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15th August 2022
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THE HOT STORY
Salaries rising as firms struggle to find staff
The Chartered Institute of Personnel and Development (CIPD) believes the UK’s hiring boom will soon reach its peak. The institute’s latest quarterly Labour Market Outlook says the labour market remains “incredibly tight,” with many firms raising wages and offering applicants more flexible options. Private sector pay expectations have hit a record high of 4%, while the median across all sectors stands at 3%. The survey of 2,000 senior HR staff found that 72% expect to recruit in the next three months, while 13% expect to make redundancies. Jonathan Boys, the CIPD’s labour market economist, said: “We’re seeing some of the highest pay awards in recent history as employers strive to attract and retain staff. However, strong pay growth can’t last forever.”
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REMUNERATION
Preparation and timing key when negotiating a pay rise
Preparation and timing are key for employees when trying to negotiate a pay rise, according to James Reed, chairman of Reed. Pointing to Reed research which found that 70% of people believe salary negotiation should be taught during their education, he said: “Whether it’s with a current or prospective employer, the ability to negotiate a salary increase is an essential skill that should be in everyone’s toolkit.” He advises those seeking a higher wage to arrange one-to-one time with their manager to discuss their performance; to make preparations, such as considering recent achievements and the knowledge and the experience they bring to the role, and link this to their request for a pay rise; and try to time the request correctly by staying attuned to the stability of the sector.
BoE staff land £23m in bonuses
Nine in 10 Bank of England staff were handed bonuses last year, with payouts totalling more than £23m. The bonus pot was at its highest level for at least two years, with more than 4,260 employees receiving performance awards. In total, Bank employees were handed £23,325,265 in 2021/22. This was up from £22,080,732 the previous year. Bank officials say the discretionary award budget has been 10% of the total salary bill in the past two financial years, but the number of its employees has increased. Average payouts per person fell from £5,560 in 2020/21 to £5,471 in 2021/22. Bank governor Andrew Bailey drew criticism earlier this year after suggesting British workers should not to ask for high pay rises because inflation had to be kept under control.
REGULATION
Final salary pension reform could be a ‘straitjacket’
Raj Mody, global head of pensions consulting at PwC, says UK government plans to ramp up scrutiny of final salary pension scheme funding could be a “straitjacket” for the industry. The Department for Work and Pensions is consulting on plans to increase scrutiny of defined benefit schemes’ funding and investment strategies and require them to submit plans to The Pensions Regulator. Mr Mody warned that this is “a straitjacket for pension schemes,” adding that it is “one size fits all in terms of features of what the end target should look like.” He warned that rather than unlock funding from the schemes, the increased scrutiny could lead to more cash being locked up in pensions, noting that pension schemes are likely to end up with funds surplus to requirements. In an interview with the FT, Sarah Smart, the chair of The Pensions Regulator, says reforms to pension rules will mean some UK employers will have to clear scheme deficits faster than currently scheduled.
HYBRID WORKING
FCA staff in WFH call
Financial Conduct Authority (FCA) staff have told bosses that two days a week in the office is the most they can manage, and have warned that any changes to the watchdog’s hybrid working policy could prove damaging during the cost of living crisis, pointing to the cost of commuting. Members of the FCA’s ‘staff consultative committee’ raised the concerns at a meeting of the regulator’s board at the end of June, when the City watchdog was trialling a policy that required staff to work from the office twice a week. The FCA has since established a permanent requirement for staff to work from the office for 40% of the time over a month, or two days a week on average. The Sunday Telegraph highlights that while many businesses are still allowing staff to work remotely for much of the week, an increasing number of City firms are urging employees to return to the office on a more permanent basis.
Staff only in offices 1.5 days a week
UK workers are going into the office an average of just 1.5 days a week, with only 13% coming in on a Friday, research from consultancy Advanced Workplace Associates (AWA) shows. Analysis of 43 offices representing nearly 50,000 people in June and July found that average attendance was just 29%, with a peak of 39% mid-week. Internationally, analysis of 80 offices in 13 countries representing 80,000 employees shows workers are travelling to the office on an average of 1.4 days a week, with attendance on Fridays dropping to 12%. Two-thirds of desks are unused on an average day. Andrew Mawson of AWA said: “What this survey shows is that as a result of changes due to the pandemic the hybrid-working genie is out of the bottle.”
HIRING
PwC scraps 2:1 entry requirement for graduates
PwC will start recruiting graduates who missed out on a 2:1 at university in a move intended to “further diversify its graduate intake through broader access to talented young people, who may not have the top academic achievements but have the attributes and all round proven capabilities for a career with the firm.” Analysis suggests the move could unlock a graduate pool of over 70,000 extra students a year. Ian Elliott, chief people officer at PwC, said: “Whilst academic achievement has its place, for far too many students there are other factors that influence results.” KPMG and Deloitte still require university leavers to have achieved at least a 2:1 to be considered for their graduate roles, while EY has scrapped the threshold, saying it would “be flexible” with people who achieve a lower grade.
