The Employment Rights Act Is Changing What It Costs to Employ Someone. Here Is the Honest Arithmetic.

Most business owners have a rough idea that hiring has got more expensive. Very few have actually sat down and worked through what a single front-of-house hire costs them in 2026, against what it cost three years ago, and against what the alternative actually runs to. This article does that arithmetic plainly and without softening the numbers.

The scenario is a real one. A small business owner, running a five to eight person operation, decides they need someone to answer the phone, field enquiries and handle the admin that is currently falling on their own desk at nine in the evening. They are not looking for a senior hire. They want competent, reliable, presentable. Someone to hold the front line.

What does that decision actually cost them?

The Full Cost of a Direct Hire in 2026

Start with salary. A capable front-of-house administrator in most parts of the UK will expect somewhere between £26,000 and £30,000 a year. Call it £27,000 to keep the maths clean and not entirely favourable to either side.

Employer National Insurance is now 15%. It was 13.8% before April 2026. And the secondary threshold, the point at which you start paying it, has dropped to £5,000 per year. On a £27,000 salary, your NI liability runs to approximately £3,300 a year. Not ruinous on its own, but it is money that does not appear on the offer letter and that your new employee will never see.

Then there is Statutory Sick Pay. From April 2026, SSP is payable from day one of illness. The three-day waiting period is gone. The average employee takes around six to seven sick days a year. At the current SSP rate, the direct cash cost of those days is modest, but the operational cost is the point: on those days, the phone still rings, the enquiries still come in, and the person you hired to handle them is not there. You are either covering it yourself, paying someone else overtime, or losing the calls.

Pension contributions add a further 3% at minimum, assuming auto-enrolment and your contributions at the statutory floor. On £27,000, that is another £810 a year.

Recruitment, if you use an agency rather than a job board, typically costs one month's salary or more. Even a self-managed recruitment round, job board fees, the time spent reading 200 applications, interviewing, referencing and onboarding, easily runs to two or three weeks of your own time. Time that, if you bill it, is worth money. Time that, if you do not bill it, is just gone.

Add a laptop, a phone, software licences, a desk if they are office-based, and whatever HR platform you are using to stay on the right side of your obligations. Conservatively, say £1,500 to £2,000 in the first year.

The total cost of that £27,000 hire, in year one, is closer to £34,000 to £36,000 once you have added NI, pension, equipment and recruitment. And that is before a single day of sick leave, before a single call goes unanswered during a lunch break, and before the management time you will spend supervising, supporting and reviewing someone who is, by definition, new to your business.

The Probation Problem

Here is where the maths changes in a way that is harder to quantify but genuinely matters.

The unfair dismissal qualifying period is being reduced from two years to six months, expected to take effect from January 2027. Legal commentary is clear that this will apply to employees already in post, meaning anyone you hire from around July 2026 onwards will acquire those rights within their first six months with you. In practical terms, you cannot simply let someone go at month five if things are not working, without the kind of documented performance management process that most small businesses without dedicated HR resource are not equipped to run efficiently.

This is not a reason to never hire anyone. But it does change the risk profile of a hire. If the person turns out to be the wrong fit at month four, your options are narrower than they were eighteen months ago, and the process of managing them out cleanly, with proper records, a fair process and ideally some external HR advice, is going to cost you time and, most likely, money.

That cost is unquantifiable in advance. But it is real, and it belongs in your decision.

What an Outsourced Business Assistant Actually Costs

A Business Assistant arrangement from Need More Time is not priced on this page and does not need to be. The point of the comparison is not the specific number; it is the structure of the cost.

With an outsourced arrangement, you pay for coverage, not for a person. There is no employer NI, because you are not the employer. No pension contribution. No sick pay liability, because when one team member is unwell, the calls do not stop being answered. No recruitment cost if someone leaves. No laptop. No probation risk, no performance management, no employment tribunal exposure.

What you are buying, in practice, is a trained team who learn your business, answer calls in your name, handle the administration you specify and message or transfer calls according to your instructions. No scripts, because scripted answering sounds scripted and callers know it. The team operates Monday to Friday, eight in the morning to six in the evening, which covers the working hours when the vast majority of inbound business calls actually arrive.

The flexibility runs in both directions. A Business Assistant arrangement can scale when the work increases, pull back when it does not, and adapt as your business changes shape. A permanent hire does none of those things without either a redundancy conversation or a renegotiation.

There is also the question of management time. A direct hire requires active management: induction, supervision, regular reviews, holiday cover planning, absence management. Some business owners genuinely enjoy building a team and are good at it. Others find it a drain on exactly the kind of focused time that drives their actual revenue. An outsourced arrangement transfers that overhead back to the supplier.

When a Direct Hire Still Makes More Sense

This comparison is more credible if it says the quiet part aloud: there are situations where a direct hire is the right answer, and pretending otherwise would be dishonest.

If you need someone physically present in your office every day, handling things that require being in the room, signing for deliveries, running a front desk that clients walk into, then an outsourced telephone and administration service does not replace that. It might complement it, but it does not replace it.

If your administration is highly specialist, tied to a specific system or process that requires weeks of intensive training unique to your business, the economics of an outsourced arrangement may be harder to make work, though the better outsourced services will invest in learning your business in detail. We do. But it is an honest caveat.

If you are genuinely growing fast and your volume of work is high and consistent enough to justify a full-time salary at the rate of utilisation you actually need, then the arithmetic starts to shift. At very high, sustained call volumes and complex administration loads, a dedicated internal hire may well be more cost-effective. The honest answer is that a proper conversation about your specific situation will tell you faster than any general article.

The Question You Actually Need to Answer

The numbers above are not precise for your business. Your hire may be on £24,000 or £32,000. Your sector may carry higher or lower recruitment costs. Your volume of calls may be twenty a day or two hundred.

But the structure of the comparison holds regardless of those specifics. A direct hire in 2026 carries fixed costs that are higher than they were three years ago, compliance obligations that are more complex than they were three years ago, and a dismissal risk profile that is materially different from what it will be in six months' time. An outsourced Business Assistant arrangement carries a different cost structure, a different set of risks, and a different set of limitations.

The question is not whether outsourcing is cheaper in every case. It is whether you have actually done this arithmetic rather than assumed the answer. Most business owners have not. They took on a hire because it felt like the obvious next step, and they have never quite worked out what the full number is.

If you would like to have that conversation properly, with someone who will tell you honestly whether our service fits your situation rather than whether we can sign you up, call us on 020 3303 3303 or take a look at our Business Assistant service page.