Why good body language is important in an interview

The whole idea during an interview is to put your best self forward so the person sitting opposite you, can’t wait to employ you and your body language plays a significant role in the way you are perceived. Poor body language can derail an interview regardless of how confident and well-spoken you are, body language is as much a part of your communication style as what you say.

Impressions are made within seconds of reviewing body language.

Don’t worry though we have put together a list of do’s and don’ts when it comes to how you use your body language to make that great first impression!

  1. Shake Hands – Shaking hands at the beginning of the interview breaks down boundaries, shows confidence and implies that you are open.
  2. Good Eye Contact – This is the best way to show you are paying attention and engaging with the situation, don’t stare at them like it’s a contest as this can be intimidating, but do meet eyes with the person you are conversing with.
  3. Don’t Slouch – Sitting hunched forward or lounging has the effect of looking a little too relaxed.  You want to show that you are taking the interview seriously, looking confident and professional rather than you were wishing you were somewhere else (even though you probably may be!).
  4. Lean towards the interviewer – This implies that you are taking an interest in the conversation and that you are engaged by what they are saying.body language - outsourced hr - hr revolution
  5. Mirror your interviewer – You can quickly get on good terms with your interviewer by matching their positive body language.  If you are unsure on how you should sit or act, watching how your interviewer does can give you a good indication of how they think it is appropriate to act.
  6. SMILE – If all else fails and you completely forget to remember where you should have your hands or where you should look, just smile. A genuine smile creates a favourable image and shows you have personality and you are paying attention to what is being said and will ensure your interviewer remembers you in a positive light.

Lastly it goes without saying you should always listen attentively and try not to interrupt, focus on keeping your tone of voice even and polite, too soft and you’ll seem timid, too loud you’ll seem domineering.

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If you need any help or guidance about creating a good first impression, give HR Revolution a call: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

Why small businesses need HR

Interestingly small businesses make up more than 99% of private sector business and account for 60% of private sector employment: there are a lot of small businesses out there! Unfortunately another statistic is that the basic lack of correct management skills is responsible for the failure of over half of them.

Budgets are tight when small businesses start out, therefore a lot of managers are expected to multitask which means dealing with employee issues as well as growing the business. With focus on rapid growth, this results in the need for investment in an HR function being overlooked, which can actually have the opposite effect and halt growth in its tracks. Without the training required or the skills that HR brings, decision makers are not often able to identify and use the talent within their business to be able to push it forward in the right way.

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In most cases, and we see this a lot, small businesses only approach us once the problems have already started or when a major change happens in employment legislation. It seems that the mindset of small businesses is that the HR function is a reactive one, when in reality it should be part of the strategic planning they need from the outset.

Our Managing Director, Wendy Read comments:  “People are the key to a successful business, without them the wheels just do not turn. The problem is that most businesses don’t focus on their people and only concentrate on the bottom line. Our philosophy is simple; focus on your people, hire, on-board, train, manage and develop them and the bottom line will look after itself”.

If you would like to see how an outsourced HR consultancy can help why not give HR Revolution a call: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

 

 

5 steps to help manage difficult employees

A difficult employee in any business will reduce productivity, have a negative impact  and potentially upset other colleagues too. So the quicker you can resolve the problem, the better your business will do.

If you let things slide for too long and just don’t act, you will miss important opportunities, waste time and probably money, that you simply can’t regain.

Also remember employees will be looking to you, to see how you manage the situation. Action’s speak louder than words and your action’s send a message to every employee, however any lack of any action sends an even more powerful one.

Perhaps what seemed to be an impressive characteristic during the interview stage has proved to be negative as the months have gone by?  or maybe an experience in your employee’s personal life has changed their behaviour at work?

On the other hand, could a series of small difficulties be starting to mount and cause concern.

Below we have listed 5 tips to help when you’re managing difficult employees in the workplace.

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1. Clear communication

Always give your employee the benefit of the doubt. They may not realise that they’re causing difficulties.

It’s also possible that they know things aren’t going well, but they’re struggling to improve the situation.

Be prepared to listen to their viewpoint. Take time to ask how they’re feeling and to find out what’s going on in their lives. Are they having trouble with their workload? Are there frictions between multiple employees? Is something outside the workplace having an impact on performance or behaviour?

Share the experience from your side, without being overly critical or apportioning blame on your employee. It’s important that they know what difficulties you’re facing as their manager, but accusations will not go down well.

