Significant disparities exist between small businesses in their confidence and awareness of managing employment law, according to new research published today by the Department for Business, Innovation and Skills (BIS).

The study, based on responses from over 300 small business owners, shows that:

• Almost a third (32 per cent) of the total sample, report feeling confident in their understanding of employment law and their role as an employer; however
• More than a third (34 per cent) of respondents, feel that employment law obligations are ‘not relevant’ to their business; and
• A further 20 per cent report that they understand their obligations, but worry that they get it right.

Employment Relations Minister Lord Young said, “We know that running a small business is both challenging and rewarding – and that this combination often fuels a successful enterprise. The essential job of managing employment law need not be one of these challenges.

“This study helps us identify the knowledge gap, and the reasons behind this, to enable us to continue to improve the advice and support we offer. I expect all small businesses to access this help for free on the Business Link website to make sure they know their responsibilities.”

Commenting on the research findings, Petra Wilton, Director of Policy and Research at the Chartered Management Institute said, “These findings show that small business bosses take very different approaches to the ways in which they manage their obligations, what really matters is for business leaders to realise that managing employment law is a key responsibility of theirs. No one is asking them to be an expert, but it is essential that they seek out and use appropriate information so that informed decisions can be reached”.

The study also includes an in-depth analysis of male and female variations. Women place a greater emphasis on keeping up to date with employment law compared to their male counterparts, but worry more that they will get it wrong. Over half (54 per cent) of women report that they feel it is important to keep informed of changes, compared to 38 per cent of males.

Over a quarter of male small business owners (26 per cent) admit that they don’t keep up to date with employment legislation, compared to a fifth of women (21 per cent). Despite this, over a quarter (26 per cent) of women worry that they will manage it incorrectly compared to 17 per cent of men.

Almost half (42 per cent) of the sample consider it ‘important’ to stay up to date. However, a quarter (25 per cent) admit that they do not keep up to speed with legislation changes.

A further 28 per cent report that they are ‘vaguely aware’ of their legal obligations. This group of employers feel that they are unable to find the time to keep abreast of their legal requirements.