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UK Edition
6th September 2024
 
THE HOT STORY
PwC tells UK staff it will monitor office attendance
PwC has told its UK employees that it will start monitoring their office attendance as the firm toughens up its hybrid work policy. A memo sent to staff on Thursday by managing partner Laura Hinton also told staff and partners that they should spend at least three days a week in the office or with clients, up from two or three days previously. “We will start sharing your individual working location data with you on a monthly basis from January as we do with other data such as chargeable hours,” Hinton wrote in the memo. “This will help to ensure that the new policy is being fairly and consistently applied across our business.” She added: “We all benefit from the positive impact of a hybrid approach, but the previous guidance of at least two to three days a week was open to interpretation.”
WORKFORCE
Companies battle attitude and expectation issues with Gen Z
Research findings by HR platform HiBob indicate that 70% of managers believe companies struggle to manage young employees, particularly Gen Z (18-24 years old). Key challenges cited include demands for work-life balance (62%), salary (58%), and benefits (44%). When they were asked who should deal with issues originating with younger colleagues, 40% of managers said HR. An analysis of FTSE 100 companies found that of the 80 which published their leadership team on their corporate website, less than half (40%) had a HR director at all, and just 31% had a Chief People Officer or equivalent. Half (48%) of the respondents thought that a lack of HR representation at C-level is due to a commonly held belief that HR is a support rather than a strategy function. Toby Hough, Director of People and Culture at HiBob, said: “The role of HR leaders in organisations has been undervalued for a long time, as the C-Suite focused on business-critical issues that didn't used to involve employee wellbeing or demographic societal shifts. Today's research clearly identifies Gen Z as one of leadership teams' biggest challenges. That said, each generation brings their own unique set of challenges and opportunities to the workplace and the HR function is critical to getting the best out of all generations. To maximise their potential in today's intergenerational workplace, UK businesses must appoint HR leaders to the C-suite.” Meanwhile, almost all (95%) respondents think it’s important for companies to have HR representation on the executive team. And almost three-quarters (73%) believe HR should have a strong influence on company strategy.
Amazon announces pay rise for tens of thousands UK workers
Amazon has announced a 9.8% pay rise for tens of thousands of UK employees, increasing minimum pay rates to between £13.50 and £14.50 an hour, effective from 29 September. The decision follows the defeat of the GMB union's bid for bargaining rights over pay and conditions. The company has invested £550m in employee pay since 2022 and offers benefits like subsidised meals. However, GMB organiser Rachel Fagan criticised the move as “too little, too late,” highlighting ongoing issues such as unsafe working conditions and low pay. Workers in Coventry have been striking for a £15-an-hour minimum wage and the right to negotiate directly with management.
LEGAL
Workers' rights overhaul ‘will create two-tier jobs market'
Proposals to enhance workers' rights may inadvertently create a “two-tier” job market, according to the Resolution Foundation. The think tank warns that making it harder for employers to dismiss staff could lead to an increase in temporary contracts, which may harm the very workers the reforms aim to protect. The think tank's report says: “Countries with stronger employment protection tend to see greater use of temporary workers. This suggests that if the UK is to significantly strengthen employment protection for regular workers, it might either have to accept greater use of temporary contracts, or consider limiting their use. The former scenario might end up looking much like today's labour market in terms of overall hiring and security, but it would arguably be less desirable, as there is evidence that in ‘two-tier' labour markets workers struggle to bridge the gap between insecure temporary jobs and secure permanent jobs, posing a threat to progression and social mobility.” Nye Cominetti, the economist behind the report, emphasised the need for reforms that do not deter firms from hiring. The study highlights that while Britain has a low unemployment rate of 4.2%, the potential shift towards temporary contracts could undermine job security for vulnerable workers.
Richer Sounds boss backs Labour's plan for workers
In a recent meeting at the TUC House, Julian Richer, founder of Richer Sounds, expressed his support for Labour's New Deal for Working People alongside Paul Nowak, General Secretary of the TUC. Richer, who has a wealth of £160m, stated: “Good employers have nothing to fear from Labour's New Deal for Working People.” The New Deal aims to ban zero-hours contracts and enhance workers' rights. Richer, who has implemented fair practices in his own business, emphasised that treating staff well leads to better outcomes, saying: “When you treat staff well, they don't come in late.”
DIVERSITY, EQUITY & INCLUSION
Microsoft tackles AI bias with diversity
Microsoft's chief diversity officer, Lindsay-Rae McIntyre, talks with the BBC about the importance of diversity in addressing bias in artificial intelligence (AI). Following a PR crisis in early 2023, where its Bing chatbot exhibited troubling behaviour, Microsoft has pivoted to focus on inclusivity in AI development. McIntyre stated: "It's never been more important as we think about building inclusive AI and inclusive tech for the future." The company aims to ensure diverse representation among its teams to create fair AI systems. Despite challenges, including inherent biases in training data, Microsoft believes that embedding diversity and inclusion (D&I) from the outset can lead to more equitable AI technologies.
