Is the future with self-driving trucks?

Is the future with self-driving trucks?

Is Self-driving trucks the future?

The technology driving the ongoing developments of self-driving trucks is certainly not new, but given the shortage of drivers entering the sector, the continuing need to reduce environmental footprint, the likely substantial safety improvements and the considerable potential cost efficiencies that could be achieved, its journey to implementation is rapidly approaching…or is it?

In this article we look at the questions everyone involved in the sector will be asking and consider the potential benefits and potential drawbacks that self-driving trucks may bring.

Self-driving trucks and the things firms need to consider

Will self-driving trucks counteract the impact of the skills shortage?

In our previous newsletter we looked at the shortage of young drivers entering the transport & logistics sector. The figures are quite worrying and with more managing directors in the sector that are under the age of 25 than there are drivers that are, a crisis is looming. The sector is urgently looking for a solution and self-driving trucks could be the long-term answer. This could of course bring a new skills shortage though. The sector will need programmers and cyber security experts, both of which are in high demand.

Will the technology improve safety?

Whether or not self-driving trucks are going to replace or (perhaps more likely) support drivers, the potential impact on safety cannot be understated. The industry has taken great strides in improving safety in recent years with additional regulation, compliance and training, but safety is still a concern. Induced tiredness and inattention still account for many accidents on the road and self-driving trucks will likely contribute to a safer environment for all.

Will self-driving trucks save money or cost money?

A recent report by DHL considering the possible implications of the technology in logistics highlighted that self-driving trucks could actually reduce costs for freight by as much as 40% per kilometre. Self-driving trucks will certainly be more cost efficient in regards to fuel consumption. However, you could argue that self-driving trucks will actually be more expensive. Will firms now be paying more wages (drivers and programmers etc?)

What impact will a self-driving truck have on the safety of goods from theft?

What additional insurance policies will now be required? What non-financial impact will this have on a company’s reputation if there was an accident? How much will it cost to replace a current fleet? These are all key questions to be considered when thinking about cost. What will the impact be on environmental footprint? The introduction of self-driving trucks is likely to reduce the environmental footprint of the transport & logistics sector due to better fuel consumption. Whether or not this reduction in carbon emissions will be marginal or substantial, however, remains to be seen.

Is the industry ready for self-driving trucks?

The simple answer to this is probably no.

The technology driving self-driving trains is arguably more advanced, yet there is still reluctance to implementation. Trains are on rails – there are many more variables to consider with trucks – such as changing routes, the road infrastructure, traffic and so on… You could also argue that the technology isn’t yet ready either.

Although self-driving technology is already being road tested by Daimler and Google, with encouraging results, it will have to be rigorously tested and scrutinised before any company serious considers implications. The risks are, at the moment, far too high.

More from our transport and logistics experts

You can find all of our latest transport and logistics sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Paul Wormald is a partner at Hawsons, working in the Doncaster office. He worked previously with two national firms of Chartered Accountants prior to joining Hawsons in 2001. For more information or advice on anything covered in this article, please contact Paul on [email protected] or 01302 367 262.[/author_info]

Managing succession in the legal sector

Managing succession in the legal sector

Managing succession in the legal sector

Law firms, just like any other business, must make preparations and plan ahead for succession.

Thorough and proactive succession planning is critical to ensuring the long-term sustainability of any law firm. Succession planning – particularly with the age profile of the sector rising and the potential lack of suitable successors – is now a key legal sector focus.

Simon Bladen, Legal Partner at Hawsons, answers some of the most pertinent questions and provides advice on managing succession in the legal sector.

Is the importance of succession planning recognised by law firms?

“Yes and no; it depends really. During the recent economic downturn a lot of law firms rightly focussed on short-term decision making, ensuring the immediate financial viability of the firm. That, regrettably but understandably, has seen succession planning in law firms put on hold. Over the next five or so years many law firms will be transitioning to the next generation, which means succession must be recognised and planned for.”

Why should succession be a key focus now?

“There are a number of reasons why succession planning is becoming a very real concern.”

