Hiring in a new country can be a complex and challenging process, with unique laws, regulations, and cultural differences to consider. This guide is designed to help you navigate the employment system in the UK, providing an in-depth overview of the job market and recruitment landscape – from contractual nuances, up to financial implications and immigration considerations. Our resource outlines the components you will need to create a comprehensive recruitment plan for your local hiring needs.
The UK has emerged as a regional leader in economic growth and job creation in recent years. Its favourable business environment and highly skilled STEM workforce have made it an attractive destination for international companies seeking to expand in Europe. Despite the global economic challenges, the country’s employment rates have been on a positive trend. In April 2023, the national unemployment rate stood at 3.8%, significantly lower than the EU average of 6.6%, indicating a relatively stable market while providing ample employment opportunities.
The country has become a hotbed for cutting-edge technologies, paving the way for lucrative employment opportunities in engineering, data science, and software development, with highly competitive salaries. The thriving startup scene and numerous established tech companies in the country make the tech industry a major driver of job creation. Additionally, the finance industry is experiencing significant growth, leading to a surge in job openings in areas such as accounting, banking, and investment management. As the economy continues to expand, businesses are increasingly seeking out financial services and investment opportunities, driving demand for highly trained finance professionals.
To ensure fair treatment and protect employee rights, regulatory oversight of the employment sector is provided by key government agencies, including the Department for Business, Energy and Industrial Strategy (BEIS), and employment tribunals and courts. Occupational laws cover different areas, such as minimum wages, working hours, safety, discrimination, equal pay, maternity and paternity rights, unfair dismissal, redundancy, whistleblowing, unions, and collective bargaining. These laws are constantly updated and amended to remain effective as societal needs evolve, maintaining safe working conditions and providing avenues for dispute resolution.
One of the factors that make the UK appealing to foreign companies is its relatively low labour costs compared to other EU countries. Despite ranking 22nd out of 27 EU member states in average hourly wages, the UK remains highly competitive in the EU due to its favourable labour market conditions and high degree of flexibility, which enables employers to easily adjust to changing economic conditions.
Foreigners seeking employment in the UK have various work visa options depending on their skills, qualifications, and employment needs. These include the Skilled Worker Visa for professionals who have been offered a job, the Intra-Company Transfer Visa (ICT) for employees shifting to the UK branch of a multinational company, as well as the Temporary Worker Visa for short-term hires. Leaders in their field may apply for the Global Talent Visa, while the Start-up Visa and the Innovator Visa are for aspiring and experienced entrepreneurs alike. Graduates with an eligible degree can also settle temporarily in the UK under the Graduate Route. The UK government provides official visa resources and immigration guidance, offering up-to-date and accurate information on each visa category’s eligibility criteria and application process.
When it comes to recruitment, the UK is marked by innovation and rapid change, with a growing emphasis on versatility, both on schedules and office location. The pandemic has accelerated the shift toward flexible work arrangements, intensifying the competition among employers. This compels them to adapt to novel technologies and evolving workforce trends in order to attract and retain exceptional professionals. As a result, recruitment strategies in the UK now emphasize diversity, inclusion, and interpersonal abilities. Employers actively seek candidates who possess outstanding communication and leadership skills, which further highlights the growing significance of soft skills.
However, the increased demand for skilled professionals has led to a shortage of workers in certain industries such as IT, engineering, and healthcare. Collaborating with a recruitment agency in the UK can bring significant benefits for employers, such as a faster job application process, cost savings, and a wider reach for job posts. In addition, such collaboration offers access to a wide range of services that can help businesses navigate the local job market and ensure compliance with employment laws and regulations.
Overall, the UK labour market has remained resilient amidst the pandemic, boasting one of the lowest unemployment rates in the European Union. Looking towards the future, the recruitment environment in the UK presents numerous opportunities for businesses to tap into a wider pool of talent and build diverse, global teams.
Job Market Overview
As of 2023, The UK’s job market is experiencing steady growth, with increasing labour force participation and declining unemployment rates. Diverse opportunities are available across various sectors, with the IT sector expanding rapidly. The gig economy is also growing, particularly among younger generations.
According to the latest report from the Office for National Statistics (ONS) there are 1,400,000 live vacancies in the UK.
