YOUR REGION: United States

Tag: Economy

Sonovate launches platform to enhance offering for large, multinational recruitment firms

The organisation has lent over £3.5 billion to 3,300 businesses since 2014

Sonovate, the provider of embedded finance and payment solutions for the contingent workforce has announced an enhanced funding technology platform to enable it to better serve large, multinational recruitment businesses and launch new lines of products in the future as it continues to grow and expand its customer base.

The new platform gives customers the ability to optimise cash flow, allowing them to access funding in multiple-currencies and across multiple-sectors, with tailored pricing based on the risk profile of the industry being served to allow customers to secure the best possible rates. It also provides enhanced operational efficiencies with far faster onboarding, meaning funds can be accessed in a matter of days and firms can offer access to the liquidity that their clients need, while still offering attractive terms.  

Customers are able to view multiple ledgers across the new platform, whether they’re obtaining funding for invoices related to permanent or contract workers, or different subsidiaries of their business. Multi-ledger access also ensures that reporting requirements are quickly, easily, and consistently fulfilled both internally and in line with local market regulation. 

The enhanced capabilities of the new platform – particularly the accuracy of reporting, speed of reconciliation, and highly-scalable funding – will empower Sonovate to increase the number of large, enterprise-size customers that it serves.  

It follows a recent announcement that Sonovate is partnering with HR platform, Deel, to become the only funder to serve its global customer base. The partnership highlights the trend for recruitment businesses to operate in multiple markets as flexible and remote working becomes the norm for organisations across the world. 

Following a securitisation deal with BNP Paribas and M&G Investments, which added £165 million to Sonovate’s funding structure, it has already made strides in expanding the number of enterprise size customers it serves. The introduction of the new platform marks a step change for the organisation and will accelerate its growth trajectory over the course of 2023, particularly as it enters new markets including the Netherlands.  

Richard Prime, Co-CEO and Co-Founder, Sonovate, commented: “In uncertain economic times, ensuring a stable cash flow for a rapidly growing organisation can be challenging, even more so when operating in multiple markets. At Sonovate, we take ownership of that challenge on a customer’s behalf, providing them with the fast, flexible funding they need to grow and succeed. 

“Over the past few years there has been a mass global movement towards flexible working – be that remote or hybrid, contract, freelance, or part-time. Societal change has taken place, and now technology must keep pace. Traditional bank funding is often limited by cumbersome legacy systems that simply aren’t agile enough to quickly respond to the changing world of work and needs of rapidly growing, multinational recruitment businesses.  

“Fintech is different. Our entire offering is built around the changing needs of our customers, and this new platform is designed to grow and evolve with our customers as they enable the flexible future world of work across the world.” 

Since it started funding in 2014, Sonovate has lent over £3.5 billion to 3,300 businesses and 40,000 workers in 44 countries, and increased its revenue by over 51% from 2021 to 2022.  

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97% of entry-level US workers feel impacted by cost-of-living crisis

US executives feel they have not been paid fairly in-line with inflation

A 2023 Job Market Survey has examined the state of employment in the United States – highlighting the growing economic concerns between lower and high wage earners.

The survey, commissioned by the Professional Resume Writers (PRW), interviewed a cross-section of 2000 people of which 92% were employed and 59% had a college degree,

Overall, the survey revealed concerns about job security has increased by 49%, however, for those at entry-level, the percentage leaps to 91%. Working from home has impacted employees significantly, based on their level within the organisation – a concern for entry-level employees, but with no impact at the executive level.

Key survey findings:

● 66% of executives are worried about job security in 2023. The highest of any of the levels surveyed.
● Worry about job security has increased by 49% but, for those early in their careers their worry increased 91% over last year with nearly half of entry-level workers reporting being worried about job security in 2023.
● 21% of workers said that job security has been impacted by working from home
● 97% of Entry-Level workers feel like they have been impacted by the rise in cost of living
● Executives feel they have not been paid fairly in-line with inflation
● 6 out of 10 people are looking to change careers
● Worry about job security has increased by 111% for those with bachelor degrees

Michelle Masters, co-founder of Professional Resume Writers, said: “It’s not surprising that people are concerned about their job security, given the current economic climate. It’s important for professionals to take proactive steps to maintain their employability, such as staying up-to-date on industry trends and continually honing their skills. Additionally, individuals who are considering a career change should focus on their transferable skills and how they can be leveraged in a new field.”

For further information: (https://professionalresumewriters.com/job-market/)

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67% of US adults anticipate a recession at the end of the year

US Adults Brace for Economic Recession

According to the recently released “Planning & Progress Study” by Northwestern Mutual, approximately two-thirds of US adults, accounting for 67% of the population, hold the expectation that the economy will slip into a recession later this year.

Among those who foresee a recession, 33% believe it will be a short-lived downturn lasting a year or less, while 19% anticipate a more prolonged period of economic decline extending beyond two years. The study also revealed that three out of four individuals who anticipate a recession expect it to significantly or moderately impact both their immediate and long-term financial situations, with figures standing at 78% and 75%, respectively.

