Category: Employers

39% of organisations reporting losing employees to companies who offer flexibility

Unit4, the cloud applications organisation, has announced the people and HR-related findings of its second annual Business Future Index.

The report surveyed 3,450 respondents across 12 global markets in order to understand how much people, policy and technology changes have accelerated over the past 12 months with the Index revealing significant concerns with flexible working strategies, despite a dramatic acceleration in its adoption. With competition for talent growing, there is a danger that failure to improve working policies and implement the right tools could lead to more employees choosing those employers who offer a more flexible approach.

The index found that 76% of respondents said that flexible working policies need improvement and 62% agreed that the tools to support flexible working are not adequate. A mere 18% of respondents said that they experience a flexible working policy without any restrictions with 39% of organisations reporting losing employees to companies who offer flexibility.

Attracting and retaining talent (62%) remains the biggest priority for organisations over the next 12 months, as talent shortages continue.

Flexibility important but implementation inconsistent

The Business Future Index found that 92% of respondents stated that their organisations have now adopted some form of flexible working policy. However, it also revealed that there is much work to be done to apply these policies more equitably and ensure employees have the right framework and tools to enable such approaches. For example, the Index discovered that 37% of people work flexible hours, such as working from 9am – 3pm, then made up time in the evening with 31% working a completely flexible hybrid model (office and home based). Of the respondents, 31% stated that they are mandated to spend a proportion of time in the office (for example, a certain number of days per week).

While the reasonably even split between the different types of flexible working is understandable given that not every organisation can offer complete remote working, other data suggests an imbalance in how such policies are applied. While 55% say flexible working applies to all employees, more than a third (35%) said it only applies to some employees dependent on job role, and 9% suggested it depends on the manager’s discretion applying only to some employees. Given that less than one fifth of employees experience flexible working without restrictions, there is still some way to go to improve such policies and, therefore, it is critical organisations move quickly to avoid loss of talent.

Big drivers for workforce strategies: recruitment, diversity and technology

According to the Index, attracting and retaining talent remains the top priority for all organisations across the globe in the year ahead, but the Index revealed further challenges impacting workforce strategies, that included staff retention, ESG credentials and diversity, with only 25% of organisations planning to improve diversity within the business.

Re-skilling talent (51%) and implementing a successful flexible/hybrid working policy (50%) also made it onto the list of top business priorities, compounded by 51% who believe that the real need to enhance talent strategies will hinder their ability to achieve their objectives.

Tania Garrett, Chief People Officer, Unit4 commented: “Given the need to attract a broad spectrum of talent into organisations from different demographic groups to meet demand for skills, the Business Future Index shows businesses must make diversity a higher priority. Along with investing more in reskilling their existing workforce to help meet future requirements, the Index clearly shows there is a close correlation between investment in innovative technologies and a positive impact on recruitment and retention.”

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Unemployment falls by 0.2%

According to the ONS’s latest labour market overview, the UK employment rate remained largely unchanged for July to September 2022 was 75.5%, and 1.1% lower than before the COVID-19 (December 2019 to February 2020). The data revealed that over the latest three-month period, the number of employees decreased, while self-employed workers increased.

Payrolled employees for October 2022 shows another monthly increase, up 74,000 on the revised September 2022 figures, to a record 29.8 million whilst the unemployment rate fell by 0.2% for July to September.

The big news of the week has been confirmed with the report stating that economic inactivity rate increased by 0.2% on the quarter to 21.6% in July to September 2022. During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high. In a recent article published by the ONS explored the economically inactive because of long-term sickness in more detail. It showed that over two-thirds of those becoming long-term sick in 2021 and 2022 were already economically inactive for another reason in the three months before interview.

Vacancies for August to October 2022, fell by 46,000 on the quarter to 1,225,000 but despite four consecutive quarterly falls, the number of vacancies remain at historically high levels. An increasing number of businesses are now reporting holding back recruitment because of economic pressures.

According to the report, growth in average total pay (including bonuses) was 6.0% and growth in regular pay (excluding bonuses) was 5.7% among employees in July to September 2022. This is the strongest growth in regular pay seen outside of the coronavirus pandemic period.

Average regular pay growth for the private sector was 6.6% in July to September 2022, and 2.2% for the public sector. Outside of the height of the coronavirus pandemic period, this is the largest growth seen for the private sector and the largest difference between the private sector and public sector.