Job Benefits: Mandatory & Common Optional Benefits
Several benefits are required by law for UK employers to provide to their employees, while others are optional but commonly offered. These include:
- Required benefits:
- National Minimum Wage: Based on age and employment status (detailed further under the Employment tax & costs section).
- Statutory Sick Pay (SSP): Up to 28 weeks of SSP for illness or injury.
- Paid Annual Leave: Minimum 5.6 weeks (28 days for full-time workers) of paid annual leave, including public holidays.
- Workplace Pension Scheme: Part of the automatic enrolment scheme for retirement savings.
- Maternity, Paternity, and Adoption Leave: Female employees can take up to 52 weeks of maternity leave. Paternity and adoption leave options are available.
- Optional benefits:
- Private Health Insurance: For additional medical coverage.
- Pension Contributions: Additional contribution to employees’ pension schemes.
- Life Insurance: Life insurance coverage in case of employee death.
- Dental Insurance: Covering dental treatments and services.
- Flexible Working: For working arrangements such as part-time hours, remote work, or flexible schedules.
- Employee Assistance Programs (EAP): Confidential counselling and support services for personal and work-related challenges.
- Fitness and Wellness: Access to gym memberships or programs designed to encourage employee well-being.
Note: Optional benefits may vary among employers. Consult legal and HR professionals to ensure compliance and determine suitable benefit offerings.
Remote work has witnessed remarkable expansion in the UK, fuelled by technological advancements and the profound influence of the COVID-19 pandemic. In response to these shifting dynamics, employers across the country have increasingly recognized and embraced remote work as a viable and valuable option. Notably, hybrid work models that blend remote and in-office work have gained significant popularity among both employers and job seekers. As the competition for skilled professionals intensifies, providing remote work opportunities has become imperative for organizations aiming to attract and retain top talent.
Key statistics based on data collected between September 2022 and January 2023:
- 44% of workers practiced home or hybrid working, while 56% commuted.
- Among hybrid workers, 28% split their time, while 16% exclusively worked from home.
- 46% of commuters couldn’t work remotely, compared to 10% who had the option.
- Younger workers (16-24 years) had the lowest remote work rate (6%) and highest commuting rate (79%).
- Workers aged 34-44 had the lowest commuting rate (48%).
- The 16-24 age group had the highest percentage (65%) without remote work ability.
- Workers aged 25-34, 35-44, and 45-54 had higher rates of home or hybrid working.
Employment Hubs in the UK
As of 2023, the following are the main business centres ranked by employee count and number of organizations:
In the UK, the recruitment industry operates without strict regulations. Medium to large-sized companies usually have internal recruitment teams, but they may engage specialised recruitment agencies for support in finding qualified candidates when needed and within budget. There is a wide range of local and international recruitment agencies, as well as freelance recruiters, mainly located in thriving urban centres.
A noticeable trend in recent years is that large international agencies have started outsourcing or embedding their recruiters within specific companies. These agencies have subsidiaries in multiple locations worldwide, specializing in various sectors like IT, marketing, sales, and more. Recruitment agencies in the UK typically work on success fees or retained contracts, charging fees of around 15% to 25% of a candidate’s annual salary.
According to the Office for National Statistics (ONS), the latest available data indicates the total labour force in The UK at approximately 67 million people. This includes both the employed and those unemployed who are available and actively seeking work, divided as follows:
- 76% of the population is employed.
- 38% of the population is unemployed.
Gender Divide across industries
The UK workforce remains divided along gender lines, with a ratio of 43% women to 57% men. This disparity reflects the continuing challenges that women face in achieving equal representation and opportunities across industries and professions:
The country’s talent distribution is concentrated in key regions, with London being the primary hub, accounting for approximately 29.2% of professionals. Other notable areas include Manchester (4.4%), Greater Bristol (3.8%), Greater Leeds (3.0%), and Greater Glasgow (2.5%).
Based on our Talent Insights Report, professionals in the UK spend an average of 5.5 years working for the same employer.
This rate fluctuates, however, based on factors such as industry, profession, and individual circumstances.
According to the Office for National Statistics (ONS), the largest industry sectors are:
Rank of titles in high demand
1y growth – The percentage change in the number of professionals with this skill, compared to the number of professionals one year prior.
