Tag Archive | "Business"


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Human capital is more than just a resource, it is your strongest asset – so look after it writes Adam Bernstein

Employees are a firm’s greatest asset and they’re probably the most expensive too. So why is it that some employers and managers seem hell bent on treating their staff so poorly? Why do they create ‘them and us’ divisions without a care?

Having a unified and happy work force is critical to success. Employees can make or break an organisation. Staff don’t have to go the extra mile, they can upset a customer base, and they will leave for other opportunities taking both knowledge and customers
with them.

Any manager worth their salt knows that recruitment of replacements is both expensive and disruptive.

Lee Ashwood, a Senior Associate in the employment department of law firm Eversheds, reckons that there are a number of common causes of employee malcontent.

In his experience, and in no particular order, there are five key areas of concern.“The first”, says Ashwood, “is company sick pay being withheld in situations where the employer has a discretion over the payment.” From his point of view, those genuinely unwell consider the withholding of monies as an arbitrary penalty.

Next he sees real and sometimes bitter disputes over pay “in relation to hours worked, what constitutes overtime and, of course, simply not being paid enough in their opinion”. The issue at hand is that the web has made salary and pay more transparent and staff consider it their right to be paid the market rate. A number of cases on this have been brought and won by employees.

Thirdly, and this is a big problem for Ashwood, is inconsistency in treatment: “I’ve seen on many occasions situations where an employee feels that they are always given the worst tasks to complete, have not been allowed time off at short notice when others have in the past, or have not had the perks that others have been given in similar circumstances.”

Fourth on the list, and one that many can attest to, is an employee thinking that their workload is too much or that work has not been distributed evenly. This disparity is a real cause of employee stress that can lead to an employer either paying for employee sickness and lost production or finding themselves in a tribunal.

The last cause for concern for Ashwood fits under the heading of bullying by managers and colleagues. Indeed, a recent report by the arbitration service ACAS has found that workplace bullying may actually be on the rise, with ACAS receiving around 20,000 calls relating to bullying each year, more than ever before.thinkstockphotos-627390700

Points raised about staff retention are true in to all businesses, but it is perhaps factors that rely most on having bright and committed individuals on their teams. However, it is exactly because these people are both bright and an asset, that rival firms will try and poach them… and if the employee thinks they are getting a raw deal at their current employer they will move. Interestingly, research shows that this rarely has much to do with money – more often than not it is to do with how they perceive themselves to be valued by the company. Consider the number of Unipart Automotive employees who ‘defected’ to other companies well before the firm went bust in 2014. If employees think there is a lack of opportunity then there will likely be a high turnover rate.

So with the scene set, why do employers make mistakes? Do they misunderstand the law? Do they deliberately ignore the process? Or are they simply failing to appreciate the value and views of their staff?

With his lawyer’s hat on, Ashwood thinks that “making mistakes in not following what the law requires is understandable as it is often complex” and not well-known. “However,” he adds, “if you treat staff with empathy and respect, you rarely give them a reason to check to see if you are treating them in accordance with the law. It is not appreciating this point that leads to very common mistakes which in turn lead to disgruntled staff, grievances being raised or, worse, Employment Tribunal claims”.

July 2013 saw the introduction of tribunal fees paid by claimants and although the number of claims has fallen from 50,000 in the first quarter of 2013 to just over 17,000 in the fourth quarter of 2015, an employee claim is not something that employers should welcome. Indeed, in a March 2015 report in the Daily Mail, The British Chambers of Commerce estimated (then) that the average cost to a business of defending itself at tribunal was £8,500 while the average cost of agreeing a settlement was £5,400.

The most obvious solution to counter discontent is for employers to take time to consider the impact of a decision on the employee in question; explain the reasons for the decision; and listen to any objection the employee may have about the decision. Following this course of action would make a number of employment lawyers very and distinctly unemployed.

Moving on, the better employer understands the importance of employee motivation, something that Richard Branson is well known for. In an April 2015 blog, How to keep your best staff, Branson underscores one of his key principles…that staff matter: “Making money or moving up the corporate ladder is no longer considered the be all and end all of career success. Today, one of the biggest indicators of success is purpose. And, in a world where purpose reigns supreme, it’s only natural for people to want to be heard and have their opinions valued.”

