YOUR REGION: United States
Courtney Pearse
Courtney Pearse

Are employers offering salaries that match those of their industry competitors?

Administrative and support industry reported a 12.66% rise in weekly wages

In the continuous war for talent, it’s important for TA teams to ensure they’re paying market-related salaries in order to attract the right talent for their organisations. When workforce planning, TA teams should be sure to investigate what competitors in their industries are paying to be able to compete for good candidates.

In a recent study conducted by UK trading platform CMC Markets has found that the mining and quarrying industry has seen the largest increase in wages among all UK industries between January 2022 and January 2023.

The study analysed data from the Office for National Statistics’ Wages and Salaries Survey since January 2000. The average weekly earnings in the mining and quarrying industry rose by 12.95% over one year, from £1,203 to £1,382.

The administrative and support service activities industry comes in second, with a 12.66% increase in weekly earnings from £490 to £561. The professional, scientific & technical Activities industry takes third place, with an increase in average weekly earnings from £854 to £940, a percentage change of 9.15%.

The manufacturing industry for chemicals and man-made fibres and the education industry round out the top five, with weekly earnings increasing by 8% and 7.4%, respectively, between January 2022 and January 2023.

Michael Hewson, CMC Markets Chief Market Analyst commented: “This list is varied in terms of industries, showing that wages are rising steadily in many lines of work in the UK. However, with this data essentially summarising an entire industry as the data is across multiple industries, it will be interesting to see how wages have increased in the top and bottom end of these industries, especially with strikes occurring in many of them, including education, due to pay disparity and unsuitable wages.”
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45% of UK businesses are considering closure due to the energy crisis

25% of businesses had let staff go to help recover costs lost to energy bills

As with employees, businesses are struggling to keep on top of rising energy costs as well, according to data from financial comparison site NerdWallet.

The survey of 500 UK business owners and senior decision makers revealed that just under half (45%) of business owners were worried that they may need to close their business. Only 11% of businesses said they could cope with the rising costs.

The survey asked about measures business owners were taking to try and conserve energy and save money. Some surveyed businesses stated they’d now moved to a hybrid or full-remote work style, with 68% of respondents moving to hybrid working, being in the office for fewer than five days per week (38% with incentives, 30% without) with a further 32% moved to fully remote working.

Staffing relationships was a key factor in the findings. 28% of businesses admitted they had stopped employees charging their devices at work as a measure to conserve energy. More dramatically, 25% of business owners in the survey had let staff go due to energy costs.

With costs continuing to rise in 2022, some businesses were left with no choice but to raise their prices. 43% of respondents in the survey stated that they had already increased their prices as a result of the energy crisis, with a further 8% saying they hadn’t done so yet, but were planning to in the future.

For those who were unable to make up their losses in increased product and service prices, it seems they’ve made budget cuts elsewhere to stay afloat. 43% of those asked in the survey had cut budgets for staff training, and 38% had stopped hiring new staff altogether. 36% said they’d also had to downsize their office to save money.

NerdWallet’s Business Finance Expert, Connor Campbell, commented: “When we conducted this survey, we perhaps expected to see some level of hardship reflected in the results. However, the amount of scaling back and budget cuts laid bare in this survey highlights just how much UK businesses are struggling to get to grips with the energy crisis.

“Although support has been put in place for a set period of time, businesses will need reassurance for the long-term future, so they can budget effectively and decide on their next steps.”

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Economy and employment slow, but Nabe report also says inflation is easing

Survey: 15% of firms report rising employment

The National Association for Business Economics has released the “April 2023 NABE Business Conditions Survey,” which suggests that economic growth may be easing, while employment growth remains slow. However, the survey also indicates that inflation is cooling, with 40% of respondents reporting that prices charged are rising, down from 46% in the January 2023 survey and 49% from a year ago. The panel believes there is more work to be done against inflation as the share of panelists expecting prices to rise in the next three months has increased.

