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19th January 2022
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THE HOT STORY
Unemployment rate in UK falls to 4.1%
Office for National Statistics (ONS) data show that the UK unemployment rate dropped from 4.5% to 4.1% between September and November. The figures reveal that unemployment fell by 184,000, with the number of people on the payroll climbing to 30 million. Analysis shows that the employment rate was estimated at 75.5%, lower than before the pandemic but higher than in the June to August period. Darren Morgan, director of economic statistics at the ONS, noted that the number of employees on payrolls is “now well above pre-pandemic levels.” He added that in the three months to November, the unemployment rate fell to near pre-pandemic levels while the number of people who had recently been made redundant declined to a record low. The ONS report also shows that the number of job vacancies in the three months to December rose to an all-time-high of 1.247m. While the rate of growth in vacancies has been slowing, there are now a record 4.1 openings for every 100 employee jobs. Meanwhile, weekly earnings, excluding bonuses, rose by 3.8% in the three months to November compared to the same period a year earlier. However, the figures revealed a slowdown in growth, with the rate falling short of the 4.3% recorded between August and October. While earnings rose, soaring rates of inflation mean workers suffered a real-terms cut in their pay packets. Inflation hitting a 10-year high of 5.1% in November effectively means workers have seen a 1.6% cut in pay. With pay rises being cancelled out by the cost of living for the first time in a year and a half, Martin Beck, chief economic advisor to the EY Item Club, described the situation as “an unwelcome development which is likely to worsen over the next few months.”
LEGAL
Lawyer's 'intolerable workload caused breakdown'
A lawyer who says "intolerable" workloads caused her to have a mental "meltdown" is suing a City firm for £200,000. Joanna Torode has claimed that working conditions at the London office of Ropes & Gray led to a nervous breakdown that caused her to burst into tears at work and ultimately ended her career. Ms Torode has said in written submissions to the High Court that she has been unable to work since being admitted to hospital in 2018. She is suing the firm, based in the US, for at least £200,000 in damages for the premature end to her legal career. The figure could rise as she is also claiming for the loss of her "substantial" salary.
WORKFORCE
Your Guide to Engaging Hybrid Workforces
As the world emerges from the pandemic, companies everywhere are facing continually evolving restrictions and changes to the workplace. Flexible working and opening up the doors to a hybrid workforce aren't just nice-to-haves, they're must-haves if organisations have any chance of competing in the war for talent. Download this eBook to learn how to navigate the next era of hybrid working to motivate and connect your people.
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REMUNERATION
Unions want pay deal reflective of rising cost of living
The Unite, Unison and GMB trade unions have submitted a joint pay claim to COSLA that is designed to help local government staff with the rising cost of energy prices and inflation. Among other requests, it pushes for a £3,000 pay rise across all salary points and a minimum wage of at least £12 per hour. Proposed terms also involve a no-detriment shift to a 35-hour work week, the payment of all professional fees as a result of employment, agreed guidance on home or hybrid working, and the uprating of all allowances in line with inflation figures from October.
TRAINING & DEVELOPMENT
Skills shortages demand ‘grow your own’ training approach
The FT says the pandemic has given organisations more confidence in the value of virtual training, which can remove the biggest challenge of retraining for employers - accessing resources and funding.
REGULATION
KPMG director fined £150k for misleading FRC inspectors
The Financial Reporting Council (FRC) has published a settlement with KPMG and former audit director Stuart Smith over claims he was responsible for misleading the watchdog during an inspection centred on an audit of data services company Regenersis. Claims against Mr Smith were due to be part of a tribunal which started last week but he has now settled with the FRC, having admitted to misleading the accounting watchdog. Mr Smith will pay a fine of £150,000 and is barred from accountancy for three years. KPMG’s sanction will be determined after the tribunal. 
STRATEGY
Lloyd's of London could leave City HQ
Lloyd's of London is reassessing its office space in a move that could see the world's oldest insurance market leave its iconic City of London headquarters. The suggestion comes amid a shift toward remote and hybrid working driven by the pandemic and the acceleration of a trend towards automation that has seen business increasingly move away from its underwriting floor. The lease on the building, home of the insurance market since 1986, expires in 2031 but Lloyd's could leave in 2026 when there is a break clause.
PURPOSE
BlackRock's Larry Fink wants companies to value more than profits
BlackRock CEO Larry Fink has defended so-called ‘stakeholder capitalism’ in his annual letter to CEOs. The head of the world’s largest asset manager rejected suggestions that an investor focus on the interests of wider society rather than profit is “woke,” writing in his missive, entitled The Power of Capitalism, “It is not a social or ideological agenda . . . It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper.” He urged his fellow CEOs to find a purpose and to take into account issues like climate change as part of stakeholder capitalism. Meanwhile, Fink said that companies can no longer expect employees to come to the office five days a week, neglect workers' mental health and keep wages low for those at the lower end of the income scale. "No relationship has been changed more by the pandemic than the one between employers and employees. CEOs face a profoundly different paradigm than we are used to," he wrote in his closely watched annual communication.