This logic is noted by Ashwood who understands that every staff member is likely to have different reasons and motivations for coming to work: “Just because you are solely focused on making your business as profitable as possible and would be prepared to work all hours to do this, does not mean others are or should be judged negatively because they are not. This means you should not take staff for granted and should try to tap into what motivates them in order to improve their performance.”

So let’s look at motivation. In simple terms, people work because they are either extrinsically or intrinsically motivated. The former is the poorer relation. In essence, it uses bribes to get staff to work harder – pay, holiday or some other reward. The problem is that the efficacy of an extrinsic motivator wanes given time and once the employee becomes disgruntled with the amount of tax charged to the ‘bribe’. Alternatively, and more preferable, is the pursuit of intrinsic motivation where staff do something because they want to do it. It’s the very reason why someone will willingly work through their lunch hour or will go beyond the call of duty to help a customer.

To be a successful manager that can instil intrinsic motivation within employees requires an ability to understand what an employee can do and also what they like to do. These goals can be matched in a number of ways.

Firstly, managers should help staff to develop themselves so that they maintain their market potential. Ignore this and they’ll leave for a firm that will. Next consider that staff now want a good work-life balance because after all, there’s no point being the richest man in the cemetery. Not everyone works for money – it’s the ‘eat to live’ rather than the ‘live to eat’ perspective.

Of course, businesses are not democracies, but nevertheless, staff like to feel that they have some level of input to decisions that affect them. The web has clearly exacerbated the importance of this point and firms that keep employees in the dark will eventually lose out to rumour and gossip.

Firms that don’t treat staff like automatons and who instead offer interesting tasks will keep employees more firmly engaged. It’s a sad function of modern life that people nowadays have shorter attention spans, something that can be squarely blamed on smartphones.

And lastly, staff bask in the glow of recognition for their efforts. Positive feedback and constructive criticism will do wonders for keeping an individual within a firm with velvet handcuffs.

To sum up the mantra for managers must be to look beyond the balance sheet and to those that are the backbone of the business. Get it right and employers will be on to a winner. Get it wrong and it’ll surely be the death knell of the firm.

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There’s a way to upgrade your systems without downgrading your profit


Earlier this year, Matthias Muller – chief executive of Volkswagen – remarked that the automotive industry’s reluctance to embrace new tools could cause its status to be “downgraded to that of a hardware supplier.”

He’s both wrong and right. He’s wrong in that the automotive and aftermarket industries are making great strides in manufacturing technology: functions like fleet management, maintenance, and even driving itself may be fully or partially digitised within a few years. According to Business Insider magazine, it’s expected that connected cars will generate $8.1 billion in profit before 2020.

However, Muller is right when it comes to everyday business functions such as sales, marketing, and customer service, where technology is often shunned instead of embraced. In these areas and more, technology can make a significant difference, cushioning your company against the impact of an industry slump, and laying the foundations for a profitable future.

But it won’t do either if your company and its employees aren’t fully on board. Implementing new tools and applications will be vital in ensuring the company can evolve and remain competitive, but when your staff are used to doing things a certain way, it can be hard to persuade them to do them differently. Introducing these four technology adoption initiatives will go some way towards getting your staff on side. The aftermarket may be facing some difficult times: a study from Euler Holmes, the global credit trade insurer, forecast a nine percent downturn over 2017. Attitudes to technology will, for better or worse, impact future revenues, and a failure to adapt is unlikely to be sustainable or profitable in the short and long term. The more flexible, collaborative and encouraging you are with technology, the more your company will get out of it.


1. Establish staff requirements across the business
At the very least, business tools and applications should be unobtrusive. At the very best, they should help your employees do their jobs more effectively, efficiently, and productively.

And if you’re going to roll out a new tool or application across several departments, it should be implemented with the needs of every potential user firmly in mind. Your sales team and customer service team will both need a level of access to, for example, a CRM system, but if you’re going to give one team full privileges and another limited privileges, you need to be able to explain your reasoning.

The best way to pre-empt any potential issues is to simply consult the relevant departments in advance of any rollout. Be prepared to justify the addition of this new technology, and to suggest ways that it might help them perform their job duties. Even better, get them involved in your decision-making process when looking into the available solutions.

