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23rd September 2022
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THE HOT STORY
Bosses think workers do less from home, according to Microsoft survey
A major new survey from Microsoft shows that bosses and workers fundamentally disagree about productivity when working from home. The results of the survey show that while 87% of workers felt they worked as, or more efficiently, from home, 80% of managers disagreed. The survey questioned more than 20,000 staff across 11 countries. Microsoft CEO Satya Nadella told the BBC this tension needed to be resolved as workplaces were unlikely to ever return to pre-pandemic work habits. "We have to get past what we describe as 'productivity paranoia,' because all of the data we have shows that 80% plus of the individual people feel they're very productive - except their management thinks that they're not productive. That means there is a real disconnect in terms of the expectations and what they feel." He added that employers are having to work harder to recruit, enthuse and retain staff. That even includes Microsoft itself. "We had 70,000 people who joined Microsoft during the pandemic, they sort of saw Microsoft through the lens of the pandemic. And now when we think about the next phase, you need to re-energize them, re recruit them, help them form social connections," Mr Nadella said. Microsoft employees can work from home up to 50% of the time as standard.
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CORPORATE
Bank bosses warned to steer clear of social and cultural issues
Republicans are complaining that U.S. banks are inappropriately taking liberal stances on social and cultural issues. Senator Pat Toomey, the senior Republican on the Senate Banking Committee, called on lenders to cease "embracing a liberal ESG agenda that harms America," as chief executives appeared before Congress for an oversight hearing. "I can't help but observe that when banks do weigh-in on highly charged social and political issues, they seem to always come down on the liberal side," Toomey said in his opening statement. Meanwhile, Sen. Kevin Cramer said banks were feeling pressure to be "one of the cool crowd." Reuters says the growing scrutiny underscores the challenges the largest U.S. lenders increasingly face as they try to balance commercial interests with pressure from policymakers, activists and investors to take stances on environmental, social and governance (ESG) issues.
LEGAL
Justice Department encourages corporate self-disclosure on misconduct
The Justice Department is encouraging companies to swiftly and voluntarily self-disclose malfeasance as it increases efforts to combat corporate misconduct.  Deputy Attorney General Lisa Monaco has expanded on policies introduced by the department last October and said it is "committed to providing incentives to companies that voluntarily self-disclose misconduct to the government." Those policies require companies to name all people involved in misconduct in order to receive credit for cooperation and required prosecutors to consider a company's full record when deciding how to resolve an investigation. “In many cases, voluntary self-disclosure is a sign that the company has developed a compliance program and has fostered a culture to detect misconduct and bring it forward,” Monaco said. “We also want to clarify the benefits of promptly coming forward to self-report, so that chief compliance officers, general counsels, and others can make the case in the boardroom that voluntary self-disclosure is a good business decision,” she said. But Reuters notes the agency is also wielding a stick, in the form of enhanced penalties on corporate repeat offenders. Monaco said that between 10% and 20% of large corporate criminal resolutions have involved repeat offenders.
Tesla countersues California agency behind race bias lawsuit
Tesla has countersued California's Civil Rights Department (CRD), the agency that has accused the electric carmaker of tolerating widespread race discrimination at its flagship manufacturing facility in Fremont. The carmaker in a complaint filed in state court in Alameda County said the CRD, which sued the company earlier this year, adopted "underground regulations" allowing it to file the lawsuit without first notifying Tesla of the claims or giving the company a chance to settle. The counter-lawsuit alleges that the agency violated state law by not seeking public comment before adopting procedures for investigating and suing employers. Meanwhile, Tesla is recalling nearly 1.1 million U.S. vehicles because the window automatic reversal system may not react correctly after detecting an obstruction, increasing the risk of injury. Tesla said that during product testing in August employees identified window automatic reversal system performance that had "greater than expected variations in response to pinch detection."
WORKFORCE
Jobless claims rise to 213,000
U.S. applications for unemployment benefits rose slightly after five consecutive weeks of decline as many employers continue to hold on to workers despite a slowing economy. The Labor Department said that initial jobless claims increased to a seasonally-adjusted 213,000 last week, from a revised 208,000 the previous week, and slightly lower than the prepandemic average of 218,000 in 2019, when the labor market was also tight. Economists polled by the Wall Street Journal had forecast new claims to total 214,000. The four-week moving average, which smooths out weekly volatility, fell by 6,000 to 216,750. Continuing claims, a proxy for the number of people who have been unemployed and have received benefits for more than one week, decreased slightly to 1.38m in the week ended September 10th from the previous week. Of the 53 states and U.S. territories that report jobless claims, 37 showed an increase and 16 reported a decline. “With monetary policy aimed at softening labor market conditions, demand for workers is set to moderate and layoffs are likely to pick up over time,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics.
