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27th March 2023
 
THE HOT STORY
Firms struggle to fill gaps in the workforce
Analysis by ManpowerGroup shows that around 80% of UK companies have reported difficulty filling jobs. This is the highest percentage since 2006 and marks an increase on the 35% recorded in pre-pandemic 2019. Michael Stull, director at ManpowerGroup UK, said: “Talent shortages are always an area of concern for employers, but the real step change in our data can be seen post 2019.” He added that employers were "acutely aware of the growing scarcity of key skills, so they're holding on to and trying to stockpile business-critical talent. Just in time hiring does not work anymore, just in case hiring is more the mantra." Meanwhile, KPMG expects the UK unemployment rate to widen to 4.1% this year, from 3.7% in 2022. Yael Selfin, chief economist at KPMG, has flagged skills shortages and slowing workforce participation as two structural issues that “dominate the longer-term risks to the UK outlook.”
LEGAL
Banker fired over sexual harassment sues Barclays
A former Barclays director who was dismissed for sexual harassment and other misconduct is suing the UK lender for more than £584,600, saying that female colleagues fabricated claims and that his firing was unfair. Robert Record was dismissed in September 2020 for gross misconduct, documents available at the East London Employment Tribunal show. Record says the most serious allegations never happened, and he believed a group of women had been "cooking up the charge sheet." Record said: "It is my belief that these women encouraged (a female former co-worker) to raise a grievance against me as part of a collective objective to remove me." Barclays rejects his argument.
WORKFORCE
Working parents face childcare tax trap
Fiscal drag will pull 55,000 working parents into a childcare tax trap over the next five years, according to analysis by the Centre for Economics and Business Research (CEBR). The number of parents who will find it harder to go back to work or will be incentivised to keep their salaries low will increase by 71%, the study suggests. While the Chancellor has extended 30 hours of free childcare to all working families with children over nine months old, this support is removed when one parent earns over £100,000 – also the threshold where they start to lose their personal tax-free allowance. The Institute for Fiscal Studies calculates that this means a parent with two small children will be worse off if they are earning £134,500 than if they were earning £99,000. The CEBR calculates that there are currently 78,000 parents with children under four who have salaries of £100,000 or more. As the threshold is frozen, this number will climb to 133,000 by 2027/28. Matthew Lesh, of the Institute for Economic Affairs, said: “If the underlying goal with this childcare policy is to ensure parents, particularly mothers, get back into or stay in the workforce, there is a huge disincentive factor here that could undermine the whole enterprise.”
Employers keen on four-day week
A large number of employers would consider offering a four-day week if staff spent the whole time in the office, according to a survey by Hays. A poll of almost 12,000 employers and employees found almost two-thirds of workers would prefer to change to an office-based four-day week, while a third of employers would be more likely to make the switch if staff spent all four days in the workplace. The poll also saw just under two-thirds of employees say they would consider moving to another company if it was offering a shorter week. Gaelle Blake, of Hays UK and Ireland, said: “It’s clear from our research that the appetite for a four-day working week has increased from both professionals and employers . . . However, in reality, only 5% of respondents to our survey are working for an organisation where this is actually happening.”
STRATEGY
John Lewis hit by staff backlash
Dame Sharon White, the chairwoman of the John Lewis Partnership, is coming under pressure from disgruntled staff who say they have lost confidence in the group's strategy and her leadership, according to the Sunday Times. The development comes after the paper disclosed last week that plans were being considered to end the partnership's 100% employee ownership. In an internal poll on Thursday, 85% of partners who responded said they did not have confidence in the company's ability to deliver its strategy. John Lewis said that less than 2% of staff - about 1,000 people - had taken part in the poll. Meanwhile, Oliver Shah and Sam Chambers in the Sunday Times examine the problems facing the partnership and its management team. The pair write that three years after she took over JLP from outgoing chairman Sir Charlie Mayfield, White is in a precarious position. They state: "She faces an indirect referendum on her leadership in May, when John Lewis’s 60-strong partnership council is due to hold a biannual vote on the strategy. If two members request it, there can also be a vote on whether the council retains confidence in White herself." One former director adds that there has  been a “scorched earth” approach. Another said: “Anyone associated with the past has been chucked out. The executive now has almost no one in it who really understands the origins of the partnership.”