Rank of skills in high demand
Main job boards and channels for sourcing candidates
Several prominent job boards are widely used in the job market. These platforms serve as a hub for job seekers and employers to connect and facilitate the hiring process. Some of the main sites used in the UK include:
- Indeed (www.indeed.co.uk)
- Reed (www.reed.co.uk)
- Totaljobs (www.totaljobs.com)
- CV-Library (www.cv-library.co.uk)
- Monster (www.monster.co.uk)
- LinkedIn (www.linkedin.com)
- Jobsite (www.jobsite.co.uk)
The UK offers diverse employment opportunities with different contract types to suit individual needs. Permanent positions are highly regarded for their stability and benefits, while temporary contracts provide flexibility for short-term projects.
In professions like IT, Engineering, and Construction, Limited Company Contracts or contracts through a Personal Service Company (PSC) offer greater flexibility. These contracts are subject to IR35 determinations.
Temporary contracts are common in administrative, customer service, and manual labour roles, making them suitable for short-term work.
The current employment status also reflects the prominence of permanent positions:
Permanent employment in the UK describes a work arrangement under which a company hires an employee for an indefinite period. This type of contract ensures a long-term commitment between the parties, resulting in greater job security and stability.
Key benefits include:
- Job safety: Permanent employees feel secure, leading to increased loyalty, commitment, productivity, and work quality.
- Multiple benefits: Entitlements like paid vacation, sick leave, and social benefits enhance employee satisfaction and attract top talent.
- Cost savings: Hiring and training expenses are reduced, ensuring a stable and reliable workforce with improved productivity and team cohesion.
Temporary & Fixed Term Employment
Temporary and fixed-term employment refer to work arrangements under which individuals are hired for a specific duration or for a specific project. Temporary employment typically has a predetermined end date, while fixed-term employment spans a specified period, providing flexibility for employers in project-based work or seasonal demands. During their employment period, workers are entitled to certain rights and benefits, including extension of their contracts based on the employer’s needs.
Key benefits include:
- Flexibility: These contracts provide employers with more flexibility in managing their workforce. They can quickly adjust their staffing levels to meet demand without committing to permanent hires.
- Decreased costs: Temporary and fixed-term employees are not entitled to severance pay if their contract expires or is terminated, allowing employers to minimize costs.
- Greater employee prospects: Temporary and fixed-term employees benefit from job security, and opportunities for professional advancement.
Day-rate contractors, Limited Company Contractors (LCCs), and Self-employed professionals (PSCs)
Day-rate contractors, Limited Company Contractors (LCCs), and self-employed workers operating through Personal Service Companies (PSCs) have distinct work arrangements in the UK. They are not classified as employees of the hiring company, handle their own tax obligations, and offer services for specific projects or tasks without long-term commitments.
These services are subject to legislation known as IR35 or the off-payroll guidance, which is overseen by HMRC. Day-rate contractors are engaged on a contractual basis and receive a fixed daily rate while LCCs and self-employed individuals operating via PSCs and operate their own companies and provide services as separate legal entities.
Key benefits include:
- Flexibility in workforce management: Employers can hire on-demand workers without committing to permanent hires, enabling them to scale their workforce as needed.
- Cost savings: Employee benefits and National Insurance contributions do not apply, unlike when hiring permanent employees.
- Specialized skills and expertise: They provide the precise skills and knowledge required to ensure a successful project execution.
- Competitive advantage: Having qualified professionals available enables businesses to deliver high-quality services to their clients, boosting their market presence.
- Agility: A speedy onboarding and offboarding process is highly advantageous to client companies.
Key Elements in an UK Contract
An employment contract is a legally binding document between an employer and an employee, with varying terms and conditions. Key elements typically included in UK employment contracts are:
- Offer and Acceptance: Clear offer of employment accepted by the employee.
- Parties Involved: Names, addresses, and start date of employment.
- Job Title and Description: Clear job title, brief role description, and main responsibilities.
- Hours of Work: Specified working hours, including overtime and flexible arrangements.
- Salary and Benefits: Stated salary, payment frequency, and additional benefits.
- Holidays and Leave: Entitlement to annual, sick, maternity/paternity, and compassionate leave.
- Termination of Employment: Notice periods for termination and grounds for immediate dismissal.
- Probationary Period: If applicable, duration and specific terms for assessing suitability.
- Confidentiality and Non-Disclosure: Protection of employer’s confidential information and trade secrets.
