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John Kitching

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Regulation Seminars

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Does Employment Regulation
Burden Small Employers?
John Kitching
ESRC Seminar on the Regulation of Work and Employment
Newcastle University Business School
22 January 2014
Research objectives
 How might employment regulation burdens be
conceptualised?
 What factors influence employment regulation burdens?
 What are the implications for our understanding of the
influence of employment regulation on small employers?
Research context
 employment law argued to be a burden for small employers:
• limited managerial capacity, vulnerability to external shocks
• informal reactive approach to HR problems
• fear of exposure to litigation & legal sanctions
 contrary evidence emphasises variability of regulatory effects
(Edwards et al. 2004):
• informal relations permit absorption of costs
• external market conditions exacerbate/mitigate impact of regulation
 variable employer confidence in employment law compliance
 prevalence of ‘regulatory burden’ discourses promoted by powerful
social agents
Analytical Framework 1:
An ontology of regulation and its effects
 social reality as stratified (informed by critical realist
philosophy & social theory):
• deep level (regulation as rules with causal powers)
• actual level (employer actions to comply/adapt)
• empirical level (perceptions of actions & effects)
 levels out of phase:
• regulation only produces effects by being perceived & acted upon
• regulatory effects cannot be reduced to agents’ perceptions of
effects
• regulation is enabling as well as constraining - if regulation was
solely a constraint, how could employers exercise agency at all?
Analytical Framework 2:
Conceptualising regulatory burdens
 substantive – implementing actions mandated by regulation
 administrative – costs of identifying & interpreting
obligations, including advice-seeking
 psychological – subjective employer uncertainty/anxiety
surrounding compliance:
• frequent regulatory change
• complexity
• threat of legal action
• loss of control/constraint on employer agency
Method
 sample - 20 UK small business, in a range of sectors:
• 13 micro, 7 small firms (employed 2-19 employees)
• mostly established firms (only four aged 3 years or younger)
• located in London, Birmingham, Leeds, Glasgow
 data collection:
• qualitative, face-to-face interviews with employers/managers
• emphasis on process, temporality & motivations for action
• data obtained on HR practices prior to asking about awareness &
influence of regulation
• none of the 20 firms employed a HR specialist
• no data from employees

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John Kitching

  • 1. Does Employment Regulation Burden Small Employers? John Kitching ESRC Seminar on the Regulation of Work and Employment Newcastle University Business School 22 January 2014
  • 2. Research objectives  How might employment regulation burdens be conceptualised?  What factors influence employment regulation burdens?  What are the implications for our understanding of the influence of employment regulation on small employers?
  • 3. Research context  employment law argued to be a burden for small employers: • limited managerial capacity, vulnerability to external shocks • informal reactive approach to HR problems • fear of exposure to litigation & legal sanctions  contrary evidence emphasises variability of regulatory effects (Edwards et al. 2004): • informal relations permit absorption of costs • external market conditions exacerbate/mitigate impact of regulation  variable employer confidence in employment law compliance  prevalence of ‘regulatory burden’ discourses promoted by powerful social agents
  • 4. Analytical Framework 1: An ontology of regulation and its effects  social reality as stratified (informed by critical realist philosophy & social theory): • deep level (regulation as rules with causal powers) • actual level (employer actions to comply/adapt) • empirical level (perceptions of actions & effects)  levels out of phase: • regulation only produces effects by being perceived & acted upon • regulatory effects cannot be reduced to agents’ perceptions of effects • regulation is enabling as well as constraining - if regulation was solely a constraint, how could employers exercise agency at all?
  • 5. Analytical Framework 2: Conceptualising regulatory burdens  substantive – implementing actions mandated by regulation  administrative – costs of identifying & interpreting obligations, including advice-seeking  psychological – subjective employer uncertainty/anxiety surrounding compliance: • frequent regulatory change • complexity • threat of legal action • loss of control/constraint on employer agency
  • 6. Method  sample - 20 UK small business, in a range of sectors: • 13 micro, 7 small firms (employed 2-19 employees) • mostly established firms (only four aged 3 years or younger) • located in London, Birmingham, Leeds, Glasgow  data collection: • qualitative, face-to-face interviews with employers/managers • emphasis on process, temporality & motivations for action • data obtained on HR practices prior to asking about awareness & influence of regulation • none of the 20 firms employed a HR specialist • no data from employees
  • 7. Findings 1: Influences on regulatory burdens  contingent upon conception of ‘burden’  psychological - vulnerable compliance v confident ignorance?  employer confidence rested on a number of bases (conditions of possibility): • non-occurrence of employee litigation • belief that employees wouldn’t litigate (influence of informal recruitment) • prior knowledge of employment law • belief HR practices were fair & defensible, despite an absence of certainty • access to expertise from trusted, formal & informal intermediaries providing tailored advice & reassurance
  • 8. Findings 2: Impact on employer agency  employment regulation constrains employers: • HR problems occur at particular times that prompt the search for solutions (e.g. recruitment, dismissal, redundancy, maternity leave) • … often incurring administrative costs of advice-seeking • but: not perceived as a general burden or major impediment to employer agency  but: employment regulation also enables employers: • otherwise, how could they manage a profitable business at all?  regulation impacts employers whether or not they are aware of this &/or report it or not
  • 9. Conclusions and implications  need for a stratified conception of regulation and its effects  contrasting conceptions of ‘regulatory burden’: • substantive/administrative v psychological burdens • temporal variation in psychological burdens & actions to ameliorate  research agenda: • how does employment regulation enable and/or constrain employer agency? • under what conditions? • with what effects? (for employers, employees)