HEALTH & WELLBEING
Kate urges employers to support caregivers to balance working life
The Princess of Wales has urged employers to prioritise wellbeing in the workplace to support family life. Catherine, who this week launched her Business Taskforce for Early Childhood, is encouraging business leaders to support parents and caregivers. Noting that parents make up a significant part of the UK workforce, she said: “We must recognise the challenge for many of these parents, and other caregivers, in balancing a successful working life with a nurturing home life during their children’s formative years.” Arguing that employers “have an important role in making that possible,” the Princess of Wales said: “While great work is being done by individual businesses, by being more co-ordinated across business and commerce, our impact could be far reaching.” She said she believes there is a need to “prioritise creating working environments that provide the support people need to cultivate and maintain their own social and emotional wellbeing.”
Paid leave for parents with babies in neonatal care one step closer
A Bill that would give additional paid leave to parents of newborns in neonatal care is one step closer to becoming law. Parliament has heard how around 700,000 babies are admitted to neonatal care each year and the stress for parents over their babies' health is often coupled with concerns over jobs and money. The law would apply to parents of children who spend at least one week in a neonatal unit. It provides up to 12 weeks of both leave and pay at a statutory rate of £156.66 a week or 90% of average earnings. The Private Member's Bill, which has already cleared the House of Commons, was introduced to the Lords by Baroness Wyld.
REGULATION
UK to update insider trading and market manipulation rules
A joint statement from the UK Treasury and the Financial Conduct Authority has laid out plans for an overhaul of the UK’s criminal sanctions regime for insider dealing and market manipulation. The reforms will be implemented as part of broader work to “repeal and replace” EU rules that were still in place post-Brexit, known as the Future Regulatory Framework (FRF) review. “As part of the FRF programme, the government intends to repeal the Market Abuse Regulation, the civil market abuse regime, and replace it with UK-specific legislation. We will set out a timetable for this in due course,” the statement said. Commenting on the move, Simon Morris, a financial services partner at the law firm CMS, said: “The EU has criminalised most serious market abuse while the UK lags with a 30-year-old regime no longer fit for purpose.”
WORKPLACE
Special Report: World of Work
The FT offers a practical guide to help students with career planning, including advice on choosing a rewarding path and employment prospects across a range of sectors.
ECONOMY
OBR chief in cost-of-living warning
Office for Budget Responsibility (OBR) chair Richard Hughes has warned that real living standards may not improve until the “late 2020s.” He told the BBC’s Sunday with Laura Kuenssberg that the country is facing the “biggest real drop in living standards on record,” although he added: “But we do expect, as we get past this year and we go into the next three or four years, that real income starts to recover.” Mr Hughes, who highlighted the challenges in forecasting economic changes, also said there was a “huge amount of uncertainty around the outlook for inflation.” He also warned that the impact of Brexit on the economy is of the same “magnitude” as the pandemic and energy price crisis, saying GDP will be 4% smaller than if the country had stayed in the EU.
INTERNATIONAL
China detains staff, raids office of US firm
The office of US corporate due diligence firm Mintz Group in Beijing has been raided by Chinese authorities. Five local staff were detained, the company said. Reuters says the incident stokes concern among foreign companies in China just as it hosts an international economic forum. Mintz Group's website says the company specialises in background checking, fact gathering and internal investigations. The company has 18 offices around the world and hundreds of employees. It said it was ready to work with Chinese authorities to "resolve any misunderstanding that may have led to these events" and that its top concern was the safety and wellbeing of colleagues in China. One US business community person has told Reuters the incident sent a "remarkable signal" that Beijing wants foreign money and technology but that it won't accept credible US firms conducting due diligence on Chinese partners or the business environment. "Red alerts should be going off in all boardrooms right now about risks in China," the source said.
Banks tell staff not to poach clients from stressed peers
Banking giants including JPMorgan, Citigroup and Bank of America have told their staff not to poach clients from stressed US lenders who were besieged by customers withdrawing their money earlier this month. JPMorgan, for example, told all employees in a memo that they "should never give the appearance of exploiting a situation of stress or uncertainty." A spokesperson for the largest US bank said: "We all have a vested interest in keeping America's financial system strong and thriving . . . It's the envy of the world with thousands of institutions of all sizes serving every corner of the country."
OTHER
Starbucks’ new CEO to work once-a-month barista shift
Starbucks chief executive Laxman Narasimhan says he plans to work a half-day shift in one of the company's outlets once a month in an effort to connect with the company's culture and customers. The former PepsiCo executive has spent the last six months immersing himself in Starbucks, earning his barista certification as well as visiting stores, farms and manufacturing centers across the world. “I felt it was very important to start as a barista. I wanted to really understand what they do and how they do it,” he said. “I’ve loved and learned so much about the retail experience from working in our stores, and can now make an excellent French press if I do say so myself.”
 


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