- Governing Law and Dispute Resolution: Specified UK employment law and preferred dispute resolution method.
Hiring Permanent Staff in the UK
Permanent, or indefinite-term contracts are the most common and favoured form of employment in the UK. As the name implies, this kind of contract doesn’t have a fixed end date and provides employees with long-term job security. Typically, the employee starts on a probation period of three to six months, allowing the employer to assess a new hire’s qualifications and suitability for the role as they get familiar with the work environment.
These contracts are highly sought after by employees as it guarantees their rights, benefits (social security, health insurance, paid holidays, sick leave, and severance pay), stability and continuity.
Hiring Temporary Staff in the UK
Hiring temporary staff is seen as a more flexible and cost-effective alternative to permanent employment. Especially in phases of business development, expansion, or peak activity, it helps fill labour gaps, enabling quick skill uptake.
Contract positions also benefit employers by testing the market before committing to long-term roles. In the long run, it is a cost-effective option, providing employers with a safe route to the qualifications they need. Further on, people who work for an employer longer than three months must be registered as “workers” with the HM Revenue and Customs (HMRC). This registration qualifies employers for tax incentives while benefiting from temporary staff contributions.
Hiring Self-Employed Workers or LTD Contractors in the UK
Hiring self-employed workers or limited contractors in the UK can be a valuable way to meet business needs and gain flexibility over job duration under less restrictive employment terms. There are, however, risks and obligations to take into account.
When engaging such workers, employers must fulfil their legal obligations, including ensuring compliance with tax and National Insurance requirements, meeting health and safety standards, and securing appropriate workplace insurance. So, it is advisable to stay on top of legislative developments that could influence contractual terms.
From an operational standpoint, clarity regarding work requirements, contract terms, quality expectations, milestone payments, and the rights and responsibilities of each party is crucial.
Foreign nationals from outside the European Economic Area can apply for various work visas and permits, each with different criteria, validity lengths, fees, and restrictions. These include:
- Tier 2 (General) Visa: Designed for skilled workers offered a job by a UK employer with a valid sponsor license. This visa operates on a points-based system.
- Tier 5 (Youth Mobility) Visa: Specifically available to individuals aged 18-30 from Australia, Canada, Japan, Monaco, New Zealand, Hong Kong, Republic of Korea, and Taiwan. It grants work in the UK for up to 24 months.
- Global Talent Visa: Available for outstanding international scientists, engineers, and mathematicians. This visa does not require a pre-existing job offer.
- Intra-Company Transfer Visa: Enables employees of multinational companies to transfer temporarily to a UK branch.
- Tier 1 (Entrepreneur) Visa: Allows entry into the UK for those interested in starting a new business or taking over an existing business.
Employment costs in The UK for both employers and employees consist of several payroll contributions, including national insurance, funding for pension schemes, healthcare benefits, childcare support, and other employee welfare programs, detailed as followed:
Employers and employees both contribute to UK employment costs through various payroll deductions, such as national insurance, funding for pension schemes, healthcare benefits, childcare support, and other employee welfare programs, notably:
Employer Payroll Contributions:
- National insurance: Contributions are based on set rates on behalf of all employees over 16 and who meet the applicable income bracket. For earnings between £169 and £967 per week, the rate is 13.8%. For earnings from £967 to £45,000 per week, the rate is 2%.
- Pension contributions: Employers are obligated to enrol employees in a workplace pension scheme, contributing a minimum of 3% of the employee’s salary into the pension pot.
- Student loan repayment: Student loans arrears are deducted from employees’ salaries at prevailing rates, applicable to salaries over £408 per week. Repayment rates range from 6% to 9%, depending on the employee’s salary.
- Income tax contributions: Employers are responsible for deducting income tax from employees’ pay checks based on their salary tier. The current rates are 20% for earnings between £11,850 and £46,350 per year, and 40% for earnings over £46,350 per year.
Employee Payroll Contributions
Employees may also be required to contribute to their pension schemes or opt for voluntary enrolment in other benefits plans, such as Private Medical Insurance, Childcare, or Medical Cash Plans.
The contribution rates vary across schemes and employers, but average 13.25% on earnings above £190 per week and 3.25% on additional earnings above £967 per week.
