New research from the Institute of Directors reveals that over
seven in 10 (72%) business leaders believe that the Employment
Rights Bill will have a negative impact on UK economic growth.
The research also investigated how business leaders plan to
respond to the measures in the Bill. Half (49%) reported that
they will be less likely to hire new staff, a third (36%) stated
that they will be more likely to outsource roles or operations to
other countries, and a quarter (23%) reported that they will be
more likely to make redundancies. Slightly over half (52%) of
directors also reported that they will be more likely to invest
in automation.
Alex Hall-Chen, Principal Policy Advisor for Employment at the
Institute of Directors, said:
"The Employment Rights Bill, in conjunction with the recent
increase in employer National Insurance Contributions and
above-inflation increases to the National Living Wage, is
significantly damaging business hiring intentions and confidence
in the UK economy.
"This research clearly shows that the Bill will undermine the
government's key aims of securing the highest sustained growth in
the G7 and achieving an 80% employment rate.
"Government has yet to show that it is listening to the concerns
of business about the potential unintended consequences of the
Bill as it is currently drafted. As the Bill continues its
passage through the House of Lords, we are calling for targeted
changes to the Bill to restore business confidence in hiring and
investment in staff in the UK.
"If there is a silver lining, it is that more employers will
invest in automation and other measures which may improve the
UK's stagnating productivity levels."
The Institute of Directors has set out a number of key changes to the Employment
Rights Bill that would significantly soften the negative
impact of the reforms.
Full results
483 responses from across the UK, conducted between 15-28 May
2025. 14% ran large businesses (250+ people), 19% medium
(50-249), 24% small (10-49 people), 31% micro (2-9 people) and
12% sole trader and self-employed business entities (0-1 people).
What impact, if any, do you believe the Employment Rights
Bill would have on UK economic growth?
|
Strong positive impact
|
2.9%
|
|
Somewhat positive impact
|
14.5%
|
|
No impact
|
7.2%
|
|
Somewhat negative impact
|
35.6%
|
|
Strong negative impact
|
36.6%
|
|
Don't know
|
3.1%
|
What impact, if any, would these reforms have on your
organisation's approach to the following:
|
|
More likely
|
No impact
|
Less likely
|
Don't know
|
|
Hiring new staff
|
5.8%
|
42.2%
|
48.7%
|
3.3%
|
|
Investing in automation
|
52.8%
|
39.3%
|
2.1%
|
5.8%
|
|
Making redundancies
|
22.8%
|
65.6%
|
4.3%
|
7.2%
|
|
Outsourcing roles/operations to other countries
|
35.8%
|
51.6%
|
4.1%
|
8.5%
|