2. Get staff up to speed
If the aftermarket is slightly technophobic, it has nothing on the wider sales profession. Entire books have been written about its reluctance to embrace new tools. They’re not alone in this: old habits and patterns are hard for anyone to break. The upshot of this is that you can’t just install a new application and say “good luck”: your staff needs the proper training.

It doesn’t matter whether you organise for this to be done in-house, or if you pay a third party to organise some semi-regular sessions. What matters is that your employees understand how to use it at the required level . If your salespeople are using the system to nurture new leads, if your account managers are using it to cross sell coil springs to customers who routinely buy driveshafts, and if your service team are using it to resolve problems, they’ll all need the proper guidance.

3. Be realistic
Technology isn’t a miracle cure-all. I can say for sure that selling in the aftermarket is part science, but the other part is pure art. A computer can’t get a tentative prospect over the line; it can’t keep a faltering customer relationship from sounding its death rattle; it won’t turn that one-off purchase of brake fluid into a recurring bulk order for engine parts.

Don’t sell tech adoption as a solution to your team’s problems. It’s there to help them focus on their problems with minimal distractions or intrusions and to remove boring admin such as data entry and meeting preparation. Tech adoption won’t let your team go on autopilot – it simply lets their skills do the talking.

4. Welcome feedback
Finally, tech adoption isn’t a one- and-done thing. Sometimes the software won’t perform as well as it should; sometimes it’ll evolve and iterate to the point where it’s unrecognisable; sometimes staff needs will simply change.

Listen to your team if they raise concerns, and when the software succeeds, show them. Let them know that, for all their gripes and difficulties, the technology is making a significant difference – even if it doesn’t feel significant as they’re using it.

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There have been a number of statements issued by trade bodies and businesses across the motor industry, following the Chancellor’s Autumn Statement.

Fuel Price

A freeze in fuel duty was welcomed by most, including Charlie Elphicke MP for Dover and Chair of APPG for the Fair Fuel campaign. He said: “I’m delighted the Chancellor listened to the concerns of drivers up and down the land. He is absolutely right to put more money in the pockets of hard-pressed families and small businesses.”

Brian Madderson, Chair of the RMI’s Petrol Retail Assoc. also broadly welcomed the news. “In 2016 the freeze in duty boosted GDP by 0.57%, generated 112,000 new jobs and put £5.3bn back into hard working Brits consumer spending. It also bolstered tax revenues by 0.2%” he said.

“Trend volume sales in diesel have delivered a tax windfall to the Treasury of £1 billion and we will be looking to persuade the Chancellor to deliver an actual fuel duty cut in the Spring 2017 Budget”.

However, Madderson’s glee was not shared by TV presenter Quentin Willson who said: “I’m disappointed that the Chancellor didn’t instantly put money into everyone’s pockets by cutting duty. There’s an immediate benefit to the economy. I’m surprised too given the CEBR has said cutting duty by 3p wouldn’t change net tax receipts. This is a lost opportunity from a government still afraid of supporting drivers and roads”.


The Chancellor pledged a significant amount for rebuilding the UK’s crumbling road network. This went down with most people, including contract hire firm LeasePlan’s MD Matt Dyer, who said: ““The vehicle rental and leasing industry contributes £24.9 billion a year to the UK economy and in 2015 the leasing industry accounted for half the number of new cars registered on the road. So this news will be especially pleasing for businesses, whose roads have suffered from poor organisation, congestion and pitted surfaces for decades. These roads are vital for the businesses that will power the country through years of lower-than-expected growth, so it is reassuring that the UK Government now views this as a priority.”

However, Dyer’s enthusiasm for infrastructure was tempered by a complex rule change regarding ‘salary sacrifice’, a mechanism where people can pay into a plan to lease a vehicle for work, a change that obviously affects the leasing sector.

SMMT also welcomed the infrastructure plans, but added a caveat. “SMMT welcomes the government’s commitment to improving infrastructure and investment in R&D, an area in which UK automotive punches above its weight” said Mike Hawes, Chief Exec of the Society. “We are, however, disappointed that the government has not done more on business rate reform. SMMT called for the removal of plant and machinery from business rates valuation, which would have helped encourage further investment at this time of great uncertainty”.

