Tag: Inflation

Government and healthcare workers amongst the most concerned

With the cost of living constantly increasing and real UK wages falling at the fastest pace on record, making ends meet is a priority for many workers.

Research from Glassdoor reveals that 22% of UK workers are concerned about finding a job that supports the cost of living at the moment and that anxiety around this issue is on the increase.

An analysis of words used on Fishbowl by Glassdoor showed that mentions of “cost of living”,

“inflation”, “rent”, “petrol”, “accommodation”, and “bills” have increased by 67% year-on-year.

Over 700,000 Glassdoor reviews by UK-based employees were examined. The data revealed that negative mentions of “salary”, “pay”, and “compensation” increased by 16% since 2020.

The biggest increase in salary complaints was among government workers – up 26% from 2021. In the past, these workers were less inclined to discuss salary negatively. But, with public sector wage growth falling far behind the private sector, this is no longer the case, indicating a possible future exodus of government workers. Similarly, complaints about salary have also increased among healthcare workers.

On the opposite side of the spectrum, employees in the hospitality industry(restaurants, food service, travel, and accommodation) have seen unusually high pay growth, and salary complaints have dropped.

Lauren Thomas, Glassdoor’s EMEA Economist, said: “The only constant in 2022 is change -and skyrocketing prices. Even with high wage growth and a tight labour market, workers are feeling the pinch as inflation emerges as the biggest winner. With real wages falling a record 3.0 percent thanks to inflation, the cost of living is a priority for many job seekers.

“Job vacancies, which have hit record highs month after month, have started to fall but even now employers can’t rest easy. Hiring will remain difficult, particularly in industries like hospitality and healthcare where employees’ Glassdoor reviews show they feel overworked and underpaid.”

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Workers taking on second jobs to pay for essentials

Even though a tight labour market has pushed wages up across the board, the increase has not kept pace with inflation. A recent article on MSN has reported that this is forcing workers to increase their hours and look for second jobs to pay for essentials such as gas, food, and rent.

According to a report from the St. Louis Federal Reserve, it was revealed that the percentage of people working multiple jobs in the US has increased from 4% to 4.8% since March 2020.

Usually, taking on multiple jobs signals a healthy job market with plenty of job opportunities available, but the report suggested that it also signals increasing financial strain on Americans’ pocketbooks.

Ken Brotherston, CEO at TALiNT Partners commented: “This is the real gig economy. The vast majority of second jobs are not ‘cool side hustles’ they are the difference between being able to pay you rent or not and are another signal that employment for many people is precarious.” 

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Inflation is being considered or accounted for in annual pay raises

According to a report by the Society for Human Resource Management, HR professionals are worried about inflation along with their employees. The report found that 73% of HR professionals are worried about the impact of inflation on workers.

Johnny Taylor Jr., President and CEO of SHRM commented: “Employers recognize that inflation has a major impact on the well-being of their team. In fact, SHRM research found that 87% of those worried about inflation said their highest concern was the effect on the lives of their employees.”

Of HR professionals aware of their organizations’ plans for annual pay raises, 63% said inflation is being considered or accounted for in annual pay raises.

HR professionals at smaller firms with less than 100 employees were most concerned about inflation, with 81% citing concerns.

The percentage was 74% at midsize firms with 100 to 499 employees and 67% at large firms with 500 or more employees.

Industries where HR pros were most concerned about inflation were agriculture, 97%; wholesale trade, 95%; utilities and energy, 82%; and manufacturing, 82%.

SHRM’s research included a survey of 1,150 HR professionals and took place from May 10 to May 24.

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Inflation top reason for diminished confidence

According to the National Federation of Independent Business’s (NFIB) report, Small Business Optimism Index fell in June to its lowest level in nearly a decade, reflecting poor expectations for the remainder of the year.

The organization’s optimism index dropped to a level of 89.5 in June, down 3.6 points from May. This is the sixth consecutive month when the index has fallen below the 48-year average of 98.

It was also reported that small business owners who were expecting better business conditions over the next six months fell seven points to a net negative 61%, the lowest level recorded in the 48-year survey.