“Firstly, the age profile of the legal sector is increasing and many partners are today of an age when they begin thinking about retirement. It is not uncommon for law firms to have almost half of their partners approaching retirement age. When these individuals do leave a firm, they leave large shoes to fill.”

“Secondly, the legal sector has moved on in terms of its employment status. Ten, twenty or thirty years ago it was often assumed that the next generation would work their way through the ranks to partner level; staying at the firm for most of, if not all, of their career. With a greater emphasis on work-life-balance and regional financial and social disparities, top candidates / employees can now move between firms much more than they could have, or even would have, in the past. That means there must be a greater focus on succession planning.”

What should firms consider when thinking about succession?

“For a succession plan to be viable and safeguard the future of the law firm, firms and their partners must first have to buy into it. Planning an effective succession plan is a complex and detailed process, but failure to do so risks the long-term success and reputation of the firm. Financially and strategically, the importance of key employees cannot be overlooked.

Here are some of the key things firms should considering when succession planning:

  • Identify key positions, competencies and employees within the firm.
  • Engage with partners approaching retirement to create a succession plan.
  • Manage the phased handover of existing clients and ease new partners into client relationships.
  • Review current remuneration strategies and incentives, for the partner leaving and partner joining.
  • Create a programme of appropriate strategies to retain and bring new talent through the firm.
  • Communicate with all stakeholders throughout the succession process.

What are some of the potential barriers to succession planning?

“We published an article earlier in the year about the potential barriers to succession planning in the legal sector. The lack of suitable successors, the failure to raise the subject of retirement and ensuring client retention were the three key barriers to managing successful succession we looked at. Those barriers are still relevant now.”

Any other advice for managing succession in the legal sector?

“Look at the process through the eyes of your clients. Clients enjoy stability and value the relationship that has developed over a number of years. Succession means change, and clients may not always accept change.”

“Law firms need to consider their clients at every stage of succession planning – When should clients be informed? How should clients be informed? How will client relationships be handed over? There are lots of things to consider to help safeguard the client relationship following succession.”

More from our legal sector experts

You can find all of our latest legal sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Simon Bladen Partner

Simon Bladen is the partner responsible for looking after the firm’s legal clients and has worked at Hawsons throughout his career. For more information or advice on anything covered in this article, please contact Simon on [email protected] or 0114 226 7141.[/author_info]

Free initial meeting

Solicitor Newsletter Sign-Up

Are we ready to embrace technology in care homes?

Are we ready to embrace technology in care homes?

Are we ready to embrace technology in care homes?

The number of care homes embracing technology to improve the quality of life for residents, attract new private clients or reduce administrative burdens on staff is growing.

Is the sector now fully accepting technology in care homes?

Should the sector fully adopt technology in care homes?

The use of technology is a developing issue in the care sector

In our last newsletter we looked at the importance of a care home’s website and the impact it can have on enquiries and attracting new private clients. That article was featured in the November/December edition of Care Home Management.

Scott article

In that magazine alone there were three articles focusing on technology in care homes.

This is undoubtedly a developing issue.

Earlier in 2015, commenting on the use of cameras in care, CQC said: “Concerns about care challenge us all to find solutions and as technology develops and becomes more accessible, many advocate it as an important part of the answer, while others disagree and promote other options.”

As families, residents, members of staff and care home owners are both encouraged and concerned about the introduction of technology in care homes it is important to consider the possible implications that technology may have in the sector. In this article we therefore revisit technology in care homes, but this time take a much broader look at how technology can, and indeed whether it should, shape the future of the sector.

Possible benefits technology in care homes may have

Improve quality of life for residents?

Whether it is the opportunity to video call family and friends, stimulate the residents or the ease of providing feedback, technology certainly provides operators with the chance to improve the quality of life for residents.

Attract new private clients?

As mentioned earlier in this article, we have previously looked at the growing importance of a care home’s website and the impact that it can have in attracting new private clients. That article is available here.

Reduce administrative burdens on staff?

With rising input costs – particularly the introduction of the National Living Wage and increasing energy rates – operators are now more than ever looking to maximise efficiencies in order to not sacrifice the quality of care they deliver.