The UK’s tax brackets in 2023 are as follows:
- Personal Allowance: Up to £12,570 – 0%
- Basic Rate: £12,571 to £50,270 – 20%
- Higher Rate: £50,271 to £150,000 – 40%
- Additional Rate: Over £150,000 – 45%
As well, it is important to take into account:
- Minimum wage increases (2023):
- National Living Wage (aged 23 or over): £9.50 to £10.42
- Age group 21 to 22: £9.18 to £10.18
- Age group 18 to 20: £6.83 to £7.49
- Age group <18: £4.81 to £5.28
- Apprentice rate: £4.81 to £5.28
- Standard VAT rate: 20%.
How much does it cost to employ someone in the UK?
The cost of employment varies depending on factors like job role, experience, and location.
Generally, it encompasses the employee’s salary, employer’s National Insurance contributions, pension contributions, holiday pay, and additional benefits.
Based on an average salary of £32,760*, we provide an example of how much it would cost – roughly – to hire someone in the UK:
|Office rent per desk (in London)
|Business energy bill (for five-person office)
|Work social function per head
|Employers’ liability insurance (lowest estimate)
|Total employer cost
*Figures based on hiring a full-time employee at the average total weekly salary in December 2022, as detailed by the Office for National Statistics, and the National Insurance and pension contribution rates for 2023/24.
The United Kingdom has strong labour laws that protect workers in the workplace. Regulations cover aspects such as minimum wages, working hours, non-discrimination, health and safety, and collective bargaining, as follows:
- The National Minimum Wage Act 1998 establishes the minimum hourly pay rate for UK workers, considering factors like age, experience, and job role. Employers are obligated to pay employees at least the national minimum wage, unless they belong to an exempt category or signed valid contractual arrangements stating otherwise.
- The Working Time Regulations 1998 dictates the maximum working hours per week, with a standard full-time week set at 48 hours. Employees have the right to breaks and a minimum of 5.6 weeks of paid holiday leave annually.
- The Equality Act 2010 prohibits employers from discriminating against workers on the grounds of age, gender, disability, race, religion, or sexual orientation.
- The Health and Safety at Work Act 1974 (HASAWA) outlines employers’ responsibilities to ensure an accessible and safe working environment, including providing appropriate equipment, training, and guidance.
- Collective bargaining, typically conducted between trade unions and employers, addresses matters such as wages, working hours, and holidays.
Probation in the UK
This refers to a defined time frame during which their performance and suitability for a job are assessed by the employer and allows both parties to evaluate their working relationship beforehand.
During this time, the employer may set specific goals, targets, or performance expectations. Employees often undergo training, assessments, or receive feedback to gauge their performance and progress.
At the end of the probation period, the employer assesses the employee’s performance and decides whether to extend their employment under a permanent contract or terminate it.
These conditions may involve training, assessments, or specific tasks, and the employer evaluates the employee’s performance during this period to determine if a permanent contract will be offered.
In the UK, there are three types of employment contracts based on the probation period’s length:
- Fixed Term Contracts: These contracts have a defined duration and typically include a probation period at the beginning.
- Casual Contracts: Casual workers do not have a probation period, making it possible for their employment to be terminated at any time.
- Permanent Contracts: These contracts do not include a probation period and provide workers with the same rights, such as wages, holidays, and benefits, as other employees in the company.
During the probation period, both the employee and employer can terminate the employment without notice or compensation, as long as the reasons for termination are not discriminatory or in violation of labour laws. The employee is entitled to the same rights and benefits as others in the same position, including remuneration, working hours, and leave. The probation period must be agreed upon in writing prior to the employee’s start date, and the employer cannot extend it beyond the maximum allowed duration.
Notice Period in the UK
Both employees and employers benefit from notice periods in employment contracts. It gives time for finding suitable replacements and addressing any unforeseen financial or logistical repercussions.
In most cases, notice period lengths are outlined in employment contracts or separate written agreements. If no such agreements exist, relevant legislation determines the length of notice.
In employment contracts, there is no statutory minimum notice period. However, workers who are not classified as employees do have minimum notice periods. The minimum notice periods are as follows:
- Full Time Employees (FTEs): 12 weeks
- Workers: 1 week
- Day workers: 1 day
- Part-time workers: 1 week
- Fixed-term employees: The minimum length of notice is determined by the contract.
These notice periods are not maximums, and employers can extend them based on their specific needs. In order to terminate a contract, both parties must provide “reasonable” notice, so the other party can plan ahead. This may involve finding a new job, making termination payments, or other arrangements.