In real terms (adjusted for inflation) over the year, total pay fell by 2.6% and regular pay fell by 2.7%. This is slightly smaller than the record fall in real regular pay reported in April to June 2022 (3.0%), but remains among the largest falls in growth since comparable records began in 2001.

Joanne Frew, Global Head of Employment & Pensions at DWF commented: “The latest ONS figures show a steady labour market despite the UK’s ongoing economic struggles. The UK economy is certainly facing a challenging period with soaring inflation and the Bank of England warning that the UK could be set for its longest recession since records began.  The Chancellor, Jeremy Hunt, is due to deliver his Autumn Statement on Thursday 17 November and has already warned that tax rises are necessary to help tackle inflation.  Against this backdrop it is likely that the labour market will face a relatively turbulent time.  Despite the ongoing resilience of the market during the pandemic, it is likely that the economic difficulties will lead to more job losses over the coming months.”

Bev White, CEO of Nash Squared said: “Despite Big Tech recently putting a freeze on their recruitment plans or even shedding jobs, today’s ONS jobs figures show that UK Tech continues to buck this global trend by adding a further 92,000 jobs over the last quarter, and firmly cementing itself as the UK’s standout private sector job creator over the last three years – with almost 350,000 additional jobs created.

“This performance is even more startling when you consider that we’ve lost over three quarters of a million private sector jobs over the same three-year period in the UK.

Despite the downturn, there is little sign of a tech slowdown. Tech investment in the UK is expected to hit its third highest level for more than 15 years and over half (56%) of digital leaders running tech departments in the UK plan to increase their technology headcount this year.”

Lauren Thomas, Glassdoor’s UK Economist also commented: “As news of tech layoffs spreads, Glassdoor’s data shows that employees are increasingly anxious with discussion of layoffs doubling and mentions of recession up tenfold from last October. Hiring has also taken a hit, with mentions of hiring freezes up more than 450 percent.

“However, this isn’t 2008. Unlike the Great Recession, the current shortage of workers is much more acute and even a potential recession would be unlikely to result in the same peak of unemployment as we saw then. There are reasons to be hopeful – vacancies are likely to remain higher and both redundancies and unemployment are lower than before the pandemic.”

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What companies can do to boost the confidence of an older workforce

New LinkedIn research has shown that 72% of UK business leaders have actively been attempting to hire experienced workers who retired as a result of the pandemic.

However, despite companies trying to recruit from this demographic, the research also indicated that 38% of those aged 50+ felt they would be disadvantaged because of their age. Furthermore, 26% feel that they don’t have the right skills.

Additional LinkedIn data shows that, in the UK, “Baby Boomers” (those aged 58-76) and “Gen X” (those aged 42-57) have historically had, and continue to have, lower confidence in ‘getting/holding a job,’ compared to younger generations.

There are however steps that companies can take to attract experienced talent, promote inclusivity, and boost the confidence of these experienced individuals.

Derval Blehein, HR Leader for EMEA and LATAM at LinkedIn, commented: “Employers who actively invest in overcoming ageism in the workplace can unlock a wealth of talent –  we know diverse teams win, and diversity of thought gained through age and experience is a critical component of this equation. However there is work to be done to ensure that hiring processes are inclusive across all age groups.

Employers who take a skills-based approach to hiring can help diminish bias towards certain generations. By focusing on a candidates’ transferable skills, employers will broaden their talent pools and increase diversity in their workforce. Over time, this hiring approach will widen age profiles in industries that typically favour a certain age group.

Flexibility is vital to encourage all, and especially older, workers to remain in the workforce. LinkedIn data shows that flexible work is highly valued across all generations – allowing people to work productively, whilst protecting time to pursue other commitments such as family and caring responsibilities. However, these initiatives need to be matched with remote-first tech support for those who may be less confident in their ability to set themselves up for success while working from home.

Employers should consistently review, tailor and update their benefits packages so that each generation’s needs are met. A good example of this is offering flexible benefits which individuals can easily tailor to their own needs. Taking the time to adjust employee benefits and training to each life stage will not only help to boost employee satisfaction but will also positively impact retention across demographics.”

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Contractor rates spike amid skills shortages

New data from the Association of Professional Staffing Companies (APSCo)has revealed that UK businesses are paying more for contractors as skills shortages and economic uncertainty continue to drive demand for temporary support.

