2021 – How to Prepare HR for the Year Ahead

21st January 2021

“Human Resource isn’t a thing we do, it’s the thing that runs our business.” – Steve Wynne


2020 is finally over. It was a year that was challenging and testing for so many businesses. There was furlough, redundancies and many sectors experienced (and are still experiencing) months of temporary closures.

2021 won’t be without its challenges. To a certain extent though, we are now far more aware of what we are dealing with. With preparation, your business will be in the pest possible position to survive AND thrive. Below are six ways in which you can prepare HR within your business ready for the year ahead.

  1. Brexit Brings a New Immigration System

As if Covid-19 wasn’t enough for the HR world to get their head around, this year we are having to navigate the changes resulting from Brexit.

As of 1st January 2021, there is a points-based immigration system in place. EEA nationals that arrive back after this date will have to stick to the same visa requirements. These are the same as other non-UK nationals.

We would recommend looking into how the new system will affect your recruitment. For example, you may need to apply for a sponsor licence. You should also look into the rules on right to work checks for the coming six months.

Do you already have existing EEA employees in your business? If so, they will need to apply for settled, or pre-settled status. If they haven’t done so already, then there is time to do this up until 30th June 2021 under the settlement scheme.

  1. Covid-19 and the CJRS

The CJRS (Coronavirus Job Retention Scheme) continues and has been extended until 31st March 2021. Even if you haven’t made use of this scheme yet, you can still furlough employees. As it stands, the scheme will cover 80% of furloughed wages. This still has a cap of £2,500 per month.

We are now in a third national lockdown and many businesses have had to shut down yet again. So, we expect there to be further announcements. We would recommend you keep an eye out on official government pages, as well as Purple HR’s social channels to keep up to date.

Going forwards, we can expect Coronavirus to raise further challenges. For example, working from home, home schooling, redundancies or health and safety challenges. It is worth exploring what has worked in your business prior to now and which areas need improvement. By planning ahead you can ensure a productive response to each new change for the coming year.  

  1. IR35 Contracts

On the 6th April 2021, reforms to the IR35 on off-payroll working in the private sector will occur. These new rules target tax avoidance. The government are aiming for reduction in contracts employed by personal service companies.

We would recommend reviewing your contracts and ensuring compliance procedures are in place. The new rules ensure organisations that engage directly with the contractor handles their employment status. This also means deciding whether IR35 applies. If you believe it does and you are paying the fees to the individual, then you are also deemed to be their employer for tax and NI purposes.

  1. Review of the National Minimum Wage

The new national minimum wage rates will apply from April 2021. Further information can be found here. However, we are predicting that due to the ongoing financial implications from the pandemic, that the increase will be significantly less than previous years.

Another change that may come into place at the same time, is the increase of the national living wage by 2.2% to £8.91. This will be applicable to those 23 years old and above rather than 25 years old and above as at present. However, due to the ongoing Covid-19 financial implications, this may change. We would advise you to keep an eye out on the announcements in the coming months.

  1. Pregnant employees and new parents

Redundancy protection for pregnant employees and new parents should be strengthened to prohibit redundancy during pregnancy and maternity leave and for six months after the end of the pregnancy or leave (except in specified circumstances; and for connected purposes). The Pregnancy and Maternity (Redundancy Protection) Bill 2019-21 is current awaiting its second reading in the house of commons. However, no date has been set for this yet. This applies to those taking adoption leave and shared parental leave.

  1. Modern slavery statements

The government aims to make changes to the rules on publishing modern slavery and human trafficking statements. Reports must be published on a government-run reporting service and by a certain deadline. The date of enforcement is yet to be set. It will soon be required for all organisations to report on certain areas when publishing their statement.

There is also a duty to publish a statement that has been expanded to public-sector bodies that have budget of £36m or more. Guidance, including best practice approaches, on this may have been postponed due to the pandemic. However, they are expected soon.

Looking to the year ahead…

There will inevitably be more changes in the coming weeks and months in the HR world. Of course, the pandemic will also inevitably throw new challenges our way too. Do you want to keep on top of the ongoing changes and how they affect your business?

To ensure your business is compliant, get in touch with Purple HR today to see how we can assist you.

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