The survey found that 15% of respondents said employment had been rising at their firms over the past three months, while 15% said it had been falling, resulting in a net rising index of zero. This is the lowest net rising index since the July 2020 and October 2020 surveys. For the next three months, 15% of respondents anticipate employment will rise, while 19% expect it to fall, resulting in a net rising index of negative four, an improvement from the negative seven net rising index in the January survey.

The survey also indicates that shortages of skilled labor decreased to 33% from 40% in January, while 11% reported shortages of unskilled labor. Close to half of the respondents reported that their firms are not facing any labor shortages, while 22% expect labor shortages to start to abate in the fourth quarter of 2023 or later.

In addition, for the third consecutive survey, 63% reported rising wages at their firms over the past three months. None expects wages to fall over the next three months, but only 43% of respondents expect their firms’ wages to rise in the next three months—the smallest share since the October 2020 survey.

The panel’s view is nearly evenly split on the probability of the US economy entering a recession in the next 12 months, with 44% indicating more than 50% probability, and 53% suggesting less than or about 50% probability of a recession in the next year.

The survey included 55 business economists and was conducted from April 4 to April 12.

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Most Americans oppose using AI to hire and monitor workers

The impact of AI on hiring and employment practices

The increasing use of generative AI tools, hiring algorithms, and productivity tracking software, among other AI applications, is transforming the employment landscape and creating new challenges for HR teams. Federal, state, and local regulators are struggling to keep pace with the rapid growth of AI, particularly in relation to its use in hiring decisions. The U.S. Equal Employment Opportunity Commission has expressed concerns about the potential for discrimination arising from the use of AI in recruitment. In response, New York City has enacted some of the most restrictive AI-in-hiring laws in the country, requiring local employers to audit and notify job candidates about the use of automated employment decision tools.

According to a survey by Pew, many job seekers are wary of employers that use AI to assist with hiring decisions, with two-thirds of respondents saying they would not apply for such positions. The reasons cited included concerns about the need for specific keywords on applications and the inability of AI to capture nonverbal information from candidates. However, among the remaining respondents, some felt that AI could be less prejudiced and more objective than human recruiters.

Pew’s survey also found that respondent sentiment about AI varied based on factors such as income level, gender, race, and ethnicity. Higher-income respondents were more likely to favor the use of AI in reviewing applications, while men were more likely than women to see both benefits and downsides to AI usage in the workplace. White and Asian adults were also more likely to see potential downsides for AI used to monitor workers.

Employers must carefully consider whether and how to integrate AI into their processes. Some experts suggest that employers should allow employee needs to drive the use of AI and automation in the workplace. However, a survey of information technology managers and workers found that most respondents had witnessed negative impacts from employers using surveillance technology. As public opinion about AI in the workplace continues to evolve, many people remain unsure of their positions on the issue.

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US leading economic index falls to lowest level since November 2020

US economic index signals forthcoming downturn

According to a recent report by The Conference Board, the Leading Economic Index for the US experienced a decline in March, dropping by 1.2% to a reading of 108.4 (2016=100). This is the lowest level the index has seen since November 2020, following a 0.5% decrease in February. The decline is higher than the 0.7% drop that was expected by economists polled by The Wall Street Journal. The report suggests that this is an indication of a forthcoming economic downturn, as the index has been declining every month for the last year, with the last time the series was this negative for this long being from 2007 to 2009.

The Leading Economic Index has shown an overall decrease of 4.5% over the six-month period between September 2022 and March 2023, which is a steeper rate of decline than the previous six months’ contraction of 3.5%. The weaknesses in the index’s components have been widespread in March and have been so over the past six months, pushing the growth rate of the LEI deeper into negative territory. Only stock prices and manufacturers’ new orders for consumer goods and materials have contributed positively over the last six months.

Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, stated that the US LEI’s decline to its lowest level since November of 2020 is consistent with worsening economic conditions ahead. She also noted that the Conference Board predicts that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in mid-2023.

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ManpowerGroup Q1 revenue falls 2.2%, but gross margins improves; US down 13.4%

ManpowerGroup Q1 revenue falls, outplacement activity increases

ManpowerGroup Inc. (NYSE: MAN) has released their Q1 earnings report, revealing a 2.2% decline in revenue in constant currency or 7.6% on a reported basis, totaling $4.75 billion. The decline in revenue was attributed to a challenging operating environment in the US and Europe, despite labor markets remaining strong. Chairman and CEO Jonas Prising noted that employers are being more selective with new hires and focused on retaining their existing staff. ManpowerGroup will continue to adjust their cost base in areas where demand has decreased.

The company’s gross margin improved due to strong pricing discipline and increased outplacement activity in their Right Management business line. In terms of revenue by region, US revenue fell 13.4%, while revenue across Europe fell on a constant currency basis with the exception of France where it rose 2.5%. Revenue in the Asia Pacific Middle East operations increased by 7.3% in constant currency.

Looking at earnings by business line, the Talent Solutions segment, which includes ManpowerGroup’s Right Management and outplacement operations, fell 1% year over year on an organic, constant currency basis but was up 1% on a reported basis. The Manpower and Experis operations saw declines in revenue of 1% and 5%, respectively.

For Q2, ManpowerGroup forecasts a total revenue decline between 2% and 6%, with a decline of 8% to 12% in Americas revenue and declines ranging from 3% to 8% in Europe. Asia Pacific Middle East revenue is expected to be flat to up 4%. The company expects a gross profit margin between 17.9% and 18.1%.

ManpowerGroup’s shares were down 5.92% to $74.80 and the company’s market cap was $4.04 billion, according to FT.com.

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‘Looking into it’: Musk responds to bonus cuts at Tesla’s Shanghai factory

Elon Musk to Investigate Bonus Cuts for Tesla’s Shanghai Factory Employees

Elon Musk recently commented on reports that employees at Tesla’s Shanghai factory would have their performance bonuses reduced. Musk, who was alerted to the issue over the weekend, took to Twitter to say that he is looking into the matter. The reports were sparked by a now-deleted tweet from user @AFeiywu, who urged people to pay attention to the arbitrary deduction of bonuses for frontline workers at the factory, which employs around 20,000 people. Some workers claimed online that around CNY2,000 would be cut from their quarterly bonuses. According to Reuters, two workers cited the “safety incident” that occurred at the factory on February 4, resulting in one employee’s death, as a reason for the cuts.

An investigation found weaknesses in the factory’s security measures, with the employee who died failing to lock a safety gate as required by the rules. Another employee also failed to ensure that the area was clear before turning on the equipment that caused the accident. Some workers feel that it is unfair to have their bonuses cut because of the company’s liability problems. The incident was previously reported on Pudong’s website before being removed at Tesla’s request as it contained photos of the company’s production process. This news comes as Tesla plans to build a new mega factory in Shanghai for its energy-storage product Megapack, set to start production in Q2 2024.

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WFH legislation, more annual leave pushed in Singapore

Politician keen to better support employees’ work-life balance

Singaporean Member of Parliament (MP), Louis Ng, has called for the implementation of work from home (WFH) legislation and an increase in annual leave entitlement to address the country’s overworked workforce. In a speech to Parliament, Ng stated that these policies are necessary to improve work-life balance and reset existing policies. Singapore has been identified as one of the most overworked, fatigued, and stressful cities in previous surveys, making it crucial to address the issue.

Ng clarified that the WFH legislation would not make the arrangement mandatory, but it would grant employees the right to choose. Employers would still be able to require employees to work in the office for specific business-related reasons. Ng acknowledged the Tripartite Standards for Work-Life Harmony and the Tripartite Guidelines on Flexible Work Arrangements, but emphasized that they were insufficient.