According to the data provided by Bullhorn, there was a 3% month-on-month increase in contractor roles in October. These figures were up 6% when compared to the same period in 2019.

The report went on to reveal that the amount invested in attracting these individuals has increased at a much higher rate than demand. In October 2022, staffing firms showed a 7% increase in contract revenue, compared to September. Annual comparisons showed a 14% increase in October.

The greatest increase was seen in pre-covid levels. Sales are up 48% since October 2019. With contractor costs inflated above the rates of demand, all indications are that the costs of employing contractors are increasing due to individuals being able to command higher rates in a tough skills climate.

Ann Swain, CEO of APSCo, commented: “The contract labour market has been heavily relied on as skills shortages remain rife. With talent in increasingly short supply since Brexit and Covid, temporary staff have been hugely valuable in filling gaps. However, what we’re also seeing is a further reliance on these individuals in an uncertain market where fewer businesses are confident in committing to permanent increases in headcount. The spike in contract sales revenue does show the level of fees contractors are able to command in such a skills short market. While we fully expect rates to increase in a cost-of-living crisis, the pre-Covid comparisons show a significant increase which is being driven by more than just the economic climate.”

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Microsoft, Salesforce, Meta and Twitter make mass staff cuts

Big names in Big Tech are letting go of staff at what is said to be the most dramatic cull in tech sector history. Meta has laid off more than 11,000 employees thereby reducing its headcount by around 13 percent, while Microsoft announced at the end of October that it’s laying off around 1,000, with numbers still to be confirmed. Elon Musk led the charge, however, by laying off around half of its workforce when he took control of the social media platform on October 27. This, in a bid to run a financially healthier business by taking it private and enhancing his unilateral power as CEO.

Salesforce has joined the avalanche with an announcement of 2,500 redundancies in the US, with the jury still out on whether or not the mass layoffs will reach UK shores.

Meta, the social media giant, is battling falling revenues and rising competition despite reporting profits in excess of £23 billion. Chief Executive Mark Zuckerberg emailed employees on Wednesday morning informing them of the redundancies.

He said: “I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.” Zuckerberg said revenue growth experienced during the pandemic had not been sustained, ad performance was down, and ecommerce had declined, all in an environment of economic downturn.

He added: “[These factors] caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.” Despite drops in share prices and apprehension around Zuckerburg’s Metaverse development, he has said that investment in Real Labs will continue.

Why? the industry is asking. Since the pandemic, the tech industry has seen an explosion of use of and investment in tech, probably since Facebook’s arrival 18 years ago. The result of rising inflation and reduced revenue seem to be the main reasons for the slew of mass redundancies, even in the face of reporting massive revenue over the last year.

Ken Brotherston, TALiNT Partners CEO said: “First of all, it’s only the most dramatic cull in tech history if you’re under 40. The dot com reverse was quicker and deeper in percentage terms but, of course, that isn’t any comfort if you are one of the people affected. What might offer some succour however is that we still have a pretty robust employment market with a lot of the skills previously valued by these big tech firms still in high demand from lots of other employers.”

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The redundancies equate to 13% of Meta’s headcount

Meta has laid off more than 11,000 employees thereby reducing its headcount by around 13 percent, in the most dramatic cull in its history. The social media giant is battling falling revenues and rising competition. Chief Executive Mark Zuckerberg emailed employees on Wednesday morning informing them of the redundancies.

He said: “I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.” Zuckerberg said revenue growth experienced during the pandemic had not been sustained, ad performance was down, and ecommerce had declined, all in an environment of economic downturn.

He added: “[These factors] caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

Michael McCartney, Employment Partner at Fladgate commented: “Meta’s announcement that it plans to make significant job cuts in response to the current macro-economic environment comes very soon after similar cuts were imposed by Elon Musk following his purchase of Twitter, demonstrating that there is a real impact on advertising revenues in the social media sphere. It would be surprising if either company adopted the approach P&O Ferries deployed recently when it sacked 800 seafarer without prior warning. This is because UK employment law requires an employer to consult with elected representatives (or Trade Unions if there are any recognised) for a minimum period of 30 days, where it envisages 20 or more redundancies and, for at least 45 days, if that number exceeds 100 redundancies. The company is also required to send a notice called an HR1 form to the UK government and if it fails to do this, its directors run the risk of criminal liabilities.

Social media firms (even more so than a travel company) are bound to be conscious of the negative publicity for any failure to comply with employment laws even if the financial penalty (which amounts to 13 weeks’ pay per employee) alone is not enough of a disincentive.”

