WHY DO MY STAFF KEEP LEAVING?
R M writes: I run a small firm and keep having to recruit new staff to
replace those who leave. This is becoming costly and time-consuming, so how
can I stop them wanting to quit?
Advertising, recruiting, training, replacing and training again is a costly
circle, writes Peter Done, managing director of Peninsula. You
should spend a few minutes with leavers to ask why they are going, what
lessons can be learnt for the future and what can be done to induce them to
stay.
There are many reasons why staff leave; you need to find out the truth because
acting on misinformation is unlikely to be successful. Look at your records
to see if the problem extends across the organisation as a whole or is
limited to a few departments.
Whoever does the exit interviewing must explain that the purpose of the
interview is to improve the firm’s performance, and anything said during it
will be kept confidential. Find out whether the ad accurately reflected the
job duties and attracted the right candidate; whether information in the
application form or CV indicated the candidate was unsuitable; whether there
was something wrong with the induction or training that resulted in this
worker leaving or whether there is a problem with the job – maybe the
management or the pay – that is driving people away.
Records of all leavers’ comments should be made and analysed to identify
possible areas for action. Accurate costing of recruitment and training is
vital, and you should consider whether that money could be used to improve
wages or benefits such as holidays.
As part of the exit procedure, ensure that correct notice has been given,
outstanding loans and company property are recovered; final payments
relating to holiday pay, commission and so on are calculated and a P45 is
produced.
Exit interviewing is not just a chore – done properly it can provide valuable
information that you can use for planning and to help you cut costs.
TAXMAN LOGS ON TO HOME COMPUTERS
A S writes: I provide my staff with computers so they can work at home. I
have never declared this as there was a tax exemption for employer-provided
computers, but I am told that from the 2006-7 tax year this exemption has
been withdrawn. Do I now need to report these computers on P11Ds? Can I
avoid the tax charge for employees?
Until 2005-6 there was an exemption for computer equipment provided to staff,
up to a limit of £2,500, writes Tim Stovold, partner at Kingston
Smith LLP. There was no restriction on how it was used, so no taxable
benefit arose even if a computer was used only by workers’ children for
their homework.
From April 6 last year this exemption was removed. So, for an
employer-provided computer used mainly by the children for their homework, a
benefit would need to be entered on the form P11D equal to 20% of the market
value of the equipment when it was first made available. For equipment worth
£2,000, the benefit would be £400 and the tax due from the employee would be
£88 a year for basic-rate taxpayers and £160 for higher-rate taxpayers.
There would also be Class 1A National Insurance due from the employer of
£51. The extra administration of keeping track of the benefit charge is also
a factor to consider, in addition to the tax liabilities.
However, you may be able to take advantage of another exemption that would
avoid the need to enter the benefit on P11D forms. This exemption is for
accommodation, supplies and services used in employment duties. Revenue &
Customs has confirmed that this includes computer equipment, although there
are conditions – the main one is that “private use”, such as the
children doing their homework, is not “significant”.
The second condition is that the sole purpose of providing the asset is to
enable workers to perform their duties. This condition is clearly met in the
context of employees working from home, so the only requirement is that the
private use is not significant.
In practice, “private use” may be difficult to monitor, so you may want to get
an annual declaration from employees about their usage of the computers in
case the Revenue ever challenges you.
Kingston Smith LLP, the chartered accountant, and Peninsula, the
employment-law firm, can advise owner-managers on their problems. Questions
should be sent to Business Doctor, The Sunday Times, 1 Pennington Street,
London E98 1ST or faxed to 020 7782 5765. Advice is given without legal
responsibility.
bizdoc@kingstonsmith.co.uk
