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European Edition
28th March 2024
 
THE HOT STORY
Racial tensions cost German businesses skilled foreign labour
Reuters reports on how racial tensions in Germany are costing local businesses skilled foreign labour. Manager Joerg Engelmann says his chemical engineering company in Chemnitz, Germany, has lost skilled foreign workers due to xenophobia. The company is one of several German firms facing difficulty hiring and retaining staff because of anti-immigrant sentiment. Official estimates suggest Germany will be short of seven million skilled workers by 2035. Chemnitz, in eastern Germany, is trying to attract skilled workers but has become a focus of anti-immigrant feelings. The hardening climate extends beyond Chemnitz, with companies in other cities also losing workers due to xenophobia. Germany's economy shrank by 0.3% in 2023, the weakest performance globally among large countries. Discrimination against foreign workers is a problem, according to a survey by the Organization for Economic Cooperation and Development. The city of Chemnitz is increasing funds for anti-racism and pro-democracy projects and plans to address the issue of racism head-on as it prepares to be the European Capital of Culture in 2025.
WORKFORCE
Finnish trade unions extend strikes by a further week
The Central Organisation of Finnish Trade Unions (SAK) has decided to extend the ongoing political strikes until April 7. The strikes, organised by various trade unions, are in protest of labour market reforms and social security cuts proposed by the government. Jarkko Eloranta, the chairperson of SAK, stated that the unions have pleaded with the government for a more just approach, but the government remains focused on goals that are harmful to employees. The strikes have caused disruptions in key export ports, rail freight, fuel delivery services, and production facilities. A survey by Technology Industries revealed that the strikes have led to reduced investments and production moving overseas, potentially resulting in job losses. The strikes will be re-evaluated after Easter, and follow-up actions will be decided upon.
Lufthansa and Verdi reach wage deal, averting strikes
The airline Lufthansa and Verdi labour union have reached a wage deal for ground staff at German airports, averting potential Easter holiday strikes. The union had demanded a 12.5% wage increase for about 25,000 workers, in addition to an inflation compensation bonus of €3,000, while the airline had offered 10%. The details of the deal are expected to be announced on Thursday. Lufthansa's director of human resources, Michael Niggemann, said the airline was satisfied with the "good compromise with substantial wage increases," but warned of future investments. The mediation between the two sides, moderated by state premier Bodo Ramelow and head of the Federal Employment Agency Frank-Jürgen Weise, aimed to prevent strike disruptions over the Easter holiday weekend.
STRATEGY
British businesses trim staffing and wage plans amid minimum wage increase
British businesses have reduced their staffing and wage plans in response to the upcoming increase in the minimum wage, according to a survey conducted by Lloyds Bank which revealed that the measure of staffing plans fell to 27% from the previous month's high of 36%. Additionally, the share of firms expecting to increase wages by 3% or more over the next year also decreased slightly. The impending minimum wage rise is causing concern for businesses, particularly smaller firms, according to the survey. The survey also showed that overall business confidence remained at a net 42%. The introduction of the minimum wage 25 years ago has been hailed as a successful economic policy, with low earners now earning £6,000 more than they would have without the minimum wage. The share of workers on low pay has also decreased significantly, and Britain's minimum wage is now one of the highest among advanced economies.
Vodafone Germany aims to save €400m and cut 2,000 jobs
Vodafone Germany plans to save around €400m ($434.48m) over the next two years through a transformation program that will impact 2,000 jobs. The company aims to reduce personnel costs by implementing automation and relocating jobs. "Personnel costs will be reduced through savings and the relocation of around 2,000 jobs - also because manual tasks will be performed by increased automation in future," Vodafone Germany stated.
HIRING
For young people, the job search has never been so miserable
Margaret Heffernan laments the rise of automated job application processes which she says leave job seekers feeling humiliated and alienated from the world of work before they’ve even started.