STRATEGY
Bakkavor to close Wigan factory
Bakkavor Group, a major supplier of salads and ready meals, is set to close its Wigan factory due to "low margins," risking 750 jobs  The company said: "This has resulted in the difficult but necessary decision to announce the potential closure of this site." If the closure proceeds, Bakkavor anticipates losing about £80m in business by mid-2025. Despite this setback, Bakkavor reported a 2.8% revenue increase to £1.1bn for the first half of the year, alongside a rise in pre-tax profit to £45.2m. Founded in 1986, Bakkavor has seen significant growth, with the UK market accounting for 90% of its business after its Stock Exchange listing in 2017.
REGULATION
UK regulator clears Microsoft over ties with Inflection AI
The Competition and Markets Authority (CMA) has cleared Microsoft's hiring of some former employees of Inflection AI and its partnership with the start-up, saying that the deal did not require further investigation. The competition regulator launched a probe in July to look at whether the deal might lead to competition concerns in the UK because both companies develop and supply consumer chatbots. The Wall Street Journal says the decision allows Microsoft some breathing space as the company faces more scrutiny in the UK and the US. British officials are still considering whether Microsoft’s partnership with ChatGPT maker OpenAI should be considered a de facto merger.
HEALTH & SAFETY
TfL staff face shocking abuse
Transport for London (TfL) has reported that its staff have been "subjected to unacceptable abuse and intimidation" during protests against Sadiq Khan's Ultra Low Emission Zone (ULEZ) expansion. Incidents have included assaults, vandalism, and confrontations, with staff having eggs and white spirit thrown at them. TfL's documents indicate that such confrontations remain prevalent, prompting the deployment of security personnel to protect contractors. A TfL spokesperson said: "It is a sad fact that we have been forced to deploy security staff to protect our contractors." The organisation is working with the Metropolitan Police Service to address these issues and ensure the safety of its staff and the public.
ECONOMY
UK economy faces slower growth ahead
The British Chambers of Commerce (BCC) has warned that the UK economy is set to grow at a slower pace, with gross domestic product (GDP) expected to decline to 0.4% in the third quarter and 0.2% in the final quarter of the year. Vicky Pryce, chair of the BCC Economic Advisory Council, said: "The BCC's latest forecast shows that while the UK economy will perform better this year, it's unlikely to be heading into the fast lane any time soon." Despite an upgrade in growth predictions for 2024 from 0.8% to 1.1%, challenges remain, including global economic uncertainty and a cautious government fiscal outlook. Employment growth has also slowed, with businesses reporting a 0.7% increase over the past year, the weakest in three years. The Bank of England noted that the labour market is loosening, which may lead to further interest rate cuts.
INTERNATIONAL
Swedish telecoms company Telia to lay off 3,000 workers
Telia, the Nordic and Baltic telecommunications giant, has announced plans to reduce its workforce by approximately 3,000 employees. The company aims to streamline operations and enhance customer focus, saying that it intends to "reduce layers of organisational complexity." The restructuring is expected to save around €122m (1.4bn Swedish Krona) in the latter half of the year, with annual savings projected at €228m (2.6bn Swedish Krona). Heli Partanen, CEO of Telia Finland, emphasised that the downsizing is crucial for profitable growth and improved customer satisfaction. Patrik Hofbauer, Telia's president and CEO, described the decision as "tough" but necessary for the company's long-term success. Job cuts will affect Sweden, Norway, Finland, Lithuania, and Estonia. Further details will be provided following union negotiations.
New foundation will support families of workers killed in industrial accidents
HD Hyundai has established the HD Hyundai HeeMang Foundation, the first of its kind in Korea, to support families of workers killed in industrial accidents at shipyards. Proposed by Chairman Kwon Oh-gap, the foundation aims to fulfil the conglomerate's social responsibilities. Approved by the Ministry of Employment and Labor, the foundation's inaugural chairman is Lee Ki-kwon, a former labour minister. Kwon donated 100m won ($74,687) and serves as honorary chairman. The foundation will initially provide scholarships for victims' children and plans to expand support to cover living expenses, medical, and legal costs. “We will make every effort and provide full support to help alleviate even a small portion of the grief experienced by the families of the deceased,” Lee stated. The initiative follows HD Hyundai's establishment of the HD Hyundai 1% Nanum Foundation in 2011, which supports various charitable causes.
Pressure on Nike grows over workers' rights
Investor pressure on Nike is intensifying as Norway's sovereign wealth fund supports a resolution aimed at improving working conditions in garment factories. The resolution, backed by a coalition of investors including Domini Impact Equity Fund, highlights the industry's failure to address "persistent rights abuses such as wage theft." Nike, facing declining sales and criticism over its supply chain practices, has seen its ESG rating downgraded by MSCI. The resolution seeks to encourage Nike to establish binding agreements with workers in high-risk sourcing countries.
OTHER
John Lewis revives price pledge
John Lewis is set to reinstate its ‘never knowingly undersold’ price pledge, effective from Monday, after previously discontinuing it in 2022. The decision aims to enhance the retailer's value perception among customers. CEO Peter Ruis said: “Customers have recognised our quality but there were questions over whether our value offer has been sharp enough in some areas.” The updated pledge will leverage AI technology to match prices from 25 major competitors, including Amazon and M&S. Around 30,000 prices are expected to change.
 


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