According to according to the NFIB, inflation continues to be a top concern for small businesses, with 34% of owners citing it as their most important issue in operating their business, the highest level since quarter four in 1980.

Other key findings include of the Small Business Optimism Index:

  • The net percent of owners who expect real sales to be higher decreased by 13 points from May to a net negative, 28%
  • 50% of owners reported vacant job openings, down one point from May but historically high
  • The net percent of owners raising average selling prices decreased three points to 69%, following May’s record high reading
  • Separately, NFIB’s monthly jobs report revealed owners’ optimism to fill open positions, with 19% planning to create new jobs in the next three months
  • The NFIB survey was conducted in June and includes data from randomly drawn respondents through its membership.

NFIB Chief Economist Bill Dunkelberg commented: “As inflation continues to dominate business decisions, small business owners’ expectations for better business conditions have reached a new low. On top of the immediate challenges facing small business owners including inflation and worker shortages, the outlook for economic policy is not encouraging either as policy talks have shifted to tax increases and more regulations.”

 

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VC-backed companies under pressure with bleak macro-economic and geo-political outlook

Swedish “buy now, pay later” company Klarna has announced its intention to lay off 10% of its global workforce in a pre-recorded video message. Klarna CEO Sebastian Siemiatkowski cited “the war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession” as the reasons for the layoffs.

This news comes off the back of a report which emerged last week, stating that the Swedish company’s valuation fell by 30% from the $45.6 billion valuation it received last June.

Even with the decreased valuation and layoffs, Siemiatkowski reassured employees that “Klarna continues to hold a strong position in the market” and says he remains “relentlessly optimistic about Klarna’s future.

BNLP businesses boomed at the start of the pandemic, where lockdowns meant that customers had little else to do with their time but shop.

More than two years on, however, luxuries are just not in the budget of many consumers, and clearly, retailers are feeling the pinch. With ever-increasing fuel costs, utilities rising by 50%, NHI contributions increasing, food prices rocketing, and inflation expected to reach more than 10% by year-end, consumers are tightening their belts. BNLP businesses, such as Klarna, have insights into these sentiments, with their product being used by 17 million people in the UK.

Klarna is not alone in its troubles. Grocery delivery start-up, Gorillas, has also recently announced its intentions to cut 300 jobs – around half the employees at its Berlin headquarters. Gorillas are also looking at pulling out of Italy, Spain, Denmark, and Belgium. According to a TechCrunch report, the company has a large debt to suppliers, with a burn rate of $50 million to $75 million.

More venture capital-backed companies will likely announce layoffs and hiring freezes as they prepare for tough times ahead. Layoff tracker, Layoff.fyi reported that in Q2 of 2022, over 13,000 tech start-up employees had been let go.

Other casualties of the current negative macroeconomic outlook include AI start-up BeyondMinds, which recently closed its doors, and healthtech business Kry’s reduced its team by 10%.

Siemiatkowski admitted that Klarna’s decision to reduce numbers was one of the “hardest” decisions in their history but a necessary move to stay “laser-focused on what really will make us successful going forward.”

“While crucial to stay calm in stormy weather, it’s also crucial not to turn a blind eye to reality,” he added. “What we are seeing now in the world is not temporary or short-lived, and hence we need to act.”

Ken Brotherston, TALiNT Partners CEO also made comment: “The US and European tech markets are very turbulent, inflation is high and the war in Ukraine and ongoing supply chain issues in China all create a perfect economic storm. The impact on employment/hiring is less clear as there are structural shortages in many markets but it’s clear that buyers are spending less and this results in diminished demand for retail staff.”

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Can employers help by scrapping outdated payday cycles?

According to a recent survey over 2,000 British people, one in four people are skipping meals over their rising cost of living worries.

With inflation at record highs, and increasing financial pressure, especially on ‘lower income’ workers, employers are urged to scrap outdated payday cycles which exacerbate stress.

Steve Tonks, SVP EMEA at WorkForce Software commented: “48% of the UK population frequently feel monetary stress, with financial anxiety being a leading cause of poor mental health for three fifths (60%) of employees – with the rising cost of living soaring it is no surprise that the fear of food poverty is growing. With grocery price inflation reaching 5.9 per cent, the highest level since December 2011, it is inevitable that the most affected by these hikes will be low-wage, hourly workers – many of whom are frontline.”