When communicating, it’s important that you’re clear about exactly where the problem lies. Is their performance below the required standard, or is there a specific behaviour that’s becoming a concern? Work with your employee to find ways to improve the situation.

When you listen to a difficult employee, you can often turn things around. Equally as important, you might discover legitimate complaints that you can act on for the good of your business.

2. Always keep a written record

Written records benefit everyone.

If you need to take disciplinary action, it’s essential that you’ve got examples to back up your decision.

Write down any instances of difficult behaviour. Who was involved? What happened? What effect did it have?

You can use your records if you need to take formal steps, but should also be able to refer to them when speaking with the employee in question.

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3. Always refer to your handbooks and HR policies

Every workplace should have handbooks and policies that detail what’s expected of an employee, and it’s essential that everyone has access to these at all times. Storing them within your online HR software is the most effective way to reach every person in the workplace, and to keep everything up to date.

4. Know when to seek advice

Managing a difficult employee is a challenge. Their behaviour will almost certainly be having an impact on their colleagues, and the business as a whole.

Unless you’ve been through it before, it’s like that you will not know how to deal with a difficult worker. What are you allowed to do, and what might cause more trouble?  Even if you’ve been managing difficult employees in the workplace before, these specific concerns might be different.

Don’t be afraid to seek help and advice, whether that’s from another member of the management team or an external HR consultant.

5. Keep going

It’s all too easy to speak to a an employee, tell them that their behaviour isn’t acceptable and then forget to follow things up. Much like being a parent, threatening “I’m going to count to 10…” and having no plan for what happens afterwards.  After you’ve counted to 10, it’s vital that you make another move.

If you provide a warning and the behaviour continues and you don’t take further action, your initial conversation is wasted. You’ll probably need to start again further down the line or even worse, you send a message that you are inconsistent and that your threats are meaningless.

If you need help give HR Revolution a call: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

 

 

 

 

Ideas to help with your HR costs..

In any business there always has to be conversations about where you can cut down on spending and get a better handle on your finances. I think most business owners often recognise that whilst their people are their greatest asset, changes must sometimes be made to make sure that the company can weather any storms that might be coming its way.

However, HR is not just important within a business, it’s vital. Cutting corners, or cutting spending without thinking about the bigger picture, could leave you facing problems that will have a tangible and long-lasting impact on your business.

Sometimes it’s essential to be realistic, if you need to make savings to keep your operations afloat, you may need to examine where you’re perhaps spending money unnecessarily, or make choices that don’t result in the best possible return on investment.

If you are thinking about reigning in your HR budget and want to do it the right way, then you’ve come to the best place. Here, we are going to talk you through some key considerations to help you to understand where you can make those necessary cost savings.

Harness the power of technology

How much time are you currently spending on HR activities? From making sure that everyone gets paid on time, through to creating and filing end-of-year review documentation, seemingly small tasks can eat up a huge chunk of your day.

If you think that you could better use this time for more strategic activities, then the answer could be technology. There are plenty of options when it comes to affordable software solutions that improve your levels of compliance and ensure that you always know what needs to be done, and when.  HR Revolution offer a great HR admin solution designed to do this to find out more details breatheHR.

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Get creative with reward

You need to be offering employees a competitive benefits package if you want them to stick around – and we are sure you are fully aware of the implications that can arise if your best people start to look elsewhere because they don’t feel valued within your business.

The answer isn’t always about pay though. It comes down to getting to grips with what really makes your workforce tick – and often, it’s not what you think. How can you offer more flexibility? How can you empower your employers to lead fulfilled lives outside of the office? How can you create a better sense of community and joint purpose? Remember just throwing money at a problem rarely creates any kind of meaningful change.

Take communication online

How do your employees access important policy documents, employee handbooks? If you are providing hard copies, then make a change and get everything up on your internal intranet system. The cost savings may be very small, but this is about creating more productive ways to operate for the future.

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How HR Revolution can help

Ok you may feel that hiring a HR professional is going to involve a massive spend? Well, not necessarily. It’s wise to think about the bigger picture here. Do you have issues within your workforce that are bubbling away under the surface? well ignoring them won’t help and could prove to be hugely expensive in the longer term.

Think of it like this. A modest investment right now could pay dividends in terms of the hassle and fuss that you could avoid in the future. Can you really afford to find yourself facing an employment tribunal, and the consequences that this could have on your reputation as an employer? This might sound extreme, but it’s a very real possibility if you’re just hoping for the best when it comes to complying with relevant legislation.