Motor Insurance

Jason Moseley of RMI Bodyshops was glad of plans to reform insurance claims, particularly those for whiplash. “We welcome the chancellor’s announcement to tackle the whiplash epidemic, and plan new reforms will crack down on minor, exaggerated and fraudulent claims” he said.

“The news means that millions of motorists could see their car insurance premiums cut by around £40 a year as a result”.

Whiplash claims have risen by 50% over the last decade, costing insurance companies about £1bn a year.

However, Ian Hughes, chief executive of Consumer Intelligence sounded a note of caution: “The first thing drivers should notice is a reduction in nuisance calls from predatory claims companies.  The need to produce medical evidence means that whiplash claims are no longer an easy and profitable for the “no win, no fee” market” he said.

“Drivers would also be wise to shop around to test whether their insurer is indeed lowering their premium in line with promises. There have been false dawns before. Insurers promised to pass on the savings when the LASPO (Legal Aid Sentencing and Punishment of Offenders) reforms came in three years ago. But when those reforms didn’t deliver the reduction in claims that insurers expected, rates rose again and are up 13.5% in a single year” he concluded.

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Firm launch range of aftermarket parts

Firm launches range of aftermarket parts

Transmission product maker NTN-SNR has launched a number of products designed to capture a segment of the aftermarket.

Previously, the Japan and France-based firm has concentrated on OE contracts, but it has decided that the time is right to cater for a part of the market currently dominated by remanufactured products.

The company used an event in France to launch the new items ahead of last month’s  Automechanika. Initially the range will consist of a number of driveshafts and boot kits.

Christophe Espine, Marketing at the company said: “Innovation, whether it comes from OEM development or is specific to the aftermarket, is there to enhance our offer”.

The firm won the prize for product innovation for the compact design of it’s driveshafts during Equip Auto 2015.

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James Williams is an associate in the Finance and Restructuring team at law firm Eversheds. Comment@haymarket.com

As a general rule, people will try to buy an asset such as a fork-lift truck or a four-post ramp for as low a price as they can while incurring as little risk as possible.

Unfortunately, a lower price usually corresponds with an increase in risk. However, when making a substantial outlay for non-real estate assets – say a vehicle or an item of plant – its quite common for the transaction to proceed without legal advice and with only the most basic due diligence exercise. As can be imagined, transactions involving second hand items are the most troublesome; buyers need to take precautions.

It sounds obvious, but being clear what you intend to buy is important. Although not appropriate in all cases, there is no substitute for going to look at the asset(s) yourself at their present location. If possible, serial/model numbers should be recorded and incorporated into the sale contract. You should also note whether the assets are located on the seller’s own premises, or if they are held by a third party. If held by a third party, ask why?

Who are you buying from? Again, it sounds obvious, but it is quite common to see the wrong party recorded in the sale contract. Ask specifically, who/what owns the asset(s) in question. If there are several companies recorded at Companies House with a similar name (all part of the same group), make sure you address this point specifically. It’s common for company names to change overtime or for the trading business to switch from one entity to another, but for standard form sale contracts to remain in the name of the old (possibly dissolved) company. Don’t accept a contract in the name of “XYZ Limited” if the only names appearing at Companies House are “XYZ Trading Limited” and “XYZ Assets Limited” – insist on the proper name being entered in the contract along with the company number (which never changes).

Make it your business to know who the person you are speaking to in relation to the sale is and their job title/role at the seller. Does such a person have authority to bind the seller?

It’s worth noting that English law recognises several types of ownership with each being given its own particular set of rights and position in a hierarchy of potential ownership claims.

The pinnacle of the ownership pyramid is the holder of legal title followed by other types of title, such as possessory title (assets in your possession). It is important to understand that while a seller may hold some title to the assets they are selling (such as possessory title) they may not hold the legal title, which may be claimed by a third party.

Extra care should be taken when considering purchasing assets which are commonly subject to hire purchase agreements. Consider a credit search as it may well reveal existing hire purchase agreements.

By far the most common third party rights encountered will be in relation to a lender’s security or an attempt at retention of title by a seller further up in the supply chain.

