Sam Gyimah is the MP for East Surrey
Business is back in the dock. And the outright hostility to the Beecroft proposal for ‘no fault dismissals with compensation’ highlights how deeply ingrained suspicions of business (the organisations with the profit motive) are in some quarters. Yet it is businesses that will drive our recovery.
No smart employer would want to gain a reputation for firing as quickly as they hire. As anyone who has run a business knows, attracting and retaining talent is the most time consuming and costly part of the job. Recruitment fees for a new employee can easily run to 25% of the first year salary, after which the employee has to be trained and given at least three months, on full pay, to bed in to the new role. So before most employees have added value to their new company, the would-be employer has incurred significant costs just to have them on the payroll. Having been through the trouble of assembling a team, again smart employers put in place perks, training opportunities and team bonding activities because they realise that people are the greatest asset of any business. In fact, the job insecurity for employees in a hire-and-fire culture means that most employees will gravitate towards companies that offer better pay and employment protection.