What can we expect in the future?

Scott Sanderson, Healthcare Partner at Hawsons, noted: “Digital technologies are transforming nearly every aspect of our lives; the way we book holidays, pay our utility bills, communicate with friends and family, buy our Christmas presents and do our accounting.”

“Technology is now also a significant strategic tool in overcoming the challenges, financial or otherwise, that the care sector is facing. A better use of technology in care homes could see operators improve the quality of care and reduce the cost of care services for residents. Those are two key factors in attracting new private clients to the home, which is crucially important with the ongoing funding challenges.”

“The growing use of technology in care homes unquestionably marks a major step-change for the sector as a whole. However, as a word of warning: research has shown that just having the technology in care homes is usually not enough. The key to maximising the potential of technology ultimately boils down to how the technology is introduced/used and also, crucially, what training and support that is given to staff and residents. Without that training and support the introduction of technology may actually have an adverse impact on the quality of life for residents and the efficiency of administrate duties.”

“The introduction of technology in care homes, whether its surveillance cameras or iPads or any other device, must be thoroughly considered and planned for beforehand to maximise its potential. That of course brings additional financial challenges.”

The question of technology in care homes may therefore be not necessarily whether care homes should embrace technology but rather do care homes actually have the resources available to fully embrace technology?

An interesting question, and certainly more to come in this area.

More from our care sector experts

You can also find all of our latest care sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Scott Sanderson

Scott Sanderson Partner

Scott Sanderson began his career with Hawsons and trained as a Chartered Accountant, becoming a partner in 2015, specialising in the healthcare sector and small businesses. For more details and advice, please contact Scott on [email protected] or 0114 266 7141.[/author_info]

National Living Wage 2016

National Living Wage 2016

Here is your guide to the National Living Wage and how it impacts you.

The new ‘National Living Wage’ – the minimum wage for those aged 25 and over from April 2016  – has been at the forefront of many business owners’ minds since the announcement of its introduction in July 2015.

From its starting point of £7.20 per hour in April later this year (50p above the current National Minimum Wage), it is projected to rise to more than £9 per hour in 2020. The introduction of the new rate has left some business owners understandably concerned about what the future may hold, particularly those in labour intensive dependent sectors.

The extent of the impact of the new rates will undoubtedly be very uneven across different sectors but, as we have noted before, small shops, hospitality firms, retailers and care providers are likely to be some of the hardest hit by the new reform. These sectors are highly dependent on low-cost labour and work within very tight profit margins. Despite the obvious benefits for employees, employers in these sectors are likely to face major financial challenges in the coming months.

The National Living Rage

Christie + Co has recently released a very interesting new report – is the National Living Wage creating National Living Rage -gauging initial reactions to the National Living Wage’s impact on the UK labour market and specific sectors within the UK. Using some of the findings from that report and analysis from the sector specialists here at Hawsons Chartered Accountants, in this article we take a detailed look at the possible ramifications of the new National Living Wage.

We look at the following sectors:

  • Leisure and Hospitality
  • Retail, Wholesale and E-Commerce
  • Care Homes

The questions we look to answer are:

  • How will the National Living Wage impact that specific sector?
  • What can businesses in that sector do to prepare for the new rates?
  • How can businesses in that sector manage the change and absorb additional costs?

Firstly though, let’s take a look at the overall picture of the new National Living Wage and see how employers have reacted since the initial announcement.

Overall support for the National Living Wage?

A survey by the Department for Business, Innovation and Skills (BIS) carried out in November 2015, asking 1,000 employers across the UK about the new National Living Wage, has found that the vast majority are in support of the new rates:

  • 93% of all bosses agreed the National Living Wage was a good idea
  • 88% said it would make staff more productive
  • 83% believed it would make staff more loyal towards their employer
  • 86% said it would boost staff morale
  • 82% believed customers were likely to return if the business paid the right rates of pay

The survey does also, however, indicate that employers are not yet prepared for the National Living Wage:

  • Around 45% had updated payroll to take account of staff aged 25 and over on 1 April 2016
  • 39% had communicated the upcoming changes to staff
  • 29% had looked online for more information about National Living Wage entitlement

Although the research indicates strong support for the National Living Wage, it must be noted that no details were given on the size and type of employer questioned in this report. It is likely that if the BIS had asked predominately small business owners, particularly those from the sectors we look at in this article, the findings may have been totally different.