Most buyers should be familiar, in relation to corporate sellers, with the process of conducting searches of a seller’s charges register at Companies House prior to making a major purchase. Such a search will reveal all registered charges over the seller’s assets, increasingly such searches will reveal the exact terms of the charge documents including the detail of fixed (over a given asset) and floating charges (over company assets as a whole). Advice needs to be taken if there a positive search is returned as buyers may end up paying for an asset where they gain no title.

The same applies where a prior owner claims retention of title over an asset. The law in relation to retention of title clauses can be quite complex and whether one is enforceable or not depends on the type of asset involved, the drafting/incorporation of the clause in question, and the facts surrounding the transfer from the original seller and onwards from the secondary seller.

It is also worth highlighting that other third parties may gain rights over the assets in question, such as a “baliee” – a person with possession of the asset, but not ownership, who can retain possession until paid for their services or storage. So certainly in terms of vehicles, it’s important to understand where the assets are being stored prior to the sale and to obtain confirmation that any third party storage (or repair) costs have been paid.

In certain situations, such as a sale by administrators of a company, it will be almost impossible to obtain warranties as to title and statutory protections will likely be specifically excluded. In such cases it is likely that the buyer will be purchasing the assets at a significant discount and so the risk of non-passage of title is balanced. However, that’s not to say a buyer should enter in to such contracts without a full appreciation of the facts and risks.

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Exchange fluctuations are avoidable

ADAM BERNSTEIN is a freelance business writer specialising in management, marketing and the law

is a freelance business writer specialising in management, marketing and the law

While many retailers only buy and sell in sterling, the effects of currency changes will be an issue for manufacturers and distributors and by extension, retailers too. Anyone watching the slide of sterling in the run-up to the Brexit vote last month will have seen import prices rise while exports became more competitive. So how does the currency process work and what can be done to fix a commercial exchange rate?

There are undoubtedly all manner of ways to complicate things and while there are as many variations on currency products as there are permutations on a lottery ticket, there are also some straight- forward steps that businesses can take to manage currency risk.

As business becomes increasingly global, especially where products are sourced for retail, the issues surrounding foreign exchange management become ever more pressing.


David Johnson, a Director of Halo Financial, a foreign exchange firm, says that a conversation about currency risk generally starts with minimising exposure and that gambling on exchange rates can be a recipe for disaster. “There are risk management tools which can be utilised” ” he says. “Anyone who claims to be able to pinpoint exactly where an exchange rate will be at a certain point in the future is deluded.” Johnson adds that a market with millions of participants which transacts $5.3tn a day is not something which can be forecast with any level of certainty.



For those that are entirely risk averse, as soon as they have an identifiable currency risk, they might choose to purchase all of their currency requirements. If cash f low allows, they may wish to do that and hold the proceeds of the contracts on currency accounts pending payment requests. They will have removed exchange rate variation from their planning and have the flexibility of cash at hand in the correct currency when they need it. Johnson says that if cash f low doesn’t allow for that and this is the more likely scenario, they can still cut all risk through the use of forward contracts which use today’s exchange rate upon which to put a contract in place while delaying the final settlement of that contract for up to two years. This generally requires a part payment / deposit initially but it aids cash flow by keeping the bulk of funds available as working capital. “The other advantage of forward contracts”, notes Johnson, “is that, if payment is required more urgently or if the payment needs to be delayed, the forward contract can be flexed to either draw down for early delivery or extend (roll over) to a late settlement date if necessary.” It appears that many companies find that forward contracts are the tool of choice for payment of invoices on 30, 60 or 90 day terms as they provide exchange rate certainty for the whole credit period. Forward contracts are also used where goods are received on consignment or where letters of credit are required.

A firm that wants to see if the exchange rate is moving in their favour, and who wants to wait to see if there is some advantage to be taken from that trend, should consider a stop loss order (SLO). “This device is placed into the foreign exchange market with a market maker to guarantee a minimum exchange rate. The order sits as a latent instruction but isn’t actioned until the market moves in such a
way as to trigger the order,” explains Johnson. He illustrates the point with an example: A distributor needs to buy US dollars and the current market exchange rate is $1.42 but the trend looks like it is heading higher, they may be tempted to wait for a better level. Obviously the ever-present risk is that the trend changes and the pound slumps through to $1.35, wiping out any profit. Let’s assume they cannot make a return on the contract unless they can achieve at least $1.40 or better. In these circumstances, they could place a SLO at $1.40 to guarantee that rate as the worst case scenario while leaving the opportunity to buy at higher levels if the pound continues to rally. Essentially, even if the pound collapsed, as soon as the sterling – US dollar exchange rate fell to $1.40, the order would be triggered and they will have bought their US dollars.