Florence Brocklesby, Founder of Employment Law Specialists Bellevue Law also commented: “Redundancies are, sadly, a fact of life, and delivering difficult news is never easy. But how a restructuring is conducted is hugely important, not only for those leaving the business, but also for those who remain and the company’s wider reputation. Good processes combined with humanity are key to navigating a challenging time safely and with dignity.

“Twitter’s handling of its current restructuring has shone a light on how redundancies in the tech sector should – and should not – be handled. Just a few days ago Twitter announced plans to let go of 50% of its staff, with swathes of employees finding themselves suddenly locked out of company systems. Meta needs to avoid making those same mistakes today.”

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50% of organisations considering practical training for financial planning in cost-of-living crisis

Research* from DeltaNet International has shown that learning and development professionals believe mental health and wellbeing is the most important eLearning topic for the next 12 months.

In a close second came stress management training for employees, with nearly nine in 10 (88%) employers saying they are worried about how the cost-of-living crisis is affecting employees.  

These areas are ranked as more important than diversity and inclusion, cybersecurity, health and safety, and sustainability training.  

Half of those surveyed (50%) revealed that their learning and development budgets would not change despite the current economic climate putting increased pressure on businesses to support employees further with one in five (21%) stating that a reduction in their budget would be one of the biggest challenges affecting learning and development in the workplace. 

Regarding specific training to help employees navigate the cost of living, almost two-thirds (65%) said this isn’t something they have yet given. But half (50%) are considering implementing practical training such as financial planning.  

The results also revealed an underinvestment in training line managers. Just 27% of L&D professionals said they plan to provide line managers with training linked to the rising cost of living, such as helping managers to spot the signs of those in their teams who may be struggling. 

Chris Chappell, Head of Content at DeltaNet International, said: “Given the current economic situation we find ourselves in, it’s unsurprising that mental health support and stress management are topping the agenda for learning and development priorities.  

“Businesses must support colleagues as best as possible to maintain a contented and productive workforce, but many still have not acted. Whilst good rates of pay and benefits schemes are key to helping people through the cost-of-living crisis, there is much more we can do to support employees, and training plays a key role in this.” 

Employee engagement with L&D also remains a big challenge. 27% of those surveyed revealed this is currently their primary obstacle. Most HR and training professionals are trying to overcome this by asking employees for written feedback on training, with 77% conducting post-training evaluation – only 12% request verbal feedback. 

 

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68% said focus on hard skills may cost candidates chance of being offered the job

Global recruitment company, Michael Page, has revealed that soft skills are as important as technical skills and qualifications in the interview process in determining the candidates’ success.

One thousand people involved with hiring were canvassed, and the findings highlighted the increasing need for prospective talent to show their willingness to learn and show flexibility.

The unexpected soft skills that are most sought after include selflessness, a sense of humour, and the ability to admit when you don’t know something. Sixty-two percent said they have hired someone who has demonstrated a range of these soft skills even up against better-qualified candidates.

Of those surveyed:

  • 63% felt that candidates focussed too much on their hard skills and qualifications and not enough on their human side when preparing for an interview.
  • 68% claimed that this focus may cost candidates their chance of being offered the job.
  • Half agreed that a willingness to develop their skills for the future is a key factor when deciding between two candidates.

The increasing demand for soft skills and emotional intelligence is evident even in highly technical industries such as technology and transformation.

In looking at the interview process, it was discovered that:

  • 51% favoured face-to-face interviews.
  • 74% of those who preferred in-person interviews agreed that they can get a better feel for the person this way. A further 61% said that the conversation flows more naturally.
  • Of those who preferred video interviews, 74% felt that the process allows them to speak with applicants from further afield, increasing the pool of talent.

Doug Rode, UK&I Managing Director at Michael Page, said: “The pandemic really drove home the importance of soft skills and taught businesses how crucial it is to invest in a workforce that possesses more than just technical ability.

“Now, with a turbulent economic landscape impacting businesses across the country, attributes such as a willingness to learn, flexibility and a sense of humour are all highly desired by hiring managers who know that personal qualities can impact a company’s overall success.

“Too often, candidates talk themselves out of applying for a certain job because they worry they don’t have every single skill, but this research clearly shows that employers are willing to overlook that for the right candidate. It’s easy to upskill once someone is in role, but traits like teamwork, empathy and friendliness are crucial attributes that you can’t necessarily teach.”

