The Higher Education sector is entering a new era of risk. A negative employment outlook, reduced funding, rising employment costs and a more litigious landscape are creating a perfect storm for people teams across the sector. That pressure is only being intensified by legislative reform. With the Employment Rights Act (ERA) now in force and further reforms coming throughout 2026 and 2027, the consequences of getting employee relations decisions wrong are increasing, financially and reputationally.
Managing that level of complexity and exposure requires a fundamental shift in how people matters are handled, and this isn’t a time to brace for impact. Many employee relations operating models weren’t built for this level of scrutiny, and the impact is already being felt across the workforce. HE leaders need to act now to reduce risk.
The workforce pressure is already building
Redundancies in higher education have been rising sharply, driven by declining international student numbers, constrained public funding, and the compounding effect of increased employer National Insurance contributions. In the past three years, 30,000 jobs have been lost, including more than 13,000 in the 2024-25 period, according to a report in the Times, amounting to around 6% of the total employed in the sector.
Sector analysis now shows more institutions anticipating workforce reductions than growth. Recent reports from Universities UK show that 79% of universities are pursuing voluntary redundancies, and 79% implemented hiring freezes or pauses to recruitment over the last three years.
At the same time, ER caseloads are growing in complexity. AI-generated grievances are an increasingly real phenomenon, with employees using AI tools to draft formal complaints that are more detailed, more legally structured – if not legally sound – and harder to resolve informally than traditional cases. This is placing new demands on already stretched people teams.
As that complexity increases, so does the pressure on managers to respond effectively. With limited capacity, inconsistent training and varying levels of confidence, many managers are stepping into people management roles without the depth of experience or support needed to handle sensitive issues consistently. As a result, issues are often managed in ways that create legal risk through gaps in process and knowledge, rather than bad intent, and this is a risk that becomes more significant in the new litigious era.
What the Employment Rights Act changes for HE
The Employment Rights Act introduces reforms that are likely to have a significant impact on higher education, particularly given the sector’s workforce profile, financial pressures and history of industrial action. This includes:
- Greater risk in workforce restructuring: The protective award for failing to meet collective consultation obligations is doubling, increasing the financial exposure associated with large-scale redundancy programmes.
- Earlier and longer-running employment claims: From 2027, employees will be able to bring unfair dismissal claims after six months’ service rather than two years. The tribunal claim window is also expected to increase from three to six months from late 2026, extending the period during which institutions may face legal challenge.
- New obligations for casual and flexible workers: Associate lecturers, invigilators and casual event staff holding “worker” status will gain the right to guaranteed contracts that reflect their regular working patterns after a qualifying reference period. Institutions may also need to compensate eligible workers when shifts are cancelled or cut short at short notice, creating significant new monitoring and administrative requirements ahead of implementation.
- Stronger duties to prevent harassment: Employers will be required to take all reasonable steps to prevent harassment, while liability will extend to harassment by third parties, including students. For a sector with a large public-facing community, this represents a significant expansion of risk-management responsibilities.
- A changing industrial relations landscape: Trade union reforms will remove the 50% ballot turnout threshold and shorten strike notice periods, making industrial action easier to organise in a period when sector-wide tensions around pay, workload and conditions remain unresolved.
These changes increase legal risk, administrative complexity and the demands placed on managers, HR teams and institutional leadership. For a detailed look at how these changes are shaping the people and risk agenda in higher education – and a practical framework for responding – download our latest eBook.
At a time when many universities are already balancing financial pressures, workforce change and heightened employee relations activity, the challenge is how to respond consistently and at scale without increasing risk, cost or inconsistency. For many institutions, that pressure is already exposing the limits of the current HR operating model.
The existing HR operating model can’t keep up
For many higher education institutions, employee relations activity is becoming more frequent, more complex and more resource intensive. At the same time, HR teams are being asked to do more with less, while managers are expected to take greater ownership of people issues.
The institutions best positioned for what’s coming next are moving towards a more integrated approach to employee relations – a combination of expert outsourced advice, structured case management, legally compliant processes and workforce insight within a single operating model.
This creates consistency for managers, greater visibility for HR and a clearer audit trail when decisions are challenged. It also frees HR teams from spending disproportionate time on lower priority matters, allowing them to focus on workforce planning, organisational change and strategic priorities.
In a sector facing ongoing financial pressures, the ability to manage employee relations efficiently, consistently and at scale is becoming a critical capability rather than an operational nice-to-have. That capability starts with managers.
The manager capability question
Legislation isn’t the only thing that creates additional risk. It also emerges when managers are expected to navigate increasingly complex people issues without the confidence, support or tools to do so effectively.
Whether it’s managing probation, handling absence, responding to grievances or addressing conduct concerns, managers are often the first line of defence. Yet many receive limited practical guidance beyond policy documents and occasional training sessions.
That’s why leading institutions are placing manager empowerment at the centre of their employee relations strategy. A combination of digital guidance, structured workflows, expert outsourced support and targeted learning helps managers make better decisions in the moment.
When managers are equipped to handle issues earlier and more effectively, cases are less likely to escalate, employee experiences improve and HR teams spend less time firefighting.
The data generated through these interactions provides valuable insight into emerging workforce challenges. Patterns in absence, grievances, performance concerns and employee wellbeing can be identified earlier, enabling institutions to intervene proactively rather than reactively.
Building a more resilient ER operating model
The institutions that will navigate 2026 and beyond most effectively won’t be those with the largest HR teams. They’ll be the ones that have replaced informal, inconsistent approaches with a coherent, systemic ER model – one that empowers managers, protects the institution and gives HR the headspace to think beyond the immediate.
If transforming your ER operating model ahead of the next academic year is on your institution’s radar, get in touch.