There is another alternative to the SLO – options. Johnson says these are used by many companies, especially where they have sizable requirements and/or long term projects. He cautions that they can be expensive because plain vanilla options, as the basic form is termed, require the payment of a non-refundable premium yet they serve the same basic purpose as an SLO. The flexibility in an option is in the right not to exercise the right to buy at the option level unless needed.

Automated orders can be used in another way. A limit order can be used to target an advantageous exchange rate which is above the current level. According to Johnson this works because the foreign exchange market doesn’t rest. Trading begins on Sunday night UK time and continues around the clock until the US markets close on Friday night. “One by-product of this is that some of the most volatile periods occur when individual markets are opening or closing. This volatility can be captured by placing automated limit orders at pre-determined exchange rates. As long as the market trades to the nominated level, the order will be filled.” Clearly firms need to plan ahead.

To a large extent, planning is the key to every aspect of success in managing your currency needs. If you ask all of your questions in advance, dot all the i’s and cross all the t’s you will suffer fewer shocks and avoid nasty surprises.

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Helmut Ernst

Helmut Ernst

Component manufacturer ZF has re-affirmed its commitment to ZF at a press conference held during Automechanika. The conference was led by Head of ZF Services Helmut Ernst, alongside Neil Fryer, VP of aftermarket at TRW.

Ernst said in an interview with CAT after the conference that the combined organisation will change in the UK, but only as the market changes.

Describing the brand as ‘an asset’ he also said that there was ‘no reason’ to think that any of the sub-brands such as Brake Engineering would be affected. “All of the arrangements that TRW has made for a direct link to customers have their reasons. If it was logical for TRW to look at different levels of the aftermarket, we can clearly follow their logic, also” he said.

Commenting on the changes to UK operations, Ernst said: “ZF Services in the UK will change as the market changes. There will be a steady change and to bring together these two very successful aftermarket operations is only the first step”.

Ernst believes that networked vehicles with complex electronic systems represent the next big opportunity for the aftermarket. “The car is changing in respect of connectivity and we must be ready to service and repair these systems. It shouldn’t just be down to the vehicle manufacturers – it should be an open market” he said. “I don’t think it would be a threat as long as the access is there and we will deal with that”. To develop this, the firm has opened a new division called Openmatics to deal with aftermarket fleet telemetry.

When we asked what he would most like to change in the aftermarket, Ernst replied: “Nothing! I like the aftermarket just as it is”.

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Volume by percentageA report has been published identifying a £195 million opportunity for UK aftermarket firms to expand in three major emerging markets, as demand grows across the world.

The UK automotive aftermarket is thriving, ranking fourth in Europe and ninth in the world in terms of size, and turning over an annual £21.1 billion, according to the report. The sector supports 345,600 jobs and contributes £12.2 billion each year to the economy. And it is growing: in line with the UK’s increasing car parc, the sector’s value is set to rise to £28 billion by 2022.1 The UK also enjoys robust trade with other European countries, with Germany its largest market, followed by France and Spain. In fact, Germany purchases more components and accessories from UK-based parts suppliers than it does from any other country.

However, an SMMT Frost & Sullivan report shows that international markets and in particular emerging markets, offer the biggest potential for growth. International Opportunities for UK Aftermarket Companies shows that suppliers exporting to these regions can grow their businesses at rates four to five times higher than the annual 3% they can expect in the UK. The total global opportunity stands at some £500 billion for aftermarket business.

The report explores the potential for growth in three key emerging markets: China, India and the GCC region of the Middle East.2 Together, these three aftermarkets are worth some £54 billion – so the potential for growth is significant. Just by keeping pace with these markets’ natural growth, UK aftermarket companies could double their income to £195 million over the next seven years.