The National Living Wage by sector 

This article intends to look at the sectors that will be most impacted by the new National Living Wage, gauging insight into what the possible implications may be and, crucially, how business owners can mitigate challenges and absorb new costs.

Leisure and Hospitality

National living wage hospitality impact

The leisure and hospitality sector performed well in 2015 on the backdrop of an improving marketplace and increasing consumer confidence. However, the impact of the new National Living Wage could slowdown that growth throughout 2016 as businesses look to overcome a significant rise in wage bills.

Richard Burkimsher, Partner at Hawsons, commented: “The new National Living Wage is likely to have a very big industry-wide impact on the leisure and hospitality sector. Hotels, restaurants and pubs all employ large numbers of staff working on the National Minimum Wage, so payroll costs are expected to rise considerably. The reality is that, along with the recent onset of auto enrolment, this is yet another financial burden that businesses within the sector will have to deal with.”

The increase in wage bills across the leisure and hospitality sector will be bigger than any other sector, according to research from The Resolution Foundation (below). The research indicates that wage increases could be nearly six times more than the average across all sectors.

Estimated wage increases by sector by 2020 (Source: The Resolution Foundation)

National living wage hospitality stats

Share of employees affected by the National Living Wage by sector (Source: The Resolution Foundation)

National living wage employees affected hospitality

Richard added: “Even in the leisure and hospitality sector the impact of the National Living Wage will vary from business to business. Location and positioning in the market will be two of the key factors in determining the impact of the new rates on a specific business. For example, those restaurants in city centres – where competition is at an all-time high – may not be able to absorb the costs through increasing menu prices. Restaurants in rural areas of the country, however, will have more opportunities to raise menu prices.”

“With consumer confidence back on the up some businesses may look to pass on the cost increases to customers, but operators cannot keep pushing prices up; the market is far too competitive for that. Ultimately, a lot of operators will have to absorb the additional costs themselves and find alternative means of cutting costs, such as achieving operational efficiencies.”

Martin Wilmott, Partner at Hawsons, recently featured on the Hotel Magazine website discussing the opportunities for energy efficiency in the leisure and hospitality sector.

See below for possible ways to absorb costs and how we can help.

Retail, Wholesale and E-Commerce

National living wage retail impact

As with the leisure and hospitality sector, the retail sector had also seen steady growth in 2015 and has continued to be a vital part of wider economic growth in the UK. It too also employs a large number of staff who will be affected by the new National Living Wage.

Pete Wilmer, Partner at Hawsons, commented: “Retailers are going to be one of the hardest hit by the introduction of the new National Living Wage. Despite a big shift in the use of technology across retail – through online shopping and the growing usage of self-checkouts – retailers still rely heavily on staff; whether that’s on the shop floor, in the warehouse, in customer service or further down the supply-chain.”

“That last one, down the supply-chain, is possibly the key aspect to consider here; it’s not just wage bills that retailers will see increase with the new National Living Wage, but also the prices suppliers charge as they too look to pass on the cost of paying the additional rate. This is of course relevant for all sectors, but I think particularly for retailers who rely heavily on a cost-efficient supply-chain process.”

Research from The Resolution Foundation (below) indicates that the wage increase for businesses in the retail sector could be over three times more than the average across all sectors.

Estimated wage increases by sector by 2020  (Source: The Resolution Foundation)

National living wage retail stats

Share of employees affected by the National Living Wage by sector (Source: The Resolution Foundation)

National living wage employees affected retail

Pete added: “The sector is likely to face some major challenges over the coming months, which will have a knock-on effect on inward investment, recruitment and staff retention plans.”