This isn’t about making cuts for the sake of it. It’s about establishing what’s really adding value and what isn’t, and then implementing changes accordingly.

If you would like to find out how we can help, give HR Revolution a call: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

6 reasons why employees quit their jobs

When you think about why employees leave jobs, you may be quick to assume that it is money that is the main driver, but in reality money is much less of an issue than personal factors and as an employer surely the number one priority for the continued success of your business is finding out why your employees are leaving.

When one of your employees hands in their notice, finding out why could be the key to discovering whether something is remiss within your business, i.e. a manager that people aren’t happy with, or heavy and demanding workloads.

On the other hand, they could be leaving for a job at a different company. Why is that? You need to ask yourself, what are they doing better? and why is working for them more appealing than working for you?

If you know why an employee is leaving you can then start to gather valuable information that could boost your recruitment and retention practices.

Below we list 6 reasons why employees quit their jobs:

1. Feeling undervalued

All employees want to feel that they are making a positive contribution in the job they do and more importantly that they are appreciated.

It might be interesting to know that this doesn’t necessarily mean giving rewards or salary raises, although I’m sure nobody would complain!! Often, a simple ‘thank you’ is a powerful way of changing someone’s perspective.

2. Insufficient management

If employees don’t feel that they’re being managed effectively, they may look for jobs elsewhere. People won’t always get along, but if an employee is struggling to connect with their manager then there will be difficulties in the workplace.

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However, if many people are finding one manager particularly difficult to work with, then this could indicate a rather bigger issue.  Sometimes, the opposite is true, a manager could be a good friend to everyone on their team, but might struggle with delegating, communicating and keeping projects on track.

3. No progression prospects

Most employees will want to feel that they can progress in their role, inspiring them to work hard so they can be rewarded with promotions and pay rises.

New challenges are valued. It can be demotivating for workers to feel that they’re trapped at their current level, with no room to grow and improve. They might be tempted to leave if they feel they aren’t progressing, especially if they have opportunities being offered to them from another business who offer great career development.

Be aware though that some employees will be happy in their current positions and not want to be continually pushed to progress.  For them, promising promotion opportunities could be just as likely to make them feel pressured and inclined to leave. Your main aim is to know what each employee wants, so it is a good idea to make sure you discuss these in performance reviews.

Always bear in mind that a lack of progression ambition does not indicate a lazy or unmotivated employee, some people are simply happy with their current level of responsibility.

4. No work/life balance

A good work/life balance is now more important than ever, especially as we are connected to our smartphones and laptops 24/7, sometimes, no amount of money is worth certain sacrifices, early mornings, long days at work, hours travelling to and from work, people need and value their free time.

Many employers are finding solutions that benefit everyone, such as offering on-site facilities: gyms, coffee shops, childcare facilities and customised office spaces, to help bring the work/life balance into the workplace.

5. Colleague clashes

Being in an workplace environment where employees feel they are among friends can make all the difference to job satisfaction.

If an employee spends every day clashing with a colleague, either because they don’t get on, feel they are not pulling their weight or have very different opinions about how the work should be done, then there’s a disaster waiting to happen.

You might want to step in and mediate. If you can’t identify the problem and help resolve it, then there’s a good chance that someone will be leaving.

6. Lack of work enjoyment

Of course personal tastes and preferences change, at every stage of life, what you may have aspired too at 23 maybe very different at 40.

Some people decide after years in the workplace that they are ready for something new, while others spend a couple of months in a role and realise that they’ve made a mistake.

There are very few things that you can do to retain an employee with a different path in mind, but it might be worth seeing what alternative jobs you can offer if you would really like to keep them within your business.

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At HR Revolution we understand what it takes to create a great team, and as experts in HR we are well placed to support you with the first steps towards achieving a competitive business through your people.

So if you are looking for recruitment solutions that go beyond simply hiring your newest team member get please get in touch +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

Tips for less workplace stress

Following on our theme of Stress Awareness Month, it probably comes as no surprise that research often finds that work is the most stressful factor in peoples lives and this can be caused by a number of things, such as poor management, an excessive workload or being set unrealistic targets.

Stress-related absences are one of the biggest costs to businesses every year, so most could really benefit from taking a closer look at the way they manage their people, especially how they cope in stressful situations.