The UK automotive aftermarket sector is part of an industry which relies heavily on the tariff-free flow of goods across borders, with component sub-assemblies often sourced from a diverse range of countries. Further growth into new markets would benefit from new trade agreements, but that should not give reason for delay.

Mike Hawes, Chief Executive, SMMT, said, “The UK’s aftermarket sector is one of the world’s most dynamic and the record attendance at Automechanika Frankfurt demonstrates the sector’s success and global ambition. To help companies exploit these opportunities, government must secure the competitive conditions that have allowed this export-led industry to thrive. This means tariff-free trade with our partners across Europe and further trade deals with emerging markets.”

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Lee Ashwood It can be just banter to some, but it can be harassment or discrimination to others – and it could cost you as the employer a whole heap of trouble and cash.

Lee Ashwood is an employment law solicitor at law firm Eversheds LLP

Lee Ashwood is an employment law solicitor at law firm Eversheds LLP

Most people would hope and expect that bullying is confined to the playground and not something that we need be concerned with as adults in the workplace. Unfortunately, that is not the case and a recent report by the Advisory, Conciliation and Arbitration Service (ACAS), a government-funded organisation which provides information, advice, training, conciliation and other services for employers and employees to help prevent or resolve workplace problems, has found that workplace bullying may actually be on the rise, with ACAS receiving around 20,000 calls relating to bullying each year, more than ever before.

In recent years, there have been various reports and studies that have been carried out to determine the true extent of workplace bullying. In 2005, the Fair Treatment at Work survey of employees found that 1 in every 25 of those who responded had personally experienced bullying or harassment in the previous two years. By 2008, the number of employees who had personal experience of being bullied or harassed had nearly doubled. Also, in 2008, another survey found that nearly half of all the employees who responded had experienced what they considered to be unreasonable treatment over the previous two years.

With employees believing they are being bullied in the workplace, employers should be aware of what ‘bullying’ is. The surveys from recent years have used significantly different definitions and descriptions of bullying (which probably explains why the statistics can vary significantly). Perhaps the most helpful, concise and easiest to understand definition comes from ACAS who say that bullying is ‘offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means that undermine, humiliate, denigrate or injure the recipient’. However, what is important to realise is that workplace bullying does happen and it could happen at your workplace.

The impact workplace bullying can have on a business should not be ignored or underestimated. You can be sure that that if bullying is taking place in your business then it will have a negative impact on morale and will result in a lower level of performance and productivity. This, of course, has an impact on your business’ overall performance and it has been reported that that the economy- wide aggregated costs of bullying-related absenteeism, turnover and lost productivity is £13.75 billion per annum.

If an employee has been subject to behaviour that they perceive to be bullying, particularly over an extended period of time, and they do not think they have been supported enough by their employer, they may resign and bring an Employment Tribunal claim for constructive dismissal. Their claim would be founded on their contention that they no longer had trust and confidence in their employer to provide a workplace free of bullying. If the employee succeeds with their claim, their employer who will already have faced the time, cost and inconvenience of defending the claim, may be ordered to pay the employee compensation up to the value of the employee’s annual gross salary (up to a maximum of £78,335).

The employee may also bring an Employment Tribunal claim for discrimination, irrespective of whether or not they have resigned, if they believe that the reason they were subjected to bullying was because of their gender, disability, sexual orientation, age, race or religion. Employers may not even be aware of the prospect of such a claim, as an employee is not under any obligation to use their employer’s grievance procedure before
bringing a claim.

If an employee does bring a Tribunal claim, it can be a particularly difficult situation to manage because, of course, they will still be in work and, therefore, close to the person they have accused. Ultimately, if the Employment Tribunal finds that the bullying was discriminatory, it can order the employer to pay the employee compensation for the injury to their feelings of up to £33,000.

Addressing bullying in the workplace is no easy task but it shouldn’t simply be ignored. Having a well-publicised grievance procedure or dignity at work policy in place certainly helps as it means that employees will know what to do if they think they are being bullied which, in most instances, is to bring it to the attention of their managers. However, that is only the start of the process and will not, in itself, be sufficient to remedy the problem.

