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12th August 2022
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THE HOT STORY
Quitting your job can cost a fortune if you got free training
Bloomberg reports that U.S. workers are required to repay thousands, or even tens of thousands, in training costs if they leave too soon. Agreements whereby employees who quit had to repay training costs were once unheard of because employers believed it was their responsibility to pay for training. Jonathan Harris, an associate law professor at Loyola Marymount University in Los Angeles who has studied clawback deals, says they emerged in the 1990s in the finance sector, where employees might have to repay as much as $75,000 for a premature departure. They are now to be found in professions such as nursing and trucking. “In the last 5 to 10 years, they’ve really taken off,” Harris says. In 2020 the Cornell National Social Survey found that almost one in 10 American workers had signed one. Attorneys who advise companies say the agreements are almost indispensable in the current red hot labor market. “I’m seeing employers enter into these agreements, saying, ‘I’m not about to put out of pocket the amount of money that it takes to get this person sufficiently trained in order for them to just go take that over to a competitor,’” observes Angie Davis, chair of the labor and employment group at the law firm Baker Donelson in Memphis. “This is just a way for companies to protect themselves.”
EMPLOYEE MENTAL HEALTH
68% of employees say thinking about current global events has a negative impact on their mental health.

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WORKFORCE
Jobless claims rise for second straight week
The number of Americans filing new claims for unemployment benefits rose for the second straight week, indicating further softening in the labor market despite still tight conditions as the Federal Reserve tries to slow demand to help tame inflation. Initial jobless claims increased to a seasonally-adjusted 262,000 last week from a revised 248,000 the previous week, the Labor Department said Thursday. Economists polled by Reuters had forecast 263,000 applications. Last week’s total was slightly above the prior 2022 peak set in July of 261,000 and was above the 2019 weekly average of 218,000. The four-week moving average for initial claims, which smooths out weekly volatility, rose by 4,500 to 252,000. Continuing claims, a proxy for the number of people receiving government unemployment payments, increased by 8,000 to 1.43m in the week ended July 30th. “The rise in initial claims since early April is a cool breeze blowing at the hot labor market this summer” and a clear sign that layoffs are happening at a growing number of companies, said Stuart Hoffman, senior economic advisor at PNC Financial Services Group.
Credit card debt surges as inflation pushes Americans to borrow more
Credit card debt surged in the United States from April through June as Americans borrowed billions of dollars to continue spending in the face of growing inflation. A Federal Reserve Bank of New York report said that credit card balances increased $46bn in the second quarter, a 5.5% rise, while there was also an uptick in new credit card accounts. The 13% increase from the second quarter of 2021 to the second quarter of 2022 was the biggest such jump in more than 20 years. Total outstanding credit card debt rose to $890bn in the second quarter, a $100bn increase from the same time last year. Household debt increased in the second quarter by $312bn, or 2%, compared with the first quarter. Total balances are now $2tn higher than before the pandemic.
REMUNERATION
Wage gains for job switchers are at a record high
People who switched jobs saw their wages jump by a record 6.7% on average in the 12 months through July, nearly two percentage points higher than those who stayed in their roles, according to calculations by the Federal Reserve Bank of Atlanta. It’s the biggest gap in records dating back to late 1997. Job stayers saw their wages increase 4.9% over the same time period, matching a series high last seen in 2001.
HIRING
Walgreens offers big bonuses to recruit pharmacists
Walgreens Boots Alliance is offering signing-on bonuses of up to $75,000 to pharmacists in some markets, as the company struggles to fill jobs amid a worker shortage. The pharmacy chain said it is ramping up spending on labor to alleviate the shortfall, which has dented drug sales and angered workers, some of whom have quit and posted calls on social media for the company to improve working conditions.  Some 3,000 of its stores operate with reduced pharmacy hours due to pharmacist shortages, causing the chain to lose revenue on prescriptions, the company has said. The median annual pay for a drugstore pharmacist was $127,820 in 2021, according to the U.S. Bureau of Labor Statistics. Pharmacists are typically required to have a doctor of pharmacy, or Pharm.D, a professional degree that often requires four years of studies beyond the undergraduate level.
The 'boomerang' employees who return after quitting
BBC Worklife reports on the growing number of workers who are going back to companies they left, including Calgary, Canada based HR professional Chris, who departed his job for a rival firm, only to became a ‘boomerang employee’ two years later, when he returned to the same company as before, but in a stronger position than when he left. “Some companies had formal policies banning rehires,” observes JR Keller, an associate professor of human resource studies in the ILR School at Cornell University, New York, about previous stigma around such job hopping. “Hiring managers were worried that bringing these employees back suggested they were rewarding disloyalty, that it would encourage others to leave.” But now, in the tight labor market, “recruiters are . . . having to think of new ways to widen their talent search. The perfect candidate may well be a former employee: you never know when someone wants to come back,” explains Nicola Thomas, talent manager at U.K. based digital marketing agency iCrossing, who says she keeps tabs on past employees as a source of recruitment.