Below we have put together a few tips that business owners/managers can do to improve the way they manage their employees ensuring they are not the cause of any unnecessary stress and frustration.

Listen

Taking time to listen to your employees is imperative as it not only makes them feel valued, it can have a massive impact on their performance and productivity. An employee might be trying to tell you how a different approach to a task could be more efficient or cost effective or they may have a creative idea that could help you solve a long-standing problem. It can also alert you to an employee who may be struggling with a personal issue or heavy workload and who needs more support.  Taking the time to listen is invaluable and ensures you really take in what your employees may (or may not!) be telling you.

Young business team during a brainstorming

Be available

As as a business owner/manager, supporting your employees is part of the day job – and this can only be done effectively if you are available and approachable. Make sure your employees know it’s alright for them to ask questions or seek advice if they’re unsure about something. Also if you are often out or in meetings, let them know your movements so they can plan the best time to catch you. A couple of minutes spent answering a quick question not only gives them reassurance that they are doing the right thing, but will save trouble further down the line if they were headed in the wrong direction.

Be trustworthy

Make sure that your team knows they can trust you and have your support even if things don’t go to plan. If people are afraid they will be unfairly blamed for anything that goes wrong, they will be constantly operating in a state of anxiety and won’t do a good job. Equally, make sure credit is given where it’s due and that you acknowledge the work of your team when things go right. Don’t make promises to people if you’re not sure you will be able to deliver, if you operate with honesty and integrity your employees will do the same.

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Be open and direct

Uncertainty is the cause of much of the stress and anxiety in many businesses and if you don’t let your employees know what is happening they will speculate, gossip and often wind themselves up into a frenzy over a rumour which is completely unfounded.  If there are changes on the horizon, tell employees what you know – or if you don’t know, let them know when you expect to know more. Open and honest feedback on performance is also vital, employees will want to know how they are doing and if they need to be doing anything differently. Don’t just wait for the performance review to come around, if you give people feedback on an ongoing basis they will be clear about what their priorities are, secure in the knowledge they are approaching tasks in the right way and that you will support them in any areas where they may need further development.

Show empathy

Even though you are in charge of a team and you need to make sure they get the right results that doesn’t mean you can’t show kindness and sympathy where appropriate – show your human side! Many business owners/managers are uncomfortable displaying any kind of ‘emotion’ in the workplace and shy away from difficult or personal conversations with employees. However, stepping outside of your professional role and communicating with people on a personal level will help you build a much more motivated and engaged team. Remember be as flexible as possible when people are dealing with difficult personal issues – and if someone’s performance is not up to scratch, make sure you look a bit more deeply into what may be behind the issue.

If you need any further help or guidance about how to deal with stress in the workplace, give HR Revolution a call: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

 

 

Tips for creating a positive workplace

We all know that the environment you work in has a big impact on how you feel, so it’s probably no surprise that as adults we spend over two thirds of our life at work!! a very sobering thought indeed…

So it is really important for employers to create a positive, healthy workplace, where employees have mutual respect, feel valued and appreciated as these things all strongly contribute to creating happy employees.

Listed below are ways to help achieve this:

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Acknowledge accomplishments

It is a proven fact that employees respond to praise and appreciation expressed through recognition of their good work, because it reinforces their work is valued.  When employees feel like this, their satisfaction and productivity rises and they are motivated to keep up or improve their good work.  Doesn’t everyone appreciate a ‘pat on the back’ to make them feel good, I know I definitely do!

Positive Communication

Make sure you communicate, as we know feedback whether good or bad is fundamental in the workplace.  You need to discuss regularly with employees what they have accomplished and what is going well in their job, helping them to feel connected and part of a team. Delivering feedback ensures your team strengths are being highlighted and made good use of, and of course gives employees direction on what they can improve on.

Celebrate employees

Look for ways to celebrate with your team whether it’s an employee birthday or recognising a milestone or achieving a goal. Honoring wins and milestones improves morale by encouraging the person recognised and showing team members that important events are noticed and praised.

Happy Successful Business People Celebrating and Jumping in New

Reward good work

As an employer you may not always be able to reward by means of a pay-rise, but there are alternative ways to reward your employees, implementing exciting incentives that give the employee something tangible to work towards, such as a competition to win a gift card – which are low cost and give the employee the choice of what they want.

