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How small firms can manage legal compliance costs

Compliance with laws on health and safety, data protection and HR procedures is vital for small firms. But ensuring that all the right practices, procedures and policies are in place comes at a cost. How can these under-pressure businesses afford it?

The topic may not often make the headlines but at a time when the concept of the workplace has been turned on its head and company operating margins are being stretched to breaking point, achieving and maintaining legal compliance is far from straightforward.

What a changing marketplace means for legal compliance

Health and safety is a good example of the change in workplace environment, with the pandemic shifting the parameters of employer responsibility in this area, both in terms of physical and mental health. According to the UK Health and Safety Executive, over one million workers were injured or made unwell as a result of their jobs between 2020 and 2021. Work-related stress, overuse injury and Covid-19 were the most common ailments reported during this period.

Data protection also continues to be a hot topic for small firms, with many still getting to grips with handling and processing data in line with the General Data Protection Regulation. Cybersecurity remains a key issue, with the need to protect data never greater.

Again, the pandemic has changed the landscape here, in particular with home-working and the explosion in e-commerce introducing new vulnerabilities.

Staffing trends and the importance of HR compliance

Going beyond health and safety and data protection, compliance also means having the right human resources policies, protocols and procedures. One area in which this is particularly important is recruitment and employee management, not least as staffing shortages are make the retention of talent even more vital. According to a new study from Nat West Mentor, more than a quarter of SMEs have been unable to replace lost staff.

Meeting compliance costs and how alternative finance can help

Legal compliance requires considerable resources and investment, including in systems, safeguards and training, and this all comes at a cost. For small firms being battered by historic headwinds, finding the capital to meet these demands and safeguard cashflow is challenging to say the least. This is where alternative finance can help.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic and amid challenging market conditions in 2022, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth. Notably, alternative lending has played a prominent role in the government’s headline emergency support schemes, including the Recovery Loan Scheme. This profile has helped cement the reputation of alternative finance in the business sector.

Legal compliance bills and small firm finance options

At a time when it’s easy to get wrapped in the headline issues, the importance of legal compliance shouldn’t be forgotten. It is critical that small firms are compliant with health and safety, data protection and other workplace laws. With unprecedented pressure on capital resources, it is vital that businesses are aware of all the finance options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.

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