“With more consumers looking to buy on the move and preferring to make purchases on the retailer’s website rather than on the high street, we could see an even bigger focus online. In theory, this could save staffing costs…but when you consider the costs of web developers, cyber security experts and so on, a move to selling online may not be the cheapest alternative. Of course you need a balance between the two, but it is important retailers consider the increased costs that come with scaling online sales.”

See below for possible ways to absorb costs and how we can help.

Care Homes

Care&NursingHomes

The care sector has faced a number of major challenges in the last 18 months and the impact of the new National Living Wage is the care sector is something we have spoken about in detail already. The impact of this new rate should really not be understated.

Scott Sanderson, Healthcare Specialist and Partner at Hawsons, commented: “Unlike the two sectors reviewed above, operators in the care sector do not always have the opportunity to raise prices in order to offset the additional costs associated with the National Living Wage. Those homes with a high number of private residents possibly can but, for the majority of homes, councils are facing their own funding constraints and cannot agree to fee increases.”

“The announcement made in the recent Autumn Statement for care homes gives cautious optimism, but will likely not be enough on its own to provide the much-needed financial support operators are asking for.”

Research from The Resolution Foundation (below) indicates that the wage bill increase for care homes could be as much as four times more than the average sector.

Estimated wage increases by sector by 2020 (Source: The Resolution Foundation)

NLW residential care stats

Share of employees affected by the National Living Wage by sector (Source: The Resolution Foundation)

NLW employees affected residential care

Scott added: “With the opportunity to increase revenues few and far between, and a parallel match in additional public funding looking unlikely, the majority of care homes must prepare to absorb the significant costs that the new National Living Wage will bring.”

See below for possible ways to absorb costs and how we can help.

All sectors

Looking at the research from The Resolution Foundation (below) it is clear that the impact of the new National Living Wage will have a varying impact across UK businesses. Some sectors, such as construction, transport, manufacturing and finance will see a much smaller rise in the wage bills than the sectors we have already spoken about in this article, as well as agriculture and support services.

Estimated wage increases by sector by 2020 (Source: The Resolution Foundation)

National living wage increases in wage bills by sector

One of the other things to consider – as well as the possible increases in supplier prices as mentioned above – is the possible increase in wage bills for other members of staff, who are not under 25 or working on the National Minimum Wage.

It is important to keep wage differentials across any business (in any sector), that reflect the qualifications, experience and role responsibilities of a member of staff. For example, if a barman sees a 50p increase in his hourly pay through the introduction of the new National Living Wage, then the bar supervisor may also expect to see a 50p increase.

It is extremely important that employers take the time to consider the possible indirect financial implications and increases in output costs that the new National Living Wage will bring.

Absorbing costs and how we can help

The Department for Business, Innovation and Skills (BIS) is advising employers to begin preparing for the introduction of the new National Living Wage. Businesses are being advised to prepare early for the changes on 1 April 2016, when the new wage will become law, and make sure they follow these 4 simple steps.

  • Know the correct rate of pay – £7.20 per hour for staff aged 25 and over
  • Find out which staff are eligible for the new rate
  • Update the company payroll in time for 1 April 2016
  • Communicate the changes to staff as soon as possible

As we have mentioned above in this article, the financial implications (both direct and indirect) of the new rates will bring major challenges to a number of UK businesses. It is therefore crucial that, with just three months left, employers take the necessary steps to make sure they are ready for April 2016.

National living wage business impact

Here is a quick overview to what businesses could / should be doing to prepare for the National Living Wage:

  • Evaluate the total additional costs that your business will have to pay;
  • Consider possible ways the business can improve efficiencies (e.g. technology);
  • Work out how to maximise the value for money you get from staff;
  • Consider outsourcing your payroll to save time and money;
  • Look at performance benchmarking to assess ways to improve profitability;
  • Look at news ways and review current strategies to attract new clients / customers / guests;
  • Consider renewable energy to counteract the cost of rising energy bills;
  • Ensure accounting records and up-to-date and constantly monitor financial sustainability;
  • Ensure the business maximises all available tax reliefs, particularly if refurbishing a property.