In response to the economic uncertainty, the study highlights the top three actions being taken by individuals to address the situation. These include implementing cost-cutting measures (64%), building up savings (50%), and deferring major expenses until the economy stabilizes (41%).

Christian Mitchell, the Chief Customer Officer at Northwestern Mutual, emphasized the importance of using uncertain times to evaluate and test financial strategies. He stated, “Consumers want assurance that their plans for wealth accumulation and lifestyles will remain intact even if the economy experiences a setback. Many are proactively preparing for any potential economic challenges that may arise.”

Furthermore, the report’s survey indicates that 60% of Americans are postponing their plans and purchases due to economic uncertainty. Additionally, 36% are delaying everyday expenditures such as dining out, buying new clothes, and attending events. The study also found that 29% are putting off significant purchases or projects such as home renovations or buying a new vehicle.

The survey involved 2,740 US adults aged 18 or older and was conducted online by The Harris Poll between February 13 and March 2.

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Tech occupations across economy fall by 99,000 in April, but message is mixed

Mixed signals in tech job market for April

CompTIA has analyzed the US Bureau of Labor Statistics job data from April and found that the number of tech occupations decreased by 99,000, resulting in an increase in the unemployment rate for tech occupations to 2.3%. However, the report also showed that tech sector companies increased staffing by 18,795, marking the highest monthly hiring volume since August 2022. Despite the decrease in tech occupations, there was continued demand for tech talent, as employers listed over 300,000 job postings for tech positions in April. The IT services and custom software development sectors led the hiring pace, followed by cloud infrastructure, data processing, and hosting. The job postings for tech positions were dispersed geographically and across various industries, with the highest volumes occurring in administrative and support, finance and insurance, and manufacturing sectors, and in metropolitan markets like Washington, New York City, Dallas, Los Angeles, and Chicago. Furthermore, the number of tech job postings specifying remote or hybrid work options rose to more than 65,000 positions across the US. The Chief Research Officer at CompTIA, Tim Herbert, stated that the April job data showed mixed labor market signals. The strong employment gains in the tech sector were offset by the pause in tech hiring across the economy.

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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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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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New study reveals best countries for launching a startup

European countries lead the way for quality of life

Business Name Generator has analysed 50 countries to reveal the best places to launch a startup. The study looked at; business tax rates, economic GDP growth, cost of startup procedures, country happiness, cost of living and quality of life.

Economic uncertainty may unnerve budding entrepreneurs, so knowing about the global landscape when starting or expanding a startup is critical.

The top 10 locations in the world to start up a business in 2023

  • The Czech Republic was the top country for startups – with low cost of starting a business and procedures costing just 1.1% of Gross National Income (GNI) per capita, combined with reasonable labour costs averaging £1,478.
  • The UK ranks sixth in the index, beating all other G7 countries, including the US and Germany. The UK is the only country where business startup procedures don’t cost a penny.
  • Germany, France and the US position outside of the top 10. The States placed 17th with startups expected to pay an average tax of 25.8% on capital generated.

Other key findings:

  • The Netherlands has the best quality of life rating out of every country in the ranking, with a score of 198 out of a possible 240.
  • Finland has the highest labour costs – but the happiest employees, scoring 7.84 out of 10, higher than any other country in the world.
  • Sweden placed third, with slightly lower labour costs of £3,531, but still relatively inexpensive start-up procedures at 0.5% of GNI per capita. However, business tax in Sweden is higher at 20.60%.

The Philippines is revealed to be the worst country in which to start a business. The cost of launching a startup is the highest among all the countries analysed, totalling 23.3% of GNI per capita. Businesses are also taxed at a higher rate of 25%.

Egypt comes in second place as the worst place to launch a startup. Despite the availability of low-cost labour, India ranks lowest in terms of happiness and quality of life, with a score of only 3.81 and 118.4. This could greatly impact job satisfaction, productivity, and overall well-being in the workplace. Additionally, the country’s 30% business tax rate may offset some of the savings gained from affordable labour.

Europe leads in terms of happiness and quality of life. However, when it comes to the cost of living, Egypt, India, and Argentina come out on top.

Chloe Chai, the spokesperson for Business Name Generator said: “Entrepreneurs face many important decisions when launching or expanding their business and choosing the right location is one of the most crucial. The location of a business can have a significant impact on its success, affecting access to resources, market demand, and competition. Entrepreneurs must carefully consider the economic, demographic, and cultural factors of potential locations.”

Research data can be found at: https://businessnamegenerator.com/the-global-startup-index/

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Economic outlook slightly more optimistic but fragile

OECD forecasts growth with downside risks.

The Organisation for Economic Co-operation and Development (OECD) has released its latest Interim Economic Outlook report, projecting global growth to reach 2.6% in 2023 and 2.9% in 2024. The report attributes this positive outlook to improved business and consumer confidence, falling food and energy prices, and the reopening of the Chinese economy.

