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UK Edition
8th June 2023
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THE HOT STORY
UK graduates face tough job market
Graduates in the UK are facing a tough job market with fewer opportunities and lower wages. Data from Reed Recruitment shows that the number of positions available for graduates is about 40% below 2018 levels, and pay for those posts has declined over much of the last 18 months. The rising tax burden and soaring inflation is colliding with a dearth of opportunities and more competition for the few slots available. Companies are holding back on offering new graduate jobs because they're pessimistic about finding the people to fill them. The latest graduates missed out on in-person internships during the pandemic and “simply didn't have the same opportunities,” said Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation.
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HIRING
UK labour market cools further in May
The UK labour market cooled further in May as starting salaries for permanent staff rose at the weakest pace in over two years, according to a survey of recruiters by the Recruitment and Employment Confederation (REC). The number of permanent staff placements dropped last month at the sharpest rate since January 2021, as REC's gauge of demand for staff fell to a five-month low. The latest official data showed unemployment rose to 3.9% in the three months to March, while annual wage growth held at 5.8%. Starting salaries for permanent staff fell to their lowest level since April 2021, although this still represented a historically sharp pace overall. "The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns," said Claire Warnes, a partner at KPMG UK, which sponsored the survey.
Cut taxes to boost labour market, Reed chairman urges
The chairman of one of the UK’s biggest recruitment agencies has said high taxes are deterring people from returning to the labour market after the exodus of workers during the pandemic. James Reed, the chairman of Reed, said at an event in London: “For a lot of these sort of people in their 50s, who are thinking about whether to go back to work or not, if the marginal rate of taxation on a lot of jobs is high, it is going to put them off.” Mr Reed called on the Chancellor to cut National Insurance as a way of boosting the labour market: “That might encourage people back to work, or make it more attractive. I think anything that can make work pay more, like using taxation, and other policy levers, is a good thing because it will encourage more people to come back.” Mr Reed went on to warn that the tightness in the labour market is starting to recede, increasing the likelihood of a recession. Reed data shows job vacancies dropped by 25% in April and 22% in May. “That alarm bell is sounding a bit more loudly than it was,” Mr Reed said.
Too good to be true? The fake recruiters targeting jobseekers
Elaborate recruitment scams are on the increase, putting candidates and reputable employers at risk, reports the FT. Recruitment experts say scammers have been helped by many hiring processes moving online post-pandemic.
WORKPLACE
DWS to allow staff almost a month of work abroad
Deutsche Bank's asset manager, DWS Group, is offering its staff the opportunity to work outside of Germany for up to four weeks a year. The move is part of the company's efforts to retain staff who have become accustomed to pandemic-era work flexibility. "This is nice for people who want to stay a little longer in a place where they've spent their vacation," said DWS workers' council head Erwin Stengele, who added "The policy is well received by employees, especially younger ones."
CORPORATE
CBI wins vote of confidence amid claims of misconduct
The Confederation of British Industry (CBI) has won a key confidence vote over its future after members of the UK business lobby group overwhelmingly backed it following a series of scandals. The CBI said that 93% of the 371 members who voted backed its plans to reform the organisation. Rain Newton-Smith, the group’s new director general, said the result was "a really strong mandate from our members." Nevertheless, some companies including engineering giant Rolls-Royce said their membership remains suspended. The CBI held the vote after the Guardian newspaper published allegations of sexual misconduct at the group, including two claims of rape which are currently being investigated by City of London Police. In response, the CBI set out a number of reforms and asked members to take part in a confidence vote on its future, the result of which was made public on Tuesday afternoon. It is not clear how much of the organisation's entire membership the 371 companies and trade associations who voted represents.
TECHNOLOGY
Regulator warns of danger from brain implant tech like Neuralink
The UK's privacy watchdog, the Information Commissioner's Office (ICO), has warned that emerging neurotechnology, such as Elon Musk's brain implant company Neuralink, poses a "real danger" if misused. The ICO will regulate the sector under new guidelines being drawn up. The technology, which uses implanted microchips or wearable gadgets to monitor brain waves, could be used to enable paralysed people to walk again or help blind people to see. However, the ICO warned that the data gathered by these technologies could be used to discriminate against protected groups or to unfairly spy on employees.
CYBERSECURITY
Cyber-crime gang issues ultimatum to victims
A cyber-crime gang thought to be based in Russia has issued an ultimatum to victims of a hack that has hit organisations around the world. The Clop group posted a notice on the dark web warning those affected by the MOVEit hack to email them before 14 June or stolen data will be published. MOVEit is supplied by Progress Software in the US for many businesses to securely move files around company systems. Payroll services provider Zellis, which is based in the UK, was one of its users. More than 100,000 staff at the BBC, British Airways and Boots have been told payroll data may have been taken. Cyber security research previously suggested Clop could be responsible for the hack which was first announced last week.
