Employment reforms worsen procurement communication

With businesses across the UK beginning to react and adjust to the implications of the Employment Rights Act 2025 reforms, much of the focus has been on hiring slowdowns, and team shrinkages. With so much uncertainty around the new obligations and when they will take effect, it’s a situation where we can expect an increase in internal workplace conflict across industries. 

 

But for procurement professionals, there may be an even greater risk in how these pressures play out across supplier relationships, where even small communication gaps can quickly escalate into commercial disputes.

 

 

Procurement’s communication challenge

Resolutiion’s recently published Global Conflict and Dispute Resolution Industry Report 2026 reflects the opinions of procurement professionals from both public and private sector. It shows that the number one leading cause of commercial disputes right now is poor communication and misaligned expectations. Both of these triggers come before more traditional concerns such as performance failures, cost disputes and contract ambiguity.

 

The report also shows a clear skills gap around communication and emotional intelligence, with respondents citing a lack of listening, empathy and constructive communication as the main reasons why disputes are not resolved effectively. What this tells us is that emotional control, trust-building and the ability to reframe issues collaboratively are becoming critical procurement skills - yet, currently, they’re the ones least developed.

 

 

Additional pressure on procurement professionals

If we add in additional pressures introduced by the new reforms, it’s easy to see why there’s a risk of intensifying an already fragile situation.

 

Part of the reason for this is down to how the reforms are likely to affect supplier relationships. Across this year and next, the legislation will be implemented in phases; employment rights will expand and supplier cost bases will move.

 

This change will affect contract pricing, indexation pressure and margin-protection behaviours, which could see procurement teams face a faster cadence of rate reviews, more variation requests tied to labour assumptions and more claims-style behaviour in statement-of-work services.

 

Early on, we’re also likely to see a rise in union activity, which may mean supplier delivery risk in outsourced operations, more frequent contingency planning requirements and higher scrutiny of workforce practices in the supply chain.

 

Finally, procurement is particularly exposed to conflict simply because it sits where hiring meets resourcing constraints, which includes internal team capacity and supplier workforces delivering critical services. Disputes can even arise even when underlying performance isn’t the root cause.

 

And, back to the fact that procurement teams are not starting from a position of strength on communication, those same communication gaps identified in the report - lack of listening, empathy and alignment - are all likely to widen as the reforms play out.

 

 

How to improve communication under pressure

In this context, the reforms don’t create new problems so much as amplify existing ones as teams come under increased pressure; a situation that’s both predictable and preventable with the right interventions.

 

First up is using technology, data, systems and processes to your advantage. For example, embedding structured workflows - clear escalation pathways, defined ownership of disputes and step-by-step resolution processes - can all help give teams the confidence to intervene early rather than avoid difficult conversations.

 

Data is also key. When it comes to data collection around conflicts, make sure it gets used effectively, by which I mean focus on learning rather than blame - it will allow teams to identify patterns, improve decision-making and strengthen relationships over time.

 

AI-powered technology can also help across the board. For instance, it can create a single, structured source of truth for commercial relationships, which removes any ambiguity around key commercial documents, delivery expectations or change requests.

 

And the good news is that the procurement community is very open to innovation in this space. In fact, more than three-quarters of respondents to our research said they were willing to use AI-enabled tools and digital guidance to detect early warning signs of disputes, structure interventions and benchmark performance.

 

 

‘Soft’ skills and commercial outcomes

However, tech and tools alone are not enough. Organisations must also foster psychological safety where early dialogue is expected. With this in mind, create a culture and space where surfacing issues early - before they harden into disputes - is a sign of strength, not weakness.

 

The widening skills gap must also be addressed. Success in resolution depends less on technical expertise and more on behavioural capability at an individual level. As such, teams should train for the skills the data proves matter most, whether that’s listening and clear communication, calmness under pressure or framing difficult issues without defensiveness.

 

The goal overall is focused on two things. One, to stop thinking of these as ‘soft’ skills, rather as core capabilities that can directly influence commercial outcomes. And two, to move procurement away from treating disputes as isolated incidents handled through ad hoc intervention, and more towards designing communication, systems and behaviours that help prevent them from escalating in the first place.

 

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Fayola-Maria Jack is Founder of Resolutiion, a human-centred global AI platform, purpose-built to help buyers and suppliers prevent, manage, and resolve commercial conflicts and disputes, with speed and precision

 

Main image courtesy of iStockPhoto.com and Supatman