If you need any help or guidance about creating a positive workplace, give HR Revolution a call: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

 

 

5 challenges of managing remote teams

Remote working or ‘working from home’ has become increasingly popular over recent years and with good reason. Businesses are changing and, in turn, so is the requirement for us all to be herded like sheep into grey office spaces miles from our homes. Business owners are starting to realise that certain employees can actually increase their quality of work and levels of productivity by being allowed the flexibility of remote working.

However, with an ever expanding global workforce, it’s becoming more and more important to be aware of the issues that arise in regards to effectively managing productivity within more productive remote teams, once you know what these are you can then decide whether or not it is a astute move for your business.

Below we list the 5 biggest challenges:

1. Accountability and visibility

Building trust between a manager and employee; if they aren’t sitting at their desk where you can see them, then how do you know they are working? If this isn’t addressed early on and you don’t have management information to see how and what they are delivering it will be an issue and one that could spiral out of control.

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2. Isolation and communication difficulties

If you have employees working remotely within different time zones, this may lead to a feeling of isolation for team members. If your employees also speak different languages there’s an added level of communication to factor in in order to make the team and business work.

3. Culture

A business that has their whole team or the majority of it’s employees working remotely will likely have to work harder than most to ensure it’s company culture is established and that individuals well-being is looked after. Remote working can cause a lack of team communication and therefore a poor company culture and team community – leading to employees feeling disconnected from the overall company mission and goals. A clear company culture and a feeling of purpose are essential for creating a motivated team, without these the team can begin to feel isolated and employees may become dissatisfied with their roles.

4. Security – both physical and digital

Policies and processes for office and online security are fairly straight forward to manage, but when you have remote workers the needs of those individuals may change because their working set-up is different. If appropriate security procedures aren’t dealt with as part of the remote working setupit could cause major issues and potential danger to business functionality. If remote workers feel unsupported or at risk this can quickly lead to disengagement and a loss of productivity.

5. Trouble separating work/home balance

The inability to ‘turn off’, is an ongoing issue for all workers, but these issues seem to increase with remote workers.  Working from home can lead to longer working hours and no real definition between work and home environments, this can result in longer or unpredictable hours worked, increased stress, a strain on personal and professional relationships and the threat of one or both sides taking advantage.

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Having a balance between work and life is a very important and even more so now companies are offering new and improved perks to help support workers. Having a balance between work and life is very important and even more so now companies are offering new and improved perks to help support workers. Remote working can be a great incentive for employees – encouraging trust and reducing travelling time and costs. But on the flip side it can become a negative issue that results in low engagement, lack of productivity, burn out and even resignations. It’s worth remember that working remotely can be difficult and isn’t for everyone, especially if you are unable to define the difference between remote working and under-working!

Please be aware that a failure to address these challenges can cause decreased productivity and employee engagement, an impact on overall team morale, increased employee turnover and a negative impact on business outcomes.

If you need any help or guidance with managing remote teams do get in touch, HR Revolution are here to help: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

 

 

A guide to good office etiquette

Whether you’re straight out of school, University, moved to the UK from abroad or simply not sure about what to do or say in an office environment, we have compiled a little guide of office do’s and don’ts. Hopefully these tips will help you make a good impression:

Do always assume people are listening

Even if you are talking to someone that you feel very comfortable with, can you be sure that nobody else is listening in? You may accidentally offend someone or say something that gets repeated to the wrong person and the same applies to online activity – don’t ever talk negatively about colleagues or your employer on social media or your blog. Remember, whatever you post can and probably will come back to haunt you.

Discuss your salary

In the workplace it all begins and ends with money and there’s a distinct possibility that you won’t be earning the same salary as someone else.

NEVER discuss how much you’re paid.  It’s not respectful to discuss how much you’re earning and you don’t want to offend anyone that’s being paid less than you.

Be careful who you address your emails too

Ok we’ve probably all done it, written a text/email about someone, then accidentally sent it straight to them instead of the intended recipient? The same applies in the office, be careful who you address your emails too, also when replying to all ask yourself if everyone on the list needs to receive the email and always check before you press send!

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Offer to make drinks for everyone

It’s polite to ask everyone if they’d like a drink, however, this can lead to a long list of beverages that you’ll need to make. You’ll have to remember who likes milk, who wants sugar who drinks tea and who has coffee – have a notepad handy!