During the pandemic, WFH legislation was implemented, which benefited Singapore’s transport and healthcare systems, as well as addressed gender equality. However, this has since been replaced by Guidelines on Flexible Work Arrangements, which Ng described as a step backward. He criticized the strange penalties for the guidelines, such as curtailing work-pass privileges.

Ng also called for an increase in the minimum amount of annual leave entitlement, citing the seven-day minimum as “extremely low” compared to other Asian countries. He recognized the need to balance the needs of businesses but stressed the importance of supporting the overworked workforce.

The Ministry of Manpower has stated that it has no plans to review the potential impact of WFH legislation but expects WFH arrangements to become more mainstream.

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Employers prioritise skills and financial well-being more than regional and global counterparts

Study reveals 63% offer flexible working

Mercer’s research shows that Malaysian employers are placing a greater emphasis on skills and financial well-being compared to their regional and global counterparts. The study found that 63% of companies in Malaysia offer flexible working options for all employees, which is significantly higher than the Asia average of 50% and the global average of 56%. In addition, 35% of Malaysian employers are adjusting pay or providing cost-of-living adjustments to those earning below the market median, compared to the Asia average of 20%.

However, when it comes to total well-being initiatives for all employees, companies in Malaysia are slightly lagging behind. Only 35% of Malaysian employers are redesigning work with well-being in mind, while just 21% have provided on-demand access to virtual mental healthcare. On the other hand, Malaysia is doing better than Asia in investing in financial wellness programs, with 18% of companies offering such initiatives compared to 14% in Asia.

The study also found that more needs to be done to provide job security for gig/freelance workers, as 71% of Malaysian employers do not have such initiatives compared to an Asia average of 46%. However, Malaysian companies outperform their Asian counterparts in understanding talent development needs, with 61% of companies in Malaysia compared to 56% of Asian firms. Finally, the study found that 47% of Malaysian employers reported that their upskilling and reskilling programs were effective at preparing talent to move into new areas, compared to an Asia average of 33%.

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Employer record-keeping obligations

Employment record-keeping and data access regulations overview

Employers in the Asia-Pacific region are obligated to maintain employee records containing personal data, and employees may have the right to access that data. However, record-keeping requirements vary across jurisdictions. Singapore requires records of employee data to be kept as set out in the First Schedule of the Employment (Employment Records, Key Employment Terms and Pay Slips) Regulations. Retention periods for different data vary, and there are also various record-keeping obligations under other laws and regulations. For example, Rule 11 of the Central Provident Fund Rules requires records of payments given by the Central Provident Fund Board to be retained for at least two years from the date of issue. In the event of a data breach, employers may face severe consequences. OrangeTee & Tie, a real estate firm, had to pay $37,000 after a data breach compromised the information of 250,000 employees and customers.

In Hong Kong, employers must keep wage and employment records of each employee covering the preceding 12 months of employment, and records must be kept for another six months after termination of employment. The Code of Practice on Human Resources Management specifies that other records relating to an employee’s personal data may be retained by the employer for up to seven years from the date of termination. Record-keeping obligations under other laws include keeping records of the type of identification document held by an employee under the Immigration Ordinance, and remittance statements under the Mandatory Provident Fund Schemes (General) Regulation.

In Thailand, the Thai Labour Protection Act B.E. 2541 (1998) requires employers with ten or more employees to have an employee register in Thai containing specific employee information, and the information of each employee must be updated within 15 days upon any change. The retention period of records in the employee register is at least two years after termination of employment. The Thai PDPA also requires employers to maintain records of data processing activities.

Under Singapore’s Personal Data Protection Act 2012, individuals may request access to their personal data in an organisation’s possession or control. However, organisations are not required to provide access to data that includes opinion data kept solely for an evaluative purpose or personal data that would reveal confidential commercial information that could harm the organisation’s competitive position, among others.

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