Workers’ changed attitudes tighten labor market
Writing for the Wall Street Journal, Greg Ip says the pandemic has altered what job conditions, hours, and pay workers are willing to accept, and the effect is to make labor scarcer and more expensive than ordinary economic indicators typically show. However, this new attitude toward work, and the bargaining power it brings, might already be changing. Surveys show workers’ desired hours have recovered this year. In August, workforce participation was higher, and in early September the share of workers in the office climbed to a recent high of 47.5% of pre-pandemic levels, according to Kastle Systems.
STRATEGY
McKinsey hires its first chief technology officer
McKinsey has hired senior Microsoft executive Jacky Wright to be the firm’s first-ever chief technology and platform officer. Wright, who served as the tech giant's chief digital officer and previously held senior tech roles at BP and GE, will join McKinsey later this year and report to global managing partner Bob Sternfels, according to a statement. London-born Wright was named the “most powerful Black Briton” by the U.K.'s Guardian newspaper last year. “Jacky will strengthen how we use technology both to help clients scale new ideas and tackle challenges, and to transform the way our more than 40,000 people work together across our global firm,” Sternfels said in the statement.
Nordstrom could cut 231 jobs at Cedar Rapids fulfillment facility
Nordstrom has written to staff at its Midwest Fulfillment Center informing them that the corporation plans to "adjust the size" of its workforce there. The Seattle-based department store chain filed a Worker Adjustment and Retraining Notification, or WARN, for 231 employees at the facility. “Over the past several months, we've been working to evolve our supply chain network to more closely align with the needs of our business and customer", said Jason Bell, Nordstrom’s senior vice president of supply chain operations. "This includes our continued shift away from a national fulfillment model to a regional fulfillment model, which we know will get us closer to our customers and allow us to better serve them".
TAX
California sees warning sign from weak tax revenue collections
California drew in 11% less in personal income tax revenue than it expected so far this year, the latest warning sign for the finances of a state whose fortunes are closely tied to the performance of markets. Total revenue collections through August, which is the second month of the 2022-2023 fiscal year, came in about 8% below the forecast, according to the California Department of Finance. "Shortfalls in August continued to be largely driven by lower proceeds from personal income tax, however, the month also saw lower proceeds from sales and corporation taxes," the bulletin said. The Golden State's revenue miss adds to signs around the country that government's revenues may be curtailed by a decelerating economy. However, the state has already upped its reserves to cover the hit of the next downturn, with lawmakers pouring $37.2bn into its reserves in its latest spending plan. 
INTERNATIONAL
German employers will soon have to monitor staff working hours
Germany’s Federal Labor Court (BAG) recently said that local employers should be recording the working hours of all staff. The court’s decision brings into force a 2019 ruling by the European Court of Justice (ECJ), which stated that employers in EU member states should be implementing systems to record how many hours per week employees were working, to protect them from excessive working hours and unpaid overtime. Until now, this hadn’t been brought into law by Germany’s government. Labor law specialist Dr. Michael Fuhlrott says the ruling means that the German Occupational Health and Safety Act must now be interpreted in such a way that it includes an obligation to record working hours: “In other words, the obligation applies directly, to every company with immediate effect.” But he observes that in the absence of a written law, it’s not clear exactly how the new rules will be enforced.  “There is currently a high degree of uncertainty as to how the ruling is to be understood. We will have to wait for the court’s exact reasoning. In view of this current lack of clarity, companies should first wait for the exact reasoning behind the decision and then consider how to respond to it,” Dr. Fuhlrott said.
China sends regulators to Hong Kong to assist U.S. audit inspection
Beijing has sent a team of regulatory officials to Hong Kong to assist the Public Company Accounting Oversight Board (PCAOB) with onsite audit inspections involving Chinese companies, as part of a landmark deal between the two countries. A China-U.S. agreement last month allows U.S. regulators, for the first time, to inspect China-based accounting firms that audit New York-listed companies.
New Zealand push for plain language law
New Zealand’s government hopes to banish jargon with a plain language law demanding that bureaucrats use simple and comprehensible language to communicate with the public. The proposed legislation will require government communications to be clear and concise, but opposition argue it will add further layers of bureaucracy and cost, in the form of plain language-monitoring officials, without actually improving communication with the public. “I don’t think plain language can really solve [the] problem. As long as humans are creative and playful and inventive, I think they’ll find ways around it,” says linguist Dr Andreea Calude.
OTHER
High levels of 'forever chemicals' found in kids' school uniforms
Researchers have found high levels of dangerous chemicals called per- and polyfluoroalkyl substances (PFAS) in school uniforms sold across North America. Known as "forever chemicals," they have been linked to an increased risk of health problems, including a weakened immune system, asthma, obesity and problems with brain development and behavior. Examining a variety of children's textiles, the researchers found fluorine in 65% of samples tested. Concentrations were highest in school uniforms, especially those labeled 100% cotton. Such chemicals are widely used in consumer products and can be harmful to health.
 


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