but this is not a legal requirement. Employees must request annual leave in advance, and employers can decline requests if they cannot accommodate them.
Maternity leave is mandatory for eligible employees in the UK. Employees expecting a child can take up to 52 weeks of maternity leave. The earliest that leave can be taken is 11 weeks before the expected week of childbirth unless the baby is born early.
Paternity leave is also mandatory for eligible employees in the UK. However, only 1-2 weeks of this can be paid under UK employment labor laws.
Cost of hiring in the UK
Labor Costs
United Kingdom’s labor cost index in 2021 stood at 131. The index recorded a growth of 3.5% in 2021 compared to the previous year. Between 2010-2021, the index in the United Kingdom increased by 30.8%.
The labor cost index measures change over time in wage and salary cost for employee jobs, unaffected by changes in the quality or quantity of work performed. The labor cost index is representative for all sectors.
Hiring and Recruitment Costs
The cost of hiring in the UK can vary depending on several factors, including the industry, the role, and the location of the business. Some of the main costs associated with hiring in the UK are:
● Recruitment costs: These can include advertising, agency fees, and other expenses incurred during the recruitment process.
● Training costs: Employers may need to provide training to new employees, which can be a significant expense depending on the nature of the role and the level of expertise required.
● Onboarding costs: Employers may need to invest in equipment and resources for new employees, such as computers, software, and uniforms.
It is important for employers to budget for these costs when hiring new employees and to comply with relevant employment laws and regulations.
Employee Benefits and Perks
The UK government does not state many other mandatory benefits other than paid leave. However, UK employers often provide benefits such as private healthcare, pension schemes, and some provide subscriptions/memberships to services/facilities like a local gym. Most benefits and perks are up to the discretion of the employer, although many companies invest in them to attract top talent.
Work Alongside a Global Expansion Expert to Effortlessly Move into the UK Market
Many businesses have succeeded in their efforts in expanding out of the U.S. and into the European market. More than half of them, however, partnering with a team of professionals that specialize in global recruiting and expansion. With regional experts by your side every step of the way, our team of professionals can help ensure you can expand beyond the border successfully. From taking on top talent and managing payroll to opening bank accounts, maintaining compliance with authorities, and understanding cultural values.
To support and advance your expansion strategy, talk to one of our experts today.
Are you looking for a high quality partner to drive hiring in key geographies for your business?
Book a meeting with our UK global expansion expert to discuss your expansion strategy today