In cases of termination or redundancy, workers are entitled to payment in lieu of notice. This means that employers must provide the employee with the appropriate notice period and compensate them for the duration they would have worked under that notice.
As a standard practice in the UK, employers may provide their employees with paid leave in lieu of notice, including vacation and sick leave, which they would be reimbursed for – for example, during a 12-week notice period, the employer might choose to give the employee a 6-week leave plus a 6-week period of regular notice.
Paid annual leave, commonly known as holiday leave, is an important benefit provided to employees, allowing them to take time off work without any loss of pay or benefits.
- The UK has a national minimum requirement of 5.6 weeks of paid annual leave per year, as mandated by the Working Time Regulations (WTR).
- This minimum entitlement includes bank or public holidays, which are treated as regular working days in terms of pay and hours.
- Depending on their employment contracts or collective agreements, employees may be entitled to more than the minimum 5.6 weeks of paid leave.
- Employers have the responsibility to ensure that employees receive their full entitlement of paid annual leave and are paid accordingly for each holiday taken.
- Employers should not require employees to take unpaid leave or work during their designated holiday periods.
- Employees are typically required to provide advance notice to their employers before taking their holidays, and employers may request proof of the chosen holiday dates.
Maternity, Paternity & Adoption Leave in the UK
Maternity leave is a special type of paid annual leave available to working female employees who become pregnant and require time off work for the birth and subsequent care of their baby. Maternity leave in the UK is regulated by the Maternity and Parental Leave Regulations (MPLR).
- Minimum entitlement: Under MPLR, pregnant employees are entitled to a minimum of 26 weeks of paid maternity leave.
- Additional unpaid leave: Eligible employees can take up to an additional 26 weeks of unpaid leave.
- Wage continuity: During the first 39 weeks of maternity leave, employers are required to continue paying the employee their normal wages.
- Statutory Maternity Pay (SMP): After the initial 39 weeks, employees may be eligible for SMP, which is paid at a rate set by the government.
- SMP eligibility: To qualify for SMP, employees must meet certain criteria, such as having at least 26 weeks of prior employment.
- Time for adjustment: Maternity leave provides pregnant employees with the necessary time off to adapt to their new family situation.
- Financial security: Employees on maternity leave still receive a portion of their normal wages, ensuring financial stability during this period.
- Bonding and flexibility: Maternity leave allows expecting mothers to bond with their baby and make adjustments to their work schedules as needed.
In April 2019, the UK implemented the Parental Leave and Pay (Paternity Rights) Regulations, granting eligible male employees the right to take two weeks of paternity leave. This benefit allows eligible male employees in the UK to take time off work following the birth or adoption of a child.
- Duration: Eligible male employees are entitled to two weeks of paternity leave.
- Wage coverage: Paternity leave is paid at up to 90% of the employee’s normal wages.
- Bonding time: Paternity leave provides new fathers with the opportunity to spend quality time with their baby and strengthen their parent-child relationship.
- Support for the mother: Fathers can assist and support the mother during the early stages of parenting.
Adoption leave is a policy in the UK that supports employees who are adopting a child, allowing them to take time off work to bond with the child and facilitate their adjustment to the new family situation.
- Duration: Adoptive parents can take up to 36 weeks of adoption leave.
- Wage coverage: Statutory payment support is provided at a rate of 90% of the employee’s salary for the duration of the leave.
- Bonding and adjustment: Adoption leave enables adoptive parents to spend quality time with their newly adopted child, fostering bonding and aiding in their adjustment to the new family dynamic.
- Financial support: Paid adoption leave offers adoptive parents a financial cushion, compensating for potential loss of income during the leave period.
- Inclusivity: Adoption leave is available to both men and women, regardless of marital status, and has been expanded to include couples who have conceived a child naturally.
Shared parental leave
Shared Parental Leave (SPL) is a flexible leave option available to eligible parents in the UK. It allows parents to share the responsibility of caring for their child during the first year after birth or adoption.
- Eligibility: Both parents must be employees and share responsibility for the child’s upbringing.
- Duration: Up to 50 weeks of SPL, minus any weeks of maternity or adoption leave taken by the mother.
- Pay: Shared Parental Pay (ShPP) available for up to 37 weeks, with remaining weeks unpaid or subject to other arrangements.