In terms of inflation, the report forecasts a gradual decrease in headline inflation through 2023 for most G20 countries. This is due to tighter monetary policy, declining global food prices, and lower energy prices following a mild European winter. However, the OECD cautions that core inflation remains persistent due to rising service prices and labor market cost pressures. As a result, many central banks will need to maintain high policy rates until 2024 to manage inflationary pressures.

Annual GDP growth in the euro area is projected to be 0.8% in 2023, but is expected to increase to 1.5% in 2024 as the drag on incomes from high energy prices subsides. Meanwhile, growth in China is expected to rebound to 5.3% this year and 4.9% in 2024. In the US, annual GDP growth is projected to be 1.5% in 2023 and 0.9% in 2024, as monetary policy moderates demand pressures.

OECD Secretary-General, Mathias Cormann stated that while the outlook is slightly more optimistic than previous forecasts, the global economy remains fragile. Risks to the outlook include persistent large-scale energy and food market disruptions, Russia’s war against Ukraine, services inflation, financial market turbulence, and the steady decline in underlying growth prospects. Cormann emphasized that targeted fiscal support and structural reforms will be crucial for optimizing the recovery and long-term growth prospects.

The OECD warns that the improvement in the economic outlook is still in its early stages, and risks remain tilted to the downside. Uncertainty about the course of the war in Ukraine and its broader consequences is a key concern. The report notes that monetary policy changes could continue to expose financial and banking sector vulnerabilities and make it more difficult for some emerging market economies to service their debts. Additionally, global energy market pressures could reappear, leading to renewed price spikes and higher inflationary pressures.

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Q4 GDP growth lowered slightly

The revision was primarily due to lower levels of exports and consumer spending

The US Bureau of Economic Analysis has released its third estimate, stating that the country’s real gross domestic product grew at an annual rate of 2.6% in the fourth quarter of 2022, down slightly from the previous estimate of 2.7%. The revision was primarily due to lower levels of exports and consumer spending. The increase in GDP reflected higher levels of private inventory investment, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending, partially offset by a decrease in residential fixed investment and exports. The Wall Street forecasts suggest that the US economy could see a similar growth rate in Q1 2023, as hiring and consumer spending have been stronger than expected, which could ease concerns of a potential recession. In the meantime, imports, which are deducted from GDP calculations, decreased in the fourth quarter. In Q3 2022, GDP growth was 3.2%.

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Job seekers remain optimistic despite looming recession

Job seeker confidence higher than during the Financial Crash

There is a recession looming, and the tough economic environment is impacting pay and macroeconomic confidence. Yet, despite this, employees and job seekers remain surprisingly optimistic about their job security and career prospects. This is according to the newly released Robert Half Jobs Confidence Index (JCI).

The new index was created in association with the Centre for Economics and Business Research and revealed that while the JCI fell in Q4 2022 to stand at 19.9 – down 7.5 points from Q3 2022 (27.4) – it is up 58.1 points from Q2 2009 during the global financial crisis.

With confidence increasing significantly compared to the last pre-pandemic recession, UK employers are facing a far more challenging talent landscape this year.

The report also suggests that despite consumer confidence and macroeconomic business confidence being affected by the government instability in the third and fourth quarters of last year, employees and job seekers remained optimistic about their job security, job search, and career progression prospects. This confidence likely originates from the tight labour market, with many companies struggling to hire workers with the right skills.

The data revealed that the job security confidence pillar of the index is up by 159.4 points compared to the final quarter during the recession of 2009.

Despite worries around the cost-of-living crisis and the downturn in real wages since 2009, the index points to remuneration optimism, with pay confidence increasing during the last quarter – a jump of 28.4 points, even though the pay confidence pillar of the index was in in the negative in Q4 of 2022.

Confidence surrounding job search, career progression, and remuneration is on an upward trajectory – an unusual sentiment during economic uncertainty. Despite this, Robert Half has warned that businesses will face an uphill battle for talent. Similarly, companies that decide to cut back on staff will struggle to replace them when necessary.

Matt Weston, Senior Managing Director UK & Ireland, at Robert Half, commented: “There’s no shying away from the fact that whilst the UK economy is facing challenges ahead, however our Job Confidence Index doesn’t paint the picture of labour confidence doom and gloom that one may expect as we head towards a recession. The fact that our data reveals that employees are confident about both their job security and job search and progression prospects suggests that we are going to experience an atypical downturn.

“However, with the complex macroeconomic environment impacting business confidence in recent months, we have already begun to see changes to talent strategies that we predict will continue. Employers have had to be more innovative than ever before when planning and managing human capital, and we expect companies to lean on more agile flexible staffing models, as well as developing permanent employees through upskilling and reskilling programmes.

“One thing is for sure, though, investment in existing workforces, and developing compelling attraction strategies will be crucial to ensure that employers have access to the skills they require in what will continue to be a tight labour market.”

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