“Over the past few years, technology has fundamentally changed the traditional recruitment process – particularly through virtual interviewing. One of the key benefits of this is that companies are able to widen the net to secure talent from further afield, increasing diversity and creating opportunities for previously untapped talent pools.

“However, whether virtual or in person, interviewers will be keen to get a sense of the soft skills candidates can offer their business. The most successful will be those who are able to showcase a blend of both – pairing expertise and qualification with emotional intelligence too. Now, more than ever, demonstrating the desire to develop and futureproof their skills, being willing to learn and able to solve problems will give most candidates an edge over purely technical ability.”

James Barrett, Managing Director at Michael Page Technology, said: “Technology is always evolving, meaning roles are constantly coming to market which require completely new skillsets. This means that qualifications can quickly become outdated, and, in some cases, the qualifications don’t even yet exist. This makes it more important than ever to hire talent who are curious, willing to learn and develop and embrace change.”

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Tech companies were responsible for the highest number of redundancies in September

According to GlobalData, around 90 companies announced layoffs in September 2022, which is a considerable increase from the previous month. The data and analytics company’s News Database notes that this reduction in labor is a result of negatively impacted business sentiment amid cost cutting, high operating expenses, and the current economic crisis.

According to GlobalData’s Job Analytics Database, the number of jobs available for application (‘active jobs’) continued to fall in September 2022, as the pace of job closures and removals from career pages (the ‘jobs closure rate’) was higher than the rate of new job postings. The research also indicates that many companies are planning to restructure or realign their businesses, which could result in employees being laid off. In September 2022, companies that laid off employees as part of a restructuring strategy included Netflix, Meta, Wipro, HCL, Twilio, Credit Suisse, and Snap.

Furthermore, according to GlobalData’s latest report, ‘Global Hiring Activity – Trends & Signals Q3 2022’, over 300 companies announced layoffs during the quarter ending September 22.

Sherla Sriprada, Business Fundamentals Analyst at GlobalData, commented: “Of particular interest is Meta, which announced both a hiring freeze and team restructuring to reduce expenses and realign objectives. The company’s job postings fell by 23% in September 2022 over January 2022.”

Rachel Foster Jones, Thematic Analyst at GlobalData, said: “Meta’s headcount shows no sign of increasing this year. The company, like much of Big Tech, is trying to cut costs as it grapples with a weak advertising environment and a tough macroeconomic climate. This is the tip of the iceberg for Meta. Meta is also facing fierce competition with Tiktok, regulatory hurdles and an incredibly costly and currently unprofitable metaverse ambition. Meta cannot afford to cut its hiring freeze short.”

GlobalData’s research indicates that technology companies were responsible for the highest number of layoffs in September. For example, tech company Twilio, as part of its restructuring strategy, laid off 11% of its workforce. The company’s job postings also fell by 72% during the same period.

The banking & payments industry was another key sector affected by layoffs.

Sriprada continues: “Credit Suisse laid off 5,000 employees as part of a restructuring plan, with the company’s job postings falling by 32% in September 2022 over January 2022. Meanwhile, the Goldman Sachs Group laid off 25 investment bankers in Asia. However, job postings rose in India (22%), Singapore (16%), and Hong Kong (8%) in September 2022 over January 2022.”

In the retail industry, Rent the Runway is planning to restructure, which will involve streamlining its organizational structure and increasing operating efficiencies. The company also witnessed a drop of 74% in job postings in September 2022. Other companies experiencing the strain include The Gap, PVH, and Wayfair.

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Hires and quits decrease

US job openings rose 4.3% in September from August, and they were up 0.4% year over year, according to data released today by the US Bureau of Labor Statistics. However, the number of hires fell and fewer people quit their jobs in September.

Julia Pollak, Chief Economist at ZipRecruiter said: “The JOLTS report says that job openings rose to 10.7 million, but other measures in the report suggest the labor market is cooling. Hires fell from 6.3 million to 6.1 million and quits from 4.2 million to 4.1 million.”

Hires were down 4.0% in September compared to August and were down 6.5% year over year.

The number of quits — which are included in separations and are voluntary on the part of employees — fell by 2.9% from the previous month and were down 4.5% year over year.

Layoffs and discharges fell as well by 10.9% from the previous month and by 5.5% year over year.

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