“For these employees, lunar pay cycles can be a particular pressure point– as there can be up to eight weeks of elapsed time between when hours were worked and when payment is received. As a result, many workers are forced into high-interest payday loans to make it through the month- an issue that is only being exacerbated by rising inflation.”

“Earned Wage Access (EWA) is a simple yet highly effective way to improve the employee experience, while helping workers to better manage their finances both in the short and long term.”

“Employers have a responsibility to help break outdated pay cycles, now more than ever. But, EWA shouldn’t just be a ‘nice-to-have’ during times of economic upheaval. Instead, it should be viewed as a long-term CSR goal for organisations, supported by ongoing education and advice on money management.”

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Employers’ confidence in the UK economy declines as inflation reaches record highs

New data from the Recruitment and Employment Confederation (REC) JobsOutlook survey advises of a decrease in employers’ confidence in the UK economy during the first quarter of 2022 as inflation numbers reach their highest levels in 30 years.

Although the measure of business confidence increased slightly in January, it soon fell back to the same levels as those in the final quarter of 2021.

But despite the decreasing confidence, most employers are still positive about their ability to hire. The survey found that UK businesses’ confidence in hiring was at net: +8 (1% lower than in the last quarter of 2021).

According to the survey, employers’ intentions to hire permanent workers have significantly increased by 9% over the past three months, despite the negative economic outlook. However, these intentions may be due to the current challenges in filling vacancies.

More findings from the survey include:

  • Medium-term hiring intentions rose by 7%
  • Quarter-on quarter, hiring intentions for temporary agency workers remained positive even though the numbers declined by 14% in the short term and 8% in the medium term.
  • In March, 18% of employers said that the increase in National Insurance contributions would reduce their ability to invest in their business.
  • 15% of employers said that the National Insurance contributions would discourage the creation of new roles.

Neil Carberry, Chief Executive of the REC, commented: “Businesses are seeing tax rates and uncapped energy costs rise, as well as pressure on salaries from staff who are seeing their own bills go up. So it is no surprise that firms are more concerned about the outlook. But British firms are resilient and investment in staff and growth remain on the agenda when employers think about their own business. We expect to see employers’ hiring plans decouple further from their economic outlook over the coming months as they face a tight labour market. Firms will need to find new, creative ways to attract candidates, as well as keep hold of the talented staff they have. Recruiters will play a vital part in helping them to do so.

“More employers are switching their hiring intentions towards permanent staff, as the urgent need for contingency staff to cover Covid absences decreases. But temporary workers remain vital to managing uncertain and fast-changing markets.”

All indications are that resilient British companies remain intent on growing despite a negative economic outlook.

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75% of employees feel salaries should increase in line with inflation

A recent study by Insight Global, a staffing firm, has revealed that 66% of American workers are concerned they will need to look for a higher paying job in order to keep up with inflation.

The survey took place in March and included 1,005 US workers who are employed full time.

The rise of inflation is also prompting some workers to ask their bosses for flexibility to work from home to save on fuel costs. The survey found that 26% of workers who said they are seriously considering looking for a new job also plan to ask that they be allowed to work from home with 24% of those already working remotely planning to continue doing so most or all of the time until gas prices go down.

Overall, 75% of workers believe employers should increase pay during economic inflation.

Bert Bean, CEO at Insight Global commented: “Leaders need to get ahead of this curve before they see some of their greatest talent leave to explore other career opportunities. The simplest way to ensure your employees are content in their current roles is to ask them. Find out what they need — is it a raise, the ability to work from home or are they feeling disconnected?”

Other findings in the survey included:

  • 56% of American workers feel there are many job openings, but few job opportunities offering pay that can keep up with the rising cost of living.
  • 61% of workers who say they are seriously considering looking for a new job feel there are many job openings, but few job opportunities offering pay that can keep up with the rising cost of living.

Flexible working remains key in navigating the skills shortage crisis as employees will continue to look for roles that offer flexible and support during turbulent economic times.

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