TECHNOLOGY
Eight million Brits risk being replaced by AI
Experts warn that up to 8m British workers could lose their jobs to artificial intelligence (AI) within the next five years. A study by the Institute for Public Policy Research (IPPR) found that nearly 60% of current human tasks could be automated. Jobs most at risk include human resources staff, secretaries, call centre agents, salespeople, and authors. Barristers, electricians, plumbers, carpenters, bricklayers, teachers, dentists, and doctors are among the least at risk. The IPPR suggests that the government should tax AI computers and encourage people to pursue jobs less likely to be replaced by AI, such as nursing. The worst-case scenario would result in 7.9m job losses and no economic benefit. Carsten Jung of the IPPR urged employers, unions and ministers to manage AI well to avoid a “jobs apocalypse,” adding: “If they don't act soon, it may be too late.”
TAX
Norway to close loophole for rich
Norway is set to close a tax loophole used by the country's wealthiest individuals who have been leaving the country in large numbers. The government plans to impose an exit tax on unrealised changes in the value of assets for those leaving, which must be paid within 12 years. Previously, this tax could be postponed indefinitely. The move aims to ensure that accumulated values are taxed in Norway and to boost tax revenue. Finance Minister Trygve Slagsvold Vedum stated that this change is fair and important for both the tax system and the community. Additionally, the new rules will limit the exit tax to value changes during the owner's residency in Norway, rather than applying to gains accrued before moving to the country. The crackdown comes as many wealthy Norwegians have migrated to Switzerland and other tax havens due to the government's efforts to increase wealth and dividend taxes.
INTERNATIONAL
More than half of South Korean workers are quietly quitting their jobs, survey says
More than half of South Korea's workers are choosing to do minimal work at their jobs without actually resigning, according to a recent survey. The trend, known as "quiet quitting," involves employees doing the bare minimum requirements of their job and not putting in any extra time or effort. The survey revealed that 57.4% of workers between their eighth and 10th years of work have quietly quit, while 56% of those between their fifth and seventh years have also stopped going above and beyond at work. The leading cause behind quiet quitting is dissatisfaction with salary and benefits, followed by a lack of enthusiasm about working at a company. South Korea's workers have a relatively low level of job and life satisfaction, which may explain why many are choosing to prioritize work-life balance over their jobs.
Boundary between work and life disappears as Chinese workers face 'invisible' overtime
For Jewel Wong from China's southern Guangdong province, the boundary between life and work disappeared during the pandemic when people began to do their jobs from home. The extra demands of managing her company's communications around the clock led to work intruding constantly into her personal life. China's politicians have proposed more legal protections for employees who had to continue work online after office hours — a form of "invisible" overtime. China's labour laws stipulate that employees are entitled to double pay for working overtime on weekends and triple pay for public holidays. However, companies in China often violate labour laws without being held accountable. Younger generations in China are challenging the existing working culture and demanding work-life balance. The government's proposal to address unpaid online overtime is seen as a step towards recognizing the issue. However, structural changes and stronger enforcement of labour laws are needed to protect workers' rights.
Saudi Arabia limits human resources jobs to its citizens
Saudi Arabia has implemented a new phase of its Saudisation policy, which restricts human resources jobs to Saudi nationals. The Ministry of Human Resources and Social Development confirmed that the second phase of the policy, which requires 40% of the overall manpower in consultancy services professions to be Saudi citizens, has taken effect. This follows the first phase of the policy, which stipulated that 35% of employees in these jobs must be Saudis. Saudi Arabia has been launching various initiatives to employ its nationals and replace foreign workers in sectors such as education, telecommunications, and real estate. The aim is to increase citizens' engagement in the labour market. Compliant private sector institutions can benefit from incentives and support programmes offered by the Ministry of Human Resources to help them employ Saudis. The implementation of the Saudisation policy also includes localising engineering jobs and professions in sales, purchases, project management, and the dental profession.
Citigroup division plagued by harassment and drug use, employees claim
Citigroup's equities division has been plagued by a pattern of harassment, discrimination, and drug use, according to interviews with 22 individuals who worked in or closely with the division. The division's toxic culture, which persisted for years, was revealed through a lawsuit filed by a managing director at the bank. The lawsuit exposed instances of sexual harassment, discrimination, and drug use, including a disturbing incident at a client party. Citigroup has responded to the allegations, stating that it values inclusivity and respectful treatment in the workplace. Bloomberg says the revelations highlight the challenges that Wall Street still faces in addressing gender and behaviour issues.
 


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