You No Longer Have Two Years to Decide Whether Someone Is Right for Your Business

Are you tired of trying to keep up with employment legislation?

For many business owners, it can feel relentless.

Employer National Insurance costs have increased, National Minimum Wage and National Living Wage rates have risen, Statutory Sick Pay is now payable from day one of absence, further changes under the Employment Rights Act 2025 continue to come through, and from 1st January 2027, the qualifying period for ordinary unfair dismissal protection reduces from two years to just six months.

For employers, that creates another important question:

How quickly can you genuinely tell whether somebody is right for your business?

Because relying on instinct, vague job descriptions and inconsistent interviews is becoming an increasingly risky way to recruit.

You no longer have the luxury of “wait and see”

Hiring decisions are still too often based on gut feeling.

A candidate has a strong CV, they interview well, the conversation flows, everyone likes them.

An offer follows.

But was there a clearly defined role?

Were all candidates assessed against the same criteria?

Did the interview properly test their capability, behaviours and cultural fit?

Were you clear about what success should look like after three months and six months?

And once they joined, did anyone actually measure it?

For years, some businesses have allowed concerns about an employee to drift.

A manager notices that something isn't quite right but decides to give it another few months.

• Objectives aren't clear.

• Difficult conversations are postponed.

• Probation reviews become a tick-box exercise.

• Eventually, perhaps 12 or 18 months later, the business decides the relationship isn't working.

From January 2027, that approach carries considerably more risk.

The qualifying period for ordinary unfair dismissal will reduce from two years to six months.

Employers will still be able to dismiss employees for legitimate reasons, including poor performance, but having a fair reason and following an appropriate process will become increasingly important much earlier in the employment relationship.

There are also existing protections, including discrimination and automatically unfair dismissal protections, which do not depend on two years' service.

So this isn't about finding quicker ways to dismiss people.

It is about getting much better at recruiting, onboarding, managing and making decisions about people.

Recruitment needs to become a commercial discipline

The first six months shouldn't be the point at which you start deciding whether somebody is right.

That assessment should begin before they are even recruited.

A strong recruitment process should answer:

• What does this role genuinely need to deliver?

• What does good performance look like?

• Which skills are essential and which can be developed?

• What behaviours are needed in this organisation?

• How will every candidate be assessed consistently?

• What should this individual have achieved by month three?

• What should success look like by month six?

  
  

The days of downloading an old job description, asking each candidate slightly different questions and then choosing the person everyone “liked most” need to be behind us.

A brilliant interviewee is not necessarily a brilliant employee.

Your process needs to distinguish between the two.

Your probation process matters more than ever

Probation cannot simply be:

“We'll see how they're getting on in six months.”

It needs structure.

Managers should be having regular conversations with new employees, giving clear feedback and addressing concerns as soon as they arise.

If something isn't going well in month two, don't wait until month five to mention it.

Employees need to understand what is expected of them and have a genuine opportunity to improve.

Managers need to understand how to set expectations, document conversations, manage performance and escalate concerns appropriately.

Because a beautifully written probation policy won't protect a business if nobody actually follows it.

And what if you're planning to sell your business?

This is where recruitment and people management become much more than an employment law issue.

They become an M&A issue.

If you are preparing a business for sale, a buyer isn't simply looking at revenue, EBITDA and your customer base.

They are looking at the people who will remain once you have gone.

And one of the biggest questions will be:

Can this business continue to perform without the founder?

That means looking closely at the journey of your employees and, particularly, your senior leadership team.

• Have you recruited the right people?

• Are accountabilities clear?

• Can your leadership team make decisions without everything coming back to you?

• Are key roles dependent on one individual?

• Do you have succession plans?

• Are performance issues being properly managed?

• Do your managers know how to lead people?

• And could a buyer confidently retain the leadership team you have built?

A strong senior leadership team reduces founder dependency.

And reduced founder dependency can make a business significantly more attractive to a potential buyer.

The question for a seller shouldn't simply be:

“Are my employment contracts up to date?”

It should be:

“Have I built a leadership team and people infrastructure that somebody else would actually want to inherit?”

If you're buying a business, the questions are different

For a buyer, people risk needs to form part of the deal conversation too.

You need to understand not only what employment processes exist today, but whether that business is ready for the legislation coming next.

For example:

• How are people currently recruited?

• Are role profiles accurate?

• Is there a structured probation process?

• How are performance concerns documented?

• Are managers trained to handle difficult conversations?

• Are there employees approaching six months' service?

• Have employment policies been reviewed against forthcoming legislation?

• Is there consistency across different sites, teams or acquired businesses?

• How strong is the existing senior leadership team?

• Where are the key-person dependencies?

• What needs to change immediately after completion?

Due diligence shouldn't simply identify historical employment risk.

It should help you understand the future people risk you are acquiring.

Because once the deal completes, those employees, managers, processes and cultural issues become yours.

The legislation may feel relentless, but our response doesn't have to be.

It is understandable that business owners are feeling fatigued.

Running a business is already demanding.

Alongside commercial pressures, businesses have had to absorb rising employment costs and a significant programme of employment-law reform.

And there is more change still to come through 2027.

You may not be able to control the legislation.

But you can control how prepared your business is for it.

That means:

• Recruiting more deliberately

• Setting clearer expectations

• Training managers properly

• Managing performance earlier

• Building stronger leadership teams

• Creating people processes that work without the owner constantly stepping in

And, if an acquisition or sale is on the horizon, understanding how those people decisions affect the value and risk of the deal.

Don't hire and hope

Perhaps the biggest change businesses need to make is cultural.

Recruitment can no longer be:

Hire – Hope – Wait - See

It needs to be:

Define – Assess – Recruit - Set expectations – Review - Act

Because from 1st January 2027, you no longer have two years to decide whether someone is right for your business.

You have six months.

And whether you're growing your business, preparing it for sale or acquiring another company, those six months matter.

• The right people build value

• The wrong people create risk

• Your recruitment and people processes need to tell you which is which, early enough to do something about it

If any of this resonates, whether you’re reviewing how you recruit, strengthening your leadership team, preparing your business for sale or looking at the people risks within an acquisition, get in touch.

Sometimes the biggest risks are the ones that have become so familiar they’re no longer being questioned.

I’m always happy to have a conversation about where your business is now, what’s changing and what you may need to put in place next.