A good idea is to suggest that everyone write their preferred beverage on a notice board by the kettle, so that you only need to remember who’s ready for their next hot drink. And if you decide not to make drinks for everyone, make sure that you never accept the offer when it’s someone else’s turn!

No smoking

Smoking indoors has been illegal since 2007, but using e-cigarettes, or ‘vaping’, is allowed in public places. Most workplaces will have their own rules about electronic cigarettes, but even if yours doesn’t mention them specifically, it’s wise to go outside for your vaping. Many people simply aren’t comfortable with having e-cigarettes used in their presence and the verdict is still out on any potential health risks too.

Don’t change the temperature without asking

In reality it is likely you’ll be sharing an office with a few other people, some of whom will wish they worked in the Sahara or the Arctic!  Don’t upset anyone by opening a window without asking, or making unscheduled changes to the air conditioning settings.

Turn up to work with layers of clothing to cover every eventuality, just in case someone else makes a change that you don’t want to openly complain about.

Do mind your language

Swearing in the office is simply unacceptable, remember using bad language could lead to warnings and/or disciplinary action.

What not to eat at your desk

Fish products are a no-no in the office environment, along with eggs, fast food and stinky cheese… you get the picture… Remember you don’t want to risk your business relationship with someone over bad food choices, if in doubt about a specific food, leave it at home and opt for something you are sure won’t offend others.

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Don’t take an extended lunch break

Most offices are strict on time-keeping, which means they’ll notice if you turn up a bit late, leave a bit early or take a few extra minutes on your lunch break. Your manager might also be adding up the minutes, with a very clear picture of how many hours you miss each year.

In the end it all comes down to common sense, remember being comfortable at work is great, but you should still think carefully about everything you say and do.

If you need help or guidance with office etiquette please do get in touch, HR Revolution are here to help: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

HR Blogger

What is PILON? and what you need to know from April 2018

PILON (payment in lieu of notice) is a payment made to an employee when their employment has been terminated immediately without notice.

How should an employer deal with it?

PILON only arises when you want an employee to leave straight away therefore ending employment immediately and is a payment to compensate the employee for money they would have earned during their notice period if they had worked it. It is different from ‘gardening leave’, in which the employee is still in employment during the notice period and is paid, even though he or she is not present at work.

PILON will usually depend on what provision has been made for it in the contract of employment. In some instances, a contract may specify that termination can be made immediately by making a payment in lieu of basic salary for the notice period. Benefits and other extra costs that would have accrued during the notice period may not need to be paid. Employers are generally required to pay benefits and any extras when the contractual provision for PILON doesn’t specify what the pay should be, or if there is no contractual clause for PILON.

Employers need to know that without contractual provision, a termination of employment with PILON is likely to be a breach of contract. Usually the employer would compensate for this by including all the remuneration and benefits the employee would have been entitled to during the notice period. To avoid any later disagreement, employers could include a payment for any holiday that may have accrued during the period, even though they may not technically be required to.

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Sometimes there can be confusion about when the termination date falls in a PILON situation. To make sure there are no disputes, it is always advisable to make this clear in the contract, whether it’s the date notice of termination is given, or the date the PILON is made or in the end of what would have been the notice period. Some employers prefer to give notice of termination and make the PILON at the same time so that there are no misunderstandings.

Usually in the event of a dismissal for gross misconduct, PILON is not normally paid.

Currently an employer may pay up to £30,000 free of tax and National Insurance but as of 6th April this is set to change in an attempt to make termination payments ‘fair’ and provide more clarity on the rules behind the payments.  From this date all employees will pay tax and Class 1 NICs on the amount of basic pay that they would have received if they had worked their notice, even if they are not paid a contractual PILON.  This means the tax and NICs consequences are the same for everyone and it is no longer dependent on how the employment contract is drafted or whether payments are structured in some other form, such as damages.

Here is a quick overview of the changes:

1. PILON will be subject to deductions for income tax and National Insurance contributions.  This is irrespective of whether there is a PILON clause in the contract of employment;

2. Employers National Insurance contributions (but not employee NI) will be payable on any part of a compensation payment that is taxable; and

3. Foreign Service relief will be abolished.

The good news:

1. The £30,000 tax exemption will stay in place.

2. The tax treatment of legal fees paid under a settlement agreement will remain as it is now.

3. Statutory redundancy payments remain exempt from income tax and NICS.

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If you need help or guidance regarding PILON please do get in touch, HR Revolution are here to help: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

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