HR update: What’s coming in 2026 and why busy SMEs should care now
Written by Paul Palmer from Coppice HR
Most SMEs don’t struggle with HR because they don’t care.
They struggle because they’re busy.
When you’re focused on clients, cash flow, and keeping the business moving, HR tends to sit quietly in the background. It works well enough until something makes it unavoidable.
That “something” is rarely dramatic. It’s usually practical. A sickness issue. A leave request. A performance conversation that suddenly feels harder than expected.
The questions that trigger HR headaches
HR rarely shows up as a big issue straight away. It usually starts as a question someone hasn’t had to ask before.
Questions like:
- How do I handle time off for dependants properly?
- How much bereavement leave is reasonable?
- How do I manage sickness absence without damaging the culture we’ve built?
- What do I do if an employee’s second job is affecting their performance?
- How important are policies when dealing with employee issues?
These are the questions I’m asked most often. Not because employers want to be difficult, but because they’re trying to be fair and consistent without overcomplicating things.
Without clear guidance, every situation feels like a judgement call.
Related reading: Is HR Draining You? Here’s How to Fix It
Where SMEs feel the pressure most
When employment law changes are discussed, it can sound like it’s all about big reform.
In reality, pressure shows up in very familiar areas:
- absence and sickness patterns
- dependants and family leave
- bereavement and what feels “reasonable”
- performance issues handled informally for too long
- second jobs affecting output
These are normal situations. They’re not signs of a problem business. The difference is whether there’s clarity behind decisions or whether you’re making it up as you go.
You may also like: The Quiet Recruitment Mistakes That Cost More Than You Think
What’s changing in the background (direction, not dates)
There’s a lot of noise around future employment law, and I understand why that feels overwhelming, especially for SMEs without in-house HR.
What matters most isn’t predicting exact outcomes. It’s understanding the direction of travel.
Proposals and consultations point towards tighter expectations around everyday people issues. Sick pay, family leave, absence, and performance management are all under more scrutiny, alongside a stronger focus on clarity and documentation.
When businesses already have clear processes in place, these shifts feel far less disruptive.
Related reading: Are Your HR Procedures & Policies Up to Date? Check Your HR Compliance in Under 5 Min
Why issues build before they escalate
HR problems rarely appear overnight.
More often, they build quietly. A few odd sickness days become a pattern. A performance dip gets brushed off. A manager avoids a conversation to keep the peace.
None of this is unusual in small teams. But over time, inconsistency becomes visible, questions repeat, and I’ve seen issues surface at the worst possible moments.
At that point, it’s usually not the issue that causes the stress; it’s the uncertainty around how to handle it.
Related: 5 Reasons Employees Leave Their Jobs and How You Can Prevent It
Reactive HR vs calm, confident handling
|
When HR Is Reactive |
When HR Is Clear |
|
Absence handled case by case |
Clear absence framework |
|
Uncertainty around leave |
Simple guidance in place |
|
Managers guessing |
Managers supported |
|
Decisions feel risky |
Decisions feel defensible |
|
Culture feels fragile |
Culture feels protected |
Most businesses don’t need more HR. They need fewer grey areas.
Further insight: Are Your HR Procedures & Policies Up to Date? Check Your HR Compliance in Under 5 Min
Small changes that make everyday HR easier
You don’t need an overhaul. Most SMEs just need a reset.
What usually helps most:
- Review how sickness absence is tracked and discussed
- Sense-check dependants and bereavement leave arrangements
- Clarify expectations around second jobs
- Make sure key policies actually support decision-making
The aim isn’t rigidity. It’s removing unnecessary stress.
Helpful read: A Culture of Prevention: 3 Steps UK Employers Must Take
Why the right support makes HR easier
Most SMEs I speak to don’t want to spend time thinking about HR. They want to run their business.
The right support brings clarity, confidence, and consistency. It helps managers deal with issues early and properly, rather than letting them drift.
That’s when HR stops draining time and starts protecting it.
Frequently asked questions
Do I really need policies for things like bereavement and dependants leave?
Yes. They don’t need to be complex, but they make decisions easier and fairer.
How do I manage sickness absence without damaging morale?
By being consistent, supportive, and clear about expectations.
What if an employee’s second job is affecting performance?
It needs addressing properly, supported by clear contracts and policies.
Can Coppice HR help review these areas?
Yes. This is exactly the kind of support many SMEs ask for.
Clarity beats firefighting
HR doesn’t need to be complicated.
Most issues become difficult because they’re unclear, not because they’re rare. Clear policies, sensible processes, and the right support make everyday HR far easier to manage.
If you’d like support reviewing your HR setup or sense-checking how you handle these situations, I can help you.
Email [email protected] or call 07814 008478 to talk it through.