MANAGEMENT
IHG names first female chair
Holiday Inn owner InterContinental Hotels Group (IHG) has announced that Deanna Oppenheimer, a former head of retail banking at Barclays, will become its first female chair when she replaces long-serving chairman Patrick Cescau later this year. Ms Oppenheimer, who currently serves as non-executive chair of Hargreaves Lansdown and is on the board of Thomson Reuters, will take over as non-executive chair at IHG in September.
HIRING
Audit profession has no problem enlisting recruits
A letter to the FT refutes suggestions that audit firms face recruitment challenges, saying university leavers see audit as a secure form of employment and noting the volume of graduate applicants.
Phoenix Group drops 'energetic' from job ads
Phoenix Group is to replace the words "energetic" and "enthusiastic" in its job adverts, saying they put off older applicants. The company, which owns Standard Life, said this was not because people's enthusiasm waned with age; rather, older workers often ruled themselves out of applying if they felt unwanted.
TAX
Super-rich call for tougher tax hit and fairer system
A group of 102 global millionaires and billionaires has called on governments to hit them with heftier taxes to help cover the costs of the pandemic, arguing that the current tax system is rigged in their favour and needs to be rewritten to make taxation fairer. In an open letter, they say: “We know that the current tax system is not fair . . . Most of us can say that, while the world has gone through an immense amount of suffering in the last two years, we have actually seen our wealth rise during the pandemic - yet few if any of us can honestly say that we pay our fair share in taxes." They have called for the introduction of "permanent wealth taxes on the richest to help reduce extreme inequality and raise revenue for sustained, long-term increases in public services.” The group says an annual wealth tax on those with fortunes of more than $5m could raise more than $2.52trn. The proposed tax would see those with more than $5m pay 2%, rising to 3% for those with more than $50m, with a 5% rate for billionaires. Calling for a heavier taxation hit, the super-rich signatories urged: “The world - every country in it - must demand the rich pay their fair share. Tax us, the rich, and tax us now."
INTERNATIONAL
Full recovery of global labour market could take years, ILO says
The International Labour Organization (ILO) has warned that the recovery from the pandemic in the global job market is set to slow this year. The UN agency has forecast that the number of hours worked globally in 2022 would be 1.8% lower than in the fourth quarter of 2019, just before the onset of the pandemic, and there would be an even bigger deficit in working hours in 2022 than it had previously estimated. The ILO’s 2022 World Employment and Social Outlook trends report projects that the decline in global working hours this year would now be the equivalent of losing 52 million full-time jobs, nearly double the 26 million it previously forecast in May 2021. Guy Ryder, ILO director-general, described this “downside readjustment [as] quite considerable.” He said the spread of new Covid variants, such as Delta and Omicron, was among reasons behind the expected slowdown in the labour market recovery, and the ILO expected the recovery to remain weak through 2023.
HSBC splits Hong Kong team to manage Covid risk
HSBC has split its Hong Kong team to different locations to manage quarantine risks amid what the lender sees as a threat to business continuity as the financial hub tightens its Covid policy to contain a fifth wave of infections. “The risk we now face is not merely about being infected by Covid-19, but most importantly being 1st, and 2nd level close contact and being taken to government quarantine for 14 and 4 days,” HSBC wrote in an email to staff. “We are trying to protect staff from this risk and to continually be able to support the business.” The bank has split its global markets division into three. A group of about 190 people are working at its main office on Queen’s Road Central, a team of about 65 people are at an office in Shek Mun, and a third team of about 200 are working from home. Other international banks, including Goldman Sachs and JPMorgan, have also tightened work rules at their Hong Kong offices and moved to split teams.
Indonesia passes law to relocate capital to remote Borneo
Indonesia's parliament has approved a bill to relocate the nation's capital from Jakarta to the province of East Kalimantan on Borneo. The new state capital law, which provides a legal framework for President Joko Widodo's proposal, stipulates how development of the capital will be funded and governed. Indonesia plans to name its new capital Nusantara, which translates as “archipelago”, when government offices are relocated to East Kalimantan from Jakarta, on the island of Java. The government hopes the relocation will ease the burden on Java as the metropolis battles environmental problems.
T Rowe Price’s Bill Stromberg on building the right culture
The FT speaks with Bill Stromberg, the former CEO of Baltimore-based asset manager T Rowe Price, about an “unusual” level of fatigue in the sector that has drawn attention to company culture.
OTHER
Record production at Scotland’s first commercial gold mine
The company behind Scotland's first commercial gold mine has announced “record-breaking” production levels in December. Scotgold’s Cononish gold mine near Tyndrum exceeded the previous all-time high monthly figure by around 60%. The firm said production in the fourth quarter of 2021 totalled 1508 ounces of gold. The miner is targeting a run rate for gold production of around 23,500 ounces per annum by the end of the first quarter of 2023. Scotgold CEO Phil Day said: “The company believes there is significant potential to increase the resource at Cononish, with corresponding increase of life of mine. There are several areas within the Cononish resource that have not yet been adequately tested but are capable of hosting mineable high-grade pods.”

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