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UK Edition
13th January 2025
 
THE HOT STORY
Apprenticeships are down a third in a decade
Apprenticeships in the UK have seen a significant decline, dropping by nearly a third over the past decade. The government's introduction of a levy on businesses aimed at promoting training has failed to reverse this trend, with a 14% decrease at large firms alone. The Chartered Institute of Personnel and Development reports that fewer employers are providing training, despite a doubling of skill shortage vacancies. Analysis by the Social Market Foundation also suggests that many companies are using the £2.5bn fund to train existing executives rather than creating opportunities for young people.
HIRING
City vacancies slump
New data shows that there has been a significant decline in job opportunities within the City, with financial services vacancies dropping to their lowest level since 2020. According to a survey by Morgan McKinley, only 3,664 job openings were posted between October and December 2024, down from 4,483 in the previous quarter. Mark Astbury from Morgan McKinley commented: "These stark figures paint a sobering picture of an industry grappling with mounting challenges."
UK companies plan to invest in AI instead of hiring staff as costs rise
Half of UK businesses plan to prioritise investment in artificial intelligence over hiring because of chancellor Rachel Reeves’ decision to increase employers’ tax bills, according to a new poll.
WORKFORCE
Poor service costs firms £7.3bn a month
Analysis of the UK Customer Satisfaction Index shows that poor service is costing British business £7.3bn a month. The report suggests that 69% of workers deal with failings in service, with employees devoting an average of four days to troubleshooting. This means that service failings cost £87.6bn in wages each year. Jo Causon, chief executive of the Institute of Customer Services, said: “Service failures are costing billions every month in employees' time and subsequent lost revenue.”
Just 156 BoE staff want to move to Leeds
Just 156 Bank of England employees have expressed an interest in relocating to Leeds, despite the central bank looking to increasing its headcount in the Yorkshire city to at least 500 by 2027. The bank, which had almost 5,400 employees last year, plans to maintain its overall headcount while expanding its presence in Leeds.
REMOTE WORKING
WPP faces staff revolt over office policy
FTSE 100 advertising firm WPP is facing a revolt after demanding that staff return to the office. A petition calling on chief executive Mark Read to revoke the policy has secured more than 5,000 signatures. From April, staff will be required to spend an average of four days a week in the office. A spokesman for WPP said: “We believe this is the right policy for the long-term interests of the company as a whole, knowing that it won’t be popular with everyone.” The spokesman added that the firm “will take the time to implement it in a collaborative and pragmatic way with our teams.”
STRATEGY
Private sector to help ministers attack 'waste and inefficiency'
The Chancellor is reportedly planning measures that will reduce “waste and inefficiency.” Darren Jones, Chief Secretary to the Treasury, has said officials will work with the private sector to “embrace ideas, expertise and innovation” in a bid to cut unnecessary spending. He says experts from outside government will be brought in to offer perspective on how taxpayer's money is being spent and how to best use it. Writing in the Sunday Telegraph, Jones said: “This will take hard work, difficult decisions, and a ground-up approach which interrogates every single line of government spending.” Saying that ministers are “bringing the private sector right into the heart of government and the Spending Review,” he warned: “Echo chambers of the same ideas and ideologies when it comes to spending will only ever get to the same end result.”
Asda shake-up sees 13 managers axed
Allan Leighton, chairman of Asda, has initiated significant cost-cutting measures, including the dismissal of 13 regional managers, as part of a restructuring plan designed to enhance performance. The move follows a challenging festive season, with sales falling by 5.8% in the 12 weeks leading to December 29. The restructuring will consolidate management across 22 sub-regions, down from 30. Leighton says he aims to "restore Asda's DNA" by reducing prices and improving product availability, although he cautioned that recovery could take up to five years. In a memo to staff, Asda's management said: "Change is never easy and unfortunately we have had to say goodbye to a number of colleagues." 
REMUNERATION
Academy chair calls for pay boost for STEM graduate teachers
Sir Dan Moynihan, the chair of the Harris Federation, one of the country's largest academy trusts, has called for salaries to be increased for teachers with degrees in STEM subjects, in order to be more competitive with private sector employers amid a recruitment crisis in subjects including physics and computing. Mr Moynihan said that with many pupils being taught maths, physics, and other STEM subjects by non-specialists, the solution "is for there to be a general rise in teachers' salaries across the board to recover the real-terms loss since 2010. In addition, graduates with good degrees in maths, computing and sciences can earn far more outside teaching, so teachers in these specialist subjects should be paid far more to encourage them to enter the profession."