LEGAL
OSHA investigates deaths of Amazon workers in New Jersey
The federal government is investigating the deaths of three Amazon workers who died at facilities in New Jersey over several weeks this summer. The new Occupational Health and Safety Administration (OHSA) investigations are putting fresh scrutiny on Amazon's injury rates and workplace-safety procedures, which have long been criticized by labor and safety advocates as inadequate. OSHA officials declined to provide additional information about any of the deaths, citing the open investigations. The agency has up to six month to complete each probe.
STRATEGY
McDonald’s prepares to reopen in Ukraine
McDonald's is to reopen some of its locations in Ukraine, roughly six months after Russia’s invasion of the country caused the fast-food chain to pause its operations there. “We have decided to institute a phased plan to reopen some restaurants in Kyiv and western Ukraine, where other businesses have safely reopened,” Paul Pomroy, McDonald’s corporate senior vice president for international operated markets, said in an email message to employees. Mr. Pomroy said the company will be working on getting the locations ready for reopening over the next few months. He didn’t say how many of the more than 100 stores it owns and operates in Ukraine would reopen or provide a specific timeline. McDonald’s has 109 restaurants in Ukraine but didn’t say how many would reopen, when exactly it would start happening or which locations would be the first to welcome back customers. The company said it would start working with vendors over the next few months to get supplies to restaurants, prepare those stores, bring back employees and launch safety procedures with the war still raging to the east.
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.
MANAGEMENT
Bankrupt Revlon to pay $165k monthly for interim CFO
Beauty brand Revlon has announced the appointment of Matt Kvarda, currently serving as managing director for consulting firm Alvarez & Marsal, as interim CFO, effective October 1st, following the retirement of Victoria Dolan. The CFO switch follows approximately two months after the brand filed for Chapter 11 bankruptcy on June 15th citing plans to reorganize its legacy capital structure. Revlon will pay Alvarez & Marsal a monthly fee of $165,000 while Kvarda serves as its interim CFO, according to a regulatory filing with the SEC.
INTERNATIONAL
Young workers hit hardest by lockdowns, ILO says
The International Labour Organisation (ILO) has said the job prospects of young workers have been hit hardest by the pandemic and the legacy of Covid lockdowns, with dire consequences for the long-term future of the global economy. “Young people were especially affected because firms that survived the crisis sought first and foremost to retain workers, while new recruitment collapsed,” the ILO said. “In addition, young workers were less likely to have the seniority and types of contracts marking them out for retention by employers, and hence were more likely to lose their job. Moreover, government‑sponsored job retention schemes, where they existed, were less effective in protecting young workers.” The ILO also observed: “The mass influx of refugees from Ukraine is creating further pressure for the labor market and social protection systems in neighboring countries, while the deterioration of the Russian economy could exacerbate employment challenges in Central Asia.”
Chinese court rejects high-profile #MeToo appeal
A court in Beijing has rejected an appeal over sexual misconduct claims made by Zhou Xiaoxuan, one of the leading figures of China’s #MeToo movement. Ms. Zhou accused Zhu Jun, a well-known state television presenter in China, of sexually harassing her when she was an intern. He sued her that year for defamation in response, and Ms. Zhou in turn took her sexual harassment allegations against Mr. Zhu to court. A court dismissed the case last year, citing a lack of evidence, and an appeals court has now again rejected the case. “The evidence submitted by Plaintiff Zhou was insufficient to prove that Defendant Zhu had committed sexual harassment against her, and the appeal request could not be established,” according to a statement by the Beijing No. 1 Intermediate People’s Court. The Wall Street Journal observes that the case is unusual for the way that Ms. Zhou has challenged a Chinese household name who is closely tied to the state through his work at China Central Television.
Record skills shortfall in U.K. finance
The U.K.’s finance industry is seeing its worst job vacancy rates on record. The sector had more than five vacancies unfilled for every 100 jobs between April and June 2022, the highest since records began in 2001, according to data compiled by the Office for National Statistics. The skills shortage has been caused by digitization in banking, investing and insurance and more firms requiring employees to have new skills, and is compounded by people leaving employment during the pandemic, Claire Tunley, CEO of the Financial Services Skills Commission (FSSC), said. The shortage of talent is causing employers to shift to a “reskilling approach,” and some firms have started training their staff in new areas such as machine learning and automation, Tunley said. “We can’t wait for schools to do this - it’s here and now.”
 


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