- Flexibility: Parents can divide their leave and pay, ensuring both can actively participate in their child’s early development.
- Bonding time: Fathers or partners can be significantly involved in childcare, fostering bonding and nurturing relationships.
- Career continuity: Parents can maintain their careers while engaging in their child’s upbringing.
- Inclusivity: Available to parents in all types of relationships, promoting gender equality in parenting roles.
Employers have a legal obligation to provide appropriate facilities for breastfeeding employees, which includes a designated resting area that allows them to lie down.
While there is no specific requirement to conduct a separate risk assessment for employees returning from maternity leave who plan to breastfeed, it is considered good practice for employers to do so and determine if any additional actions need to be taken to support the employee.
Sick Leave in the UK
Employees have the right to take time off work if they are sick or need to care for an ill family member, also known as Sick Leave. The UK government provides statutory sick pay (SSP) to eligible employees who are unable to work due to illness or injury.
- Employees must have worked for the same employer for at least four days.
- SSP is available for a maximum of 28 weeks.
- SSP covers medical expenses related to the employee’s illness.
- It also includes any unpaid leave taken due to illness or injury.
- It does not cover absences related to holidays or maternity leave.
- Additional Support
- Employees may qualify for additional financial support and benefits during their absence, such as through the Fit for Work scheme.
- Payment and Obligations
- SSP is paid out weekly, matching the employee’s normal rate of pay if they were fit to work.
- Employers must pay SSP on the same day and at the same time as the employee’s regular wages.
- Employers cannot deduct wages or dismiss employees for taking Sick Leave.
- Severance Payment
- Instead of deducting wages or dismissing employees, employers may be responsible for offering a Severance Payment if an employee is dismissed or made redundant.
A Severance Payment is a lump sum compensation given to an employee in the UK upon dismissal.
- The severance pay serves as an alternative to regular pay or redundancy benefits and is based on the length of employment, ranging from one to four weeks’ pay.
- Except for voluntary redundancy, employees have the right to negotiate the payment, which can be reduced or waived in cases of gross misconduct, with reasons provided to the employee.
- By law, employers must pay the Severance Payment on the day of dismissal or within 14 days, alongside any accrued statutory minimum.
- Severance Payments are subject to taxation, and employers are responsible for deducting the relevant tax rate, while national insurance contributions are not required.
- Employers should ensure they have the employee’s national insurance number before making the payment.
Recruitment fees in the UK, charged by recruiters to clients seeking new hires, are publicly disclosed and standardized. They are usually a percentage of the successful candidate’s starting salary, ranging from 15% to 25%.
However, fees can vary based on industry demand, complexity, and required qualifications. Additional fees may apply for unsuccessful candidate placement, visa sponsorship, or relocation assistance. Compared to Europe, UK recruitment fees are higher, while in the US, fixed fees are more common and lower. Other countries like India often charge a flat fee per candidate placement.
Payrolling in the UK is a streamlined process that ensures accurate payment of salaries and fees to employees on a monthly basis with the help of an external payroll service. Here’s what you need to know:
- Payroll Service:
- Employers utilize an external payroll service to handle the calculation of wages, taxes, deductions, and other payments to HMRC.
- The payroll service facilitates direct deposit of salaries into employees’ bank accounts.
- Additionally, payroll services offer HR support, including maintaining holiday and sick leave records and setting up pension schemes.
- Outsourcing or In-house Management:
- Employers have the option to outsource their payroll service to a third-party provider or manage it internally with an in-house payroll system.
- Compliance with UK Tax Regulations:
- Payrolling is a legal requirement for all employers in the UK.
- Employers must provide their payroll service with accurate information regarding employee pay, working hours, and other payroll details.
- This ensures the payroll service can accurately calculate taxes, deductions, and salaries in accordance with withholding requirements.
- Any changes or discrepancies in employee information should be promptly communicated to the payroll service.
- Benefits of External Payroll Services:
- Using an external payroll service relieves employers of the burden of staying updated on ever-changing tax regulations.
- Payroll services keep employers informed about any legal changes, ensuring compliance with the law and meeting all obligations.
Recruiting in The UK can present some unique challenges, including:
- Lack of candidates: Due to an ageing population and a diminishing workforce, employers are facing a shortage of candidates with the right qualifications, skills and experience.