UK-US boardroom pay gap widens
Research shows that the pay gap between the boardrooms of financial services companies in the UK and the US has widened. Non-executives at North American financial businesses earned an average of $334,707 per director in 2023. This is 26% more than the $266,368 paid to their counterparts in the UK. This compares to a 12% gap seen in 2019, when the average in the US was $302,814 and the UK average was $269,802. The research also found that the gender pay gap in UK financial services boardrooms narrowed between 2019 and 2023, from 30% to 25%. Pay for female non-execs rose 7% to $225,275 over the period, while their male counterparts saw average pay fall by 1% to $299,076.
Lloyds bonus could depend on attendance
Senior bankers at Lloyds could see their bonuses reduced if they do not adhere to the company's requirement of being in the office at least two days a week. Lloyds Banking Group, which includes Halifax and Bank of Scotland, is evaluating office attendance as part of performance-related bonus targets. Additionally, Lloyds has introduced a new bonus scheme that allows 33,000 lower-paid staff to receive larger payouts based on performance.
DIVERSITY, EQUITY & INCLUSION
Apple stands firm on diversity policies
Apple's board has urged shareholders to reject a proposal from the National Center for Public Policy Research to eliminate its diversity, equity, and inclusion (DEI) programmes. The board, including CEO Tim Cook, said: "The proposal is unnecessary as Apple already has a well-established compliance program," saying that it would restrict the company's operational management. The board said the tech giant "is an equal opportunity employer and does not discriminate in recruiting, hiring, training, or promoting on any basis protected by law." Apple added that the proposal "inappropriately attempts to restrict Apple's ability to manage its own ordinary business operations, people and teams, and business strategies," and accuses the think-tank of trying to "micromanage" the company.
LEGAL
Civil servants win gender policy battle
Civil servants will no longer be labelled ‘transphobic' for expressing gender-critical views. The move comes after Eleanor Frances, a former civil servant, successfully settled a case against the Department for Culture, Media and Sport and the Department for Science, Innovation and Technology for £116,749 after claiming she faced backlash for her gender-critical views. Following her employment tribunal, the departments have agreed to amend their gender assignment policies. The review will be shared with other government departments, aiming to balance the rights of staff with various protected characteristics. Peter Daly, from Doyle Clayton, noted that the case could have been resolved much earlier, and highlighted what he said was the need for a rethink in how the civil service handles such disputes.
Small firms are taking a more benevolent approach, lawyer says
With an increasing number of small business leaders reviewing maternity and paternity leave policies to create an inclusive working environment and improve staff recruitment and retention, Nick Pritchett, an employment lawyer at LegalEdge, says: "It's becoming more commonplace for smaller businesses to implement enhanced policies typically associated with bigger corporates." He adds: "Competing for talent, and then retaining it, is certainly key to the business case, but I increasingly see smaller businesses placing more emphasis on this benevolent approach as an intrinsic part of their culture. They want to 'do the right thing' for their staff."
INTERNATIONAL
Inside the Chinese factories fuelling Shein's success
The BBC's Laura Bicker visits Guangzhou's Panyu neighbourhood, also known as 'Shein village' because of the dense network of factories supplying the company. The BBC's investigation, including visits to 10 factories and interviews with more than 20 workers, revealed that employees routinely work around 75 hours weekly, in contravention of Chinese labour laws. The Swiss advocacy group Public Eye corroborated these findings, noting excessive overtime and a basic wage of 2,400 yuan ($327), far below the 6,512 yuan deemed a living wage by the Asia Floor Wage Alliance. However, some workers reported monthly earnings of 4,000 to 10,000 yuan due to overtime. Shein's meteoric rise has been marred by allegations of forced labour and poor worker conditions. The company declined an interview but stated its commitment to “fair and dignified treatment of all workers” and its investment in governance and compliance. Sheng Lu, a professor of Fashion and Apparel Studies at the University of Delaware, noted that Shein is making efforts to monitor suppliers amid plans for a public listing on the London Stock Exchange. He stated: "If Shein can successfully achieve an IPO, then it means they are recognised as a decent company. But if they are to keep the confidence of investors, they have to take some responsibility."
 


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