Brexit contributes to UK staff shortages
Brexit has intensified labour shortages in the UK over the past year, according to Oxford academics and ReWage, a group of independent experts. The analysis suggests that the hospitality and lower-skilled sectors were worst hit by the end of free movement of EU citizens into the UK. The report says that while Brexit "exacerbated" chronic labour shortages in Britain, the pandemic, early retirement among the over-50s, high employment levels across Europe and international labour shortages were also contributing factors. Data show that just 43,000 EU citizens received visas for work, family, study or other purposes in 2021, far below the 230,000 to 430,000 EU citizens coming to the UK annually in the six years to March 2020, according to Office for National Statistics estimates.
WORKFORCE
Amazon gets tough on striking workers
Amazon is attempting to crack down on workers protesting over below-inflation pay rises. Up to 1,500 workers staged a walkout at Amazon’s distribution centre at Tilbury in Essex this month after the company unveiled pay rises of 35p an hour. Amazon has now diverted orders to other facilities deemed less vulnerable to disruption amid fears workers would protest again. Amazon has also been encouraging workers to sign up to internal staff forums rather than join a union. The company said that the forums, which are chaired by Amazon employees, were the fastest and easiest way for workers to be heard. Elsewhere, Harrods wrote to staff last week warning that it was able to bring in temporary agency workers in the event they went on strike over the retailer’s offer of a pay rise of as little as 5%. Harrods said calling in temporary workers was not its preferred course of action, but it was vital that the department store continued to provide “exceptional” customer service. The company is believed to be the first known employer to take advantage of new legislation, which the government claimed would help ensure “crucial public services” remain uninterrupted by staff strikes when it was introduced last month.
Indonesian workers on UK farm ‘at risk of debt bondage'
An investigation by the Guardian has found that Indonesian labourers picking berries on a farm that supplies Marks & Spencer, Waitrose, Sainsbury’s and Tesco have been saddled with debts of up to £5,000 by unlicensed foreign brokers to work in Britain for a single season. Pickers at the farm in Kent were initially given zero-hours contracts, and at least one was paid less than £300 a week after the cost of using a caravan was deducted, according to the findings. The Home Office and the Gangmasters and Labour Abuse Authority (GLAA) are looking into the allegations, and the supermarkets have launched an urgent investigation into the issues raised.
INTERNATIONAL
Europe’s meal couriers sweat amid heatwave
Couriers who are getting lunches and dinners to customers amid a heatwave in Europe typically don’t enjoy labour practices such as offering workers cold water, shade and extra paid breaks. Many of the workers in the meals delivery market are on freelance contracts and so such measures are not universally adopted or enforced. Glovo, Uber and Deliveroo follow a model whereby couriers are considered to be self-employed. Just Eat Takeaway, the largest European meals company, employs its own couriers in most markets. In a response to questions from Reuters, Glovo parent Delivery Hero said its "riders have the freedom to choose their shifts, can request a break at any time, and receive appropriate equipment for the season." The European Trade Union Confederation has renewed its call for the setting of a maximum working temperature - none currently exists. "It's surprising how few nations have rules," observed Juanita Constible of the Natural Resources Defense Council (NRDC), an international environmental advocacy group. "I'm hopeful that as countries are grappling with what it means to live in a warmer world, they'll pay more attention to what workers need."
Spain wants workers From Latin America
The Spanish government has relaxed rules to allow the recruitment of workers in other countries, mostly in Latin America, for both skilled and unskilled jobs that are hard to fill. Spain’s population will shrink by a third by the end of the century — and the situation is even worse without migration. “An aging population means you will have to depend more on foreign workers to help European countries maintain welfare states and pensions,” Social Security and Migration Minister Jose Luis Escriva, the architect of the reform, said.  “It is more of a medium-term problem, but this measure is designed with that horizon in mind.” Andreu Domingo, deputy head of the Barcelona-based Centre for Demographic Studies, nevertheless cautioned: “These measures are a good step, but they don’t address the real problem . . . It doesn’t change an economic structure based on low productivity with low wages that will lead to a constant demand for low-skilled workers.”
Meditation app Calm lays off 20% of staff
San Francisco-based meditation and wellness app Calm has laid off 20% of its staff, according to a memo delivered by CEO David Ko to employees. Calm employed roughly 400 people, and approximately 90 were laid off, according to people familiar with the matter. “Regrettably, today we are reducing our overall workforce by 20%,” Ko's memo said. “While some of you will be impacted, all of you will be affected. I can assure you that this was not an easy decision, but it is especially difficult for a company like ours whose mission is focused on workplace mental health and wellness.” One staffer who was laid off said company leadership cited macroeconomic trends in explaining the cuts.
OTHER
Only fools work in August
The FT’s Pilita Clark laments the end of her usual plan to WTA, or Work Through August, “a month when you can get on with loads of paperwork and catch-ups without distraction.”
 


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