Good practice and certainly what ACAS advocate is that the allegations of bullying are investigated thoroughly and impartially to establish what has gone on, that is, who has done what or said what to whom. The investigation should include interviewing the employee who has raised the allegations, the alleged perpetrator and any possible witnesses to the alleged events, which would normally be colleagues. Having done so, the employer should report back to the employee on their findings, what they believed happened. Most importantly, the employer should establish with the employee what is going to be done in the future to ensure that the employee is supported and comfortable at work. This can often involve moving the employee away from the bully or having them both attend a mediation session to ‘clear the air’. Of course, if someone is found to have bullied a colleague, you should consider disciplinary action and training them on the standards of behaviour that are expected of them to ensure it does not happen again.


In addition to the obvious costs of increased absenteeism and lost productivity, there are the costs that are not so readily obvious, for example:

  • Increased recruitment costs due to having a higher turnover of employees;
  • Losing experienced employees you have invested time and money in training; and
  • Management time spent investigating and responding to employee complaints.

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Matthew Say gives us a guided tour of Hella UK’s Oxfordshire facility

vital_stats_hellaThere are some companies that make like to play on their country of origin: some of which you can probably think of – and perhaps it is no wonder. For example, anyone who has ever visited the Dubai edition of Automechanika will know that a great number of visitors will head straight for the German pavilion without looking at the rest of the show, such is the power of Brand Germany’s reputation for Teutonic efficiency.

Hella is a German business with a global footprint. It is larger than you might imagine. It has constantly been in the top 50 largest global automotive suppliers and in the top 100 industrial companies in any category in Germany and worldwide operates a dozen joint ventures, although few people will know this. The quality of the products has never been in doubt, but prior to a marketing campaign that started earlier in the year, not everyone knew what the company offered.

“I think we’ve been focused on developing the products and service but not on sending that message to the market” explains Matthew Say, Managing Director, “We’ve just built a very good business under the radar. We’ve grown every single year in the UK, but we’ve done it by stealth. There are a lot of companies that make more noise than us but are going backwards. Now it’s our turn to make some noise, not to scream and shout, but I think if you are going to take a message to the market it is always better to do that from a position of strength and growth”.

This strategy has already started to take place. You might have noticed the cover gatefold on the June issue of CAT as well as the adverts on the inside pages – and this is just one of many examples of the brand increasing its visibility to the motor trade.

One of the reasons why the firm is now ready to actively promote itself is the acquisition of an 83,000 sq. ft. site in Chipping Warden. The core of the newly refurbished space is a warehouse that is much larger than the firm previously had which means availability has improved. It also boasts improved processes, such as pick-by-voice and barcode-indexed stock.
The rest of the site provides a training workshop and conference rooms.

A larger, leaner space means more stock is available to be picked and once easier to get through the door. “There is a very good availability and the parts arrive when we say they will” says the MD. Also, the range is developing and growing quickly –we can react far quicker than we did [when delivering from the previous location]”.

The improved space meant that the firm could write a ‘customer charter’. “It’s a service commitment to our customers” explains Say. “We wanted to provide a written guarantee that their phone calls and emails will be answered and that our logistics will be first class”. He added that the decision to put a charter in place arose from a discussion with colleagues about how it felt as a consumer to receive poor service from a large company, such as a utility firm or a telco. “Dealing with a poor representative on the phone will shape your impression of the business. From our perspective, we just wanted to eradicate those negative things – and keep it customer centric” he said.

To help with the expansion, the firm has recruited a number of staff over the past year. Among others, Iain Molloy joined as a Business Development Manager with the garage equipment team, Matthew Smart is a new Product Manager, Nicky Coombe joined as a Credit Controller , Bill Johnson, Sales Director, Chris Griffin, Head of Pricing, Helen Goldingay, Marketing Manager, and Matthew Say himself is reasonably new to the firm, having joined the company in 2015.

All of these changes amount to a significant amount of investment and internal restructuring, but as Say highlights, the changes are necessary. “The thing about the aftermarket is that if you are not good at what you do, consumers will let you know very quickly. We operate in a highly competitive environment that requires the highest quality of products and service.”

The new facilities and plans should help Hella keep its brand ahead of the competition. “We’ve been here for 42 years and at the moment we are looking at great growth cycle that looks set to continue. We are truly delighted with our progress over the past year, culminating with approvals from all the major groups and networks” concluded Say.

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