What the Employment Rights Act tells us about how the workplace has changed

On the 1st January 2027, things are going to change. The Employment Rights Act will kick in unfair dismissal protection for employees after six months, rather than two years. So if anyone's joined your organisation this summer, this will affect you. It's something worth knowing.

There's a whole load of things in the act. Some have already landed: day-one paternity leave and unpaid parental leave came in back in April. Others are still coming, like the changes to employment tribunal time limits and harassment duties this October. You can explore more here. But what we think is most interesting is how this reflects on the changing world of work more generally.

This is the law catching up with a labour market that's seen an incredible shift in the last few decades. The signs have all been there: a typical stint now measured in a few years rather than decades, a changing relationship between employee-and-employer, a big shake-up to the expectations we have of the workplace. So this legislation is a lagging indicator.

The law has caught up. Recognition programmes haven't

You can't expect employees to feel #blessed for the mere fact that you've employed them. Not anymore. Yes, even in as uncertain times as these. Because there's been a hierarchical shift in whether people feel they're working for their employers, or whether their employers are working for them. That means no-one is sticking around for decades because "loyalty".

But so many companies think of long service awards, when they think of key recognition moments. And a long service award does a real job, just a different one: it thanks someone for the years behind them, rather than shaping how the next few go. It's not an incentive to stay. It's a statement that you are owed recognition after you've done the hard yard.

But people don't stay in jobs for decades anymore. And the law does not only protect and reward those after an arbitrary amount of tenure. Things need to change.

Why recognition needs to be about the now

In our recent data, we saw that only 8% of people recognised weekly are demotivated. That's a tiny proportion. Comparatively, that soars to 95% for those who are never recognised. If you're waiting until the 10-year-mark to say good job, no-one is going to get there.

Look at one of our customers: when Octopus Energy started working with us, 80% of one of their teams were under six months' tenure. How do you make such a new team feel motivated, feel engaged, feel energised, when there's no "this is what you get for sticking around" example? The answer is recognising people for the little things, in the moment.

From our survey, we also saw a strong association between frequent recognition and a positive manager relationship. Of the people who rate that relationship as very good, 80% are recognised at least a few times a month. Where the relationship is poor, that drops to 5%. We can't tell you which way round it works, and honestly, a manager who says "nice one!" often is probably a manager you'd rate highly anyway. But the two travel together, and where both are in place only 6% of people are demotivated.

We're not saying that recognition = retention

Obviously, there's more to retaining staff than recognition. You need meaningful work. You need a good manager relationship. You, most obviously, need a fair salary. Recognition is just the cherry, the icing, the sprinkles, the extra sweetness on top.

But it's also indicative of a culture where people want to stay around. And the way you handle recognition betrays a lot about whether you're approaching today's workforce in the right way - like the law is starting to, like it's a journey rather than a done deal.

So what can organisations do to reflect the changing labour market? They can see if they're getting the ratio right, when it comes to their recognition ratio. How much budget and effort is focused on long service, versus the little pick-me-ups and "way to gos" that keep a less tenured workforce performing and growing? Is the balance right? Where are you seeing attrition, and is it related?

The takeaway

The world of work has changed. And it continues to change. That means no part of our people strategy can stay static, or committed to the old ways of doing things. Everything has to adjust for a workforce that changes roles repeatedly, that doesn't see a job as a life sentence. For workers who want to feel valued from the moment they're hired, because that's when they start adding value to the organisation. And consistent, regular recognition is going to be a key part of that.

If you're looking at your own ratio and want the small, frequent stuff to be easier to actually send, that's the bit we help with. Recipients choose their own gift, there's no address to collect, and you only pay for the gifts you send. See how it works.