Phishing tests can backfire
Fake phishing messages, which are designed by company IT departments to improve an organisation's defences against cyber attacks, can actually create stress and distrust among employees. The Wall Street Journal notes the tests can backfire and cause employees to feel like they are being tricked by their own company. "It's a terrible way to build trust," said one expert. Phishing tests can be effective in identifying vulnerabilities, but it is advised that they are used sparingly and with caution. Organisations should also provide clear communication and education to employees about the purpose and benefits of these tests.
WORKFORCE
Heathrow security officers announce strikes
Security officers at Heathrow airport will take part in a fresh wave of strikes this summer that could affect travellers at the UK's busiest airport. About 2,000 officers who are members of the Unite union will walk out for 31 days between 24 June and 27 August. Terminals 3 and 5 and checks for non-passengers will be affected and the action could spark queues at security, BBC News reports.
Survitec workers continue strike over pay
Union members at the Survitec factory in Belfast are continuing their strike for a fourth day over pay. The workers are seeking an "inflation-proof" pay increase after rejecting an offer of a 6% rise. Survitec, a global manufacturer of lifeboats and emergency equipment, is hoping for an "acceptable resolution."
ECONOMY
OECD upgrades Britain's growth prospects
The Organisation for Economic Co-operation and Development (OECD) has forecast that the UK will dodge a recession this year but continue to see one of the highest inflation figures among G20 countries. The OECD predicted inflation would average 6.9% over 2023 for the UK, leaving the country with higher inflation than any G20 member except Argentina and Turkey. UK GDP growth is expected to be modest at 0.3% throughout the year, an upgrade from the 0.2% annual contraction it forecast in March. UK GDP would improve moderately to 1% in 2024. Unemployment is also expected to rise in the UK, reaching 4.5% in 2024. The OECD cast doubt on the UK government’s ability to cut taxes ahead of a general election, adding that it would struggle to cope with the pressure on the public finances from rising interest rates on government debt. 
INTERNATIONAL
ING Belgium is probed following complaints about monitoring of employee emails
Belgium's Labour Prosecutor's Office is investigating ING's Belgian branch following a complaint from a trade union that accused the bank of accessing the email communications of around 2,000 employees. The union claims the bank viewed email traffic from hundreds of employees following the dismissal of a member who was alleged to have leaked sensitive information. ING denied the accusations in April, stating that it had not given instructions to view email traffic and that it considers privacy to be very important. The BBTK union recently announced that it had filed criminal complaints against ING Belgium, the company's CEO in Belgium, Peter Adams, and Isabel Carrion, its head of human resources.
Client exodus from PwC Australia grows amid national scandal
HESTA, one of Australia's largest pension funds, has frozen work with PwC Australia amid the national scandal over the firm's misuse of confidential government tax plans. The A$72bn ($48bn) fund says it is "very concerned" and will "restrict consideration of PwC for any new or additional service provision." PwC has come under fire after a former tax partner shared confidential drafts with colleagues that were used to pitch US technology companies, among others, for work. Tax officials told a senate inquiry last week they had foiled several attempts by multinational firms to subvert tax avoidance laws as a result of the leak. PwC on Monday named at least 67 current and former staff associated with the breach in an unpublished letter to lawmakers.
New membership club for workers of colour
Porter Braswell, a Goldman Sachs alumnus, has launched 2045, a membership network aimed at accelerating the careers of workers of colour. The organisation is similar to Chief, a private club for female executives, and YPO, a leadership community of top executives. The club will focus on networking, co-working, and career development specifically for workers of colour. Braswell has spent the last decade helping corporate America recruit and hire diverse talent and is now hoping to work with firms to retain it. So far, companies including communications firm Edelman, Ford Motor, advertising agency McCann, investment firm MSD Capital, Pfizer and asset manager Sagard are among those that have agreed to fund memberships for their employees.
OTHER
Poll points to Labour landslide
The Labour Party could win a majority of more than 140 seats in the next general election, according to a poll of 10,140 voters by Focaldata for campaign group Best for Britain. The poll found that Labour could win 470 seats in the first election to be held under new constituency boundaries to be introduced this year, with the Conservative Party slumping to just 129 seats and as many as 10 current Cabinet ministers set to lose their seats. However, the poll also found that if the majority of undecided voters back the Conservative Party and Reform UK stands aside in Conservative marginals, Labour could end up with a 30-seat lead in a hung parliament, rather than an outright majority.
 


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