The Institute of Directors (IoD) has refuted yesterday’s claims by the Chartered Institute of Personnel and Development (CIPD) that business overstates the impact of employment regulation, and has suggested that HR is the “biggest vested interest of all”.
The row follows the CIPD’s publication yesterday of a report that claimed that business lobbying against red tape used statistics selectively and that there is “little convincing evidence” that the productivity gap between the UK and competitor economies is due to employment regulation.
The report pointed out that the UK is the third-least-regulated labour market in the world and CIPD chief economic adviser Dr John Philpott said that it was time that businesses stopped “seeing red” over employment regulation and adopted a more unbiased, evidence-based perspective.
However, the IoD responded today by saying that people should take the CIPD’s claims “with a big pinch of salt” due to HR’s role in relation to employment law.
Miles Templeman, IoD director-general, said: “The HR lobby is the biggest vested interest of all when it comes to the subject of employment law. When governments create complex regulation, employers are forced to increase their HR budgets to ensure compliance. The fact that excessive employment regulation imposes large costs on employers and inhibits their ability to grow seems to be a matter of indifference to the HR lobby.”
Templeman added: “Excessive employment regulation is one of the most damaging features of the current UK business environment and the coalition is right to look at how we can deregulate. SMEs, many of which can’t afford to employ HR staff, particularly struggle with employment law. The Government needs to make it easier for businesses to employ and manage staff so that we can improve our competitiveness internationally and boost private sector growth. There is clear scope for making some big improvements to regulations without disadvantaging workers.”