As experienced Chartered Accountants our dedicated sector teams are  well-placed to advise and help businesses in preparing for the new National Living Wage. We also work closely with our in-house tax and payroll specialists to provide businesses with a comprehensive and fully integrated service.

For more information on how one of the leading firms of accountants can help you, please contact your local Hawsons specialist today – or sign up for our sector news.

We offer all new clients a free intiial, no-obligation consultaiton so please contact your local office today.

Sheffield – 0114 266 7141

Doncaster – 01302 367 262

Northampton – 01604 645 600

For more contact information please click here.

For more information on our sector expertise please click here.

Leisure and Hospitality becoming more energy efficient

Leisure and Hospitality becoming more energy efficient

Becoming more energy efficient in the leisure and hospitality sector

There are numerous opportunities for operators within the leisure and hospitality sector to reduce costs by becoming more energy efficient and more waste efficient. In this article we look at how firms could reduce their energy bills, how much it might cost and why it is becoming increasingly more important.

Operators are wasting thousands every year

Energy prices have continued on an upward trend in recent years; many operators know that they are spending too much on heating, lighting and other utilities. Food waste is also a big, but often overlooked cost. Did you know that on average a restaurant wastes 22 tonnes of food every year?

When you consider the additional tax costs through disposing that waste, the business could be spending as much as £2,000 extra on landfill tax. The standard rate of landfill tax a business has to pay is £82.60 per tonne. There’s big savings to be made.

Do many operators recognise how much they could save?

Martin Wilmott, Partner at Hawsons, noted: “Unlike a lot of businesses that shut down at the end of a working day, pubs and restaurants and, in particular, hotels, often need to work round the clock. Additionally, operators are understandably cautious about implementing energy efficient practices that may impact on a guest’s experience. That doesn’t mean efficiency practices can’t exist though, as more and more operators are finding out.”

“In a sector where profit margins are already generally quite low – and with the fast approaching National Living Wage and rising utility costs – operators are recognising that this is more important than ever before. Although energy costs may only be a small percentage of a hospitality firm’s turnover, it is a cost that can be reduced, and reducing it can make a big different to the bottom line.”

What non-financial benefits might a firm see?

“Of course the financial, cost-saving aspects of implementing efficiency practices are critically important. But, they aren’t they only benefits a firm might see. Becoming more energy efficient could help improve the firm’s reputation and help to bring in new guests. This is something we have seen time and time again, particular with the leisure & hospitality sector becoming increasingly more competitive.”

Where can firms become more efficient?

“Heating, lighting, refrigeration, water and food wastage are just some of the key areas where pubs, restaurants and hotels can become more efficient.”

What examples are there of firms becoming more efficient?

“Simple things like LED lighting should really not be overlooked. You might be surprised to see such relatively minor solutions generate big savings, particular over a number of years. Other solutions such as better insulation of baths or function rooms can bring much greater savings in a shorter space of time. Raising awareness and implementing small rules like turning off lights and closing refrigerator doors can also make a big difference. Definitely get your staff involved.”

How expensive are efficiency solutions?

“That really depends. LED lighting might cost a few hundred pounds (depending on the size of your firm) to implement, whereas eco-smart shower devices, biomass boilers or solar panels will cost a lot more. I would add to that, however, by saying that most energy solutions have to be seen as long-term investments. Energy efficiency projects may have high initial costs – depending on the level of implementation a firm is thinking about – but deliver lasting savings.”

“There are also potentially significant tax savings available that must be taken into account. Items such as lighting and electrical systems now both qualify for Annual Investment Allowance, reducing your tax bills!”

“I would stress, however, that the qualifying conditions can sometimes be quite tightly defined. You should always take advice in this area.”

More from our leisure and hospitality experts

You can find all of our latest hospitality sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Martin Wilmott is a partner at Hawsons

Martin Wilmott acts as lead engagement partner for a wide range of corporate and non-corporate clients in the Doncaster office, especially in the Legal and professional, agricultural, transport, property and construction, manufacturing, healthcare and hospitality sectors. For more information or advice on anything covered in this article please contact Martin on [email protected] or 01302 367 262.