- Increased demand: With the growth of global markets and technology, employers are now looking for employees with diverse background and skills.
- Wage pressures: With rising wages across the UK, employers are struggling to offer competitive wages to attract the best talent.
- Political landscape: Recent changes in legislation, including Brexit, have resulted in increased costs and paperwork for employers.
- Competitor poaching: More businesses are using aggressive tactics to recruit experienced professionals from their competitors.
- Lack of diversity: The lack of diversity in the UK labour market can lead to a lack of understanding of diversity issues and may lead to issues of discrimination in recruitment.
- Cultural differences: Managers may not have cultural knowledge or experience in recruiting candidates from outside the UK.
- Language barriers: Language and cultural differences can affect the ability of employers to recruit candidates from other countries.
- Mobility: Candidates may be unwilling to move from their current posting to take up new positions in the UK.
- Economic uncertainty: The current economic uncertainty in the UK can make employers cautious about hiring new employees, fearing they will not be able to offer commensurate salaries and benefits.
An Employer of Record (EOR) is an organisation that acts as an employer for legal and tax purposes. The EOR is legally responsible for paying international employees, as well as handling employee taxes, insurance, and benefits. The business where the employee works retains control over business operations.
A recruitment agency can also provide a number of similar services and is usually responsible for hiring directly for the jobs and employees themselves, as well as managing contracts between employer and employee.
Allen Recruitment can support any type of contract (permanent, temporary or contract). We can offer a number of high touch services that suit employers and employee’s needs. In the UK, we deliver the full service in house with no hand offs to local suppliers. We have local on the ground staff with multiple language support.
Our legal entity in the UK ensures local compliance with registration procedures, employment contracts, payroll, HR regulations and tax law. Our team is equipped to source/headhunt and manage employees across the UK as well as hire and employ pre-identified candidates on your behalf. Our temporary employees are fully insured by us for the work they do for you.
We pay temporary workers on time, irrespective if you have paid us or not. Our billing solution is simple and convenient – we can bill clients in their preferred location and currency. We can provide a full breakdown of fees with no hidden charges and at a lower cost than employer of record services.
Our onboarding team smooths the local onboarding process and can help with additional services around relocation and governmental documentation. Temporary workers can use our offices if they need somewhere to work. We have local technical support to deliver the tech kit they need to get started.
We are experienced in sourcing and employing temporary staff for some of the biggest multinational companies in the world. We pride ourselves in proving the best experience for our client’s and temps, check out our reviews on Glassdoor to see for yourself!
We think differently about recruitment and possess technological advantages that enable our recruiters to find better candidates faster. How? Our technology-led solution is built on leading machine learning search and automated communication/scheduling software.
Our solution is described as the future of recruitment and allows us to find and engage with the potential candidates that are currently considering changing positions.
Not only do we target local talent but also suitable candidates across many countries that may be interested in your role, company, and location – our candidate reach is truly global.
Our software also allows us to follow up with extensive pools of passive candidates who may be interested in your role or company but are currently sitting on the fence.
Trusted by many of the leading technology and finance companies across the globe since 1998, supporting their recruitment programs across multiple countries from our offices in Ireland, the UK, the Netherlands, Poland, Spain, France, Sweden and Belgium.
Sourcing in permanent, temporary and contract jobs with multinationals, early stage and local indigenous companies, providing an unrivalled and established recruitment service for our candidates and clients alike.
We specialise in a variety of areas, with experienced insights into areas such as Desktop/Network Admin, Software Development, Sales/Marketing, Business Support, Finance, Customer Service and HR/Recruiter roles and much more.
Are you interested in learning more about employing fantastic talent in the UK, but you’re not sure where to start? Or perhaps you simply need a little help to get on your way? Then please don’t hesitate to reach out to us at [email protected].
The data below is based on the role of Data Analyst with medium level experience (between 3 to 8 years). Employment cost calculation does not include potential costs, which might occur during and after termination of the employment such as: sick leave, severance pay, or similar.
The employment cost comparison is subject to change.
|Gross Annual Salary (local currency)
|Gross Annual Salary in EUR
|Total Cost in EUR*
* Total Cost in EUR = total employment cost for Employer (including taxes)
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Posted in: Allen Agency / Allen Consulting / Allen Senior Appointments / Blog / UK