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Tag: Cost of living

Minimum wage to rise 5.7% from July amid cost of living crisis

Australia’s minimum wage to increase by AUD 1.20 per pour

Australia’s minimum wage is set to rise by AUD 1.20 (USD 0.79) per hour starting from July 1, 2023, benefiting the country’s lowest paid workers. The Fair Work Commission recently announced a 5.75% increase in the National Minimum Wage, raising the hourly pay rate from AUD 21.38 (USD 14.13) to AUD 22.60 (USD 14.94) for these workers.

Additionally, all modern award minimum wage rates will also see a 5.75% increase, effective from the first full pay period on or after July 1, 2023. Modern awards outline the minimum employment conditions and terms beyond the National Employment Standards (NES), including aspects like pay and working hours.

Despite the wage increase, workers will still experience a real wage decrease due to a 6.8% inflation rate over the past year, as of April. The decision by the Fair Work Commission falls between the 3.8% requested by some business groups, such as AiGroup, and the 7% sought by the Australian Council of Trade Unions (ACTU).

More than 20% of Australia’s workforce receives minimum award rates, while 0.7% earn the national minimum wage, which is the lowest rate. Fair Work Commission president Adam Hatcher acknowledged the challenges faced while making the decision, including declining wages, high inflation, and an anticipated economic slowdown.

In determining the wage increase, the commission considered the impact of inflation on the financial well-being of low-paid workers, as well as the upcoming rise in the superannuation guarantee from 10.5% to 11%. The commission also took into account the effects of a weakened job market on casual employees and relevant industries.

The Australian Chamber of Commerce and Industry (ACCI) expressed concerns about the increase, stating that it would impose an AUD 12.6 billion (USD 8.3 billion) wages burden on small and family businesses. ACCI chief executive Andrew McKellar emphasized the negative implications for the 260,000 small and family-owned businesses that pay minimum and award wages, and he criticized the decision for potentially exacerbating high inflation amid a deteriorating economic outlook.

The wage increase fell short of the ACTU’s desired 7% raise. Sally McManus, the secretary of the ACTU, acknowledged that the increases would provide crucial support to millions of working people during the current cost-of-living crisis. She described it as a critical increase that would help these individuals stay afloat.

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Job confidence remains optimistic – despite sluggish economy

Demands for higher pay puts pressure on corporate budgets

With the Cost-of-Living crisis and rising inflation, business leaders are being warmed by increasing numbers of the UK workforce seeking job security and better pay – making attracting and retaining the best talent challenging.

Recruitment specialists, Robert Half’s  Jobs Confidence Index (JCI)  – an economic confidence tracker produced in association with the Centre for Economics and Business Research (Cebr) every quarter found that, despite a small dip towards the end of last year, the JCI remains in positive territory at 19.9.

The Index also revealed that workers remain confident about their job security, with the search and progression pillar up 1.6 points quarter on quarter. These statistics are indicative of the skills shortages driving up both competition for talent and worker confidence.

  • 7% feel confident about their career and progression prospects in the next five years (in line with the firm’s Candidate Sentiment Survey published earlier in the year, revealing that job seeker confidence is at an all-time high).
  • 47% say they were looking for a new job – up eight percentage points on last years’ figures.
  • 43% of those actively searching for a new role wanted a better salary.

According to Robert Half, employers need to strike the right balance between offering competitive remuneration, progression plans and providing other benefits such as learning and development opportunities – if a sustainable talent attraction solution is to be developed.

Matt Weston, Senior Managing Director UK & Ireland, at Robert Half said: “The high job confidence we’re seeing in the employment market at a time when the economy is sluggish is putting pressure on corporate budgets as higher salaries are increasingly sought. The challenge for employers will be finding the right balance of financial and non-financial incentives to ensure unrealistic pay rises don’t have a detrimental impact on the bottom line. Leaders need to be mindful  that, while they can appease staff and new recruits with modest pay rises, with skills in short supply, competitors could easily poach their most valuable resource. While above-inflation pay rises aren’t sustainable for many firms, another talent exodus could soon be on the cards if retention plans aren’t implemented.”

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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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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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71% of professionals open to returning to pre-Covid employer

Less than 1 in 5 employees have completely shut the door on previous employers 

A  new report highlights the rise of the “boomerang” employees with almost three quarters of professionals open to returning to their pre-Covid employer, with half admitting the reasons why they left are not relevant in today’s market.  

The poll, from recruiter Robert Walters, cites 45% of workers who left their job after lockdown did so for better pay – with a further 35% leaving for a better workplace culture or a more fulfilling role. 

Fast-forward two years and 48% of professionals admit their current employer is no longer meeting their needs, realising the ‘grass wasn’t greener’ – with 24% saying the cost-of-living crisis and hybrid-working fatigue has changed how they feel about their current employment. 

Key report findings;  

  • 71% considering returning to pre-Covid employers  
  • Quarter admit to having already reached out to previous employer 
  • 49% admit original reasons for leaving – purpose, pay and flexibility – are no longer relevant 
  • 48% claim current employers no longer meets their needs in current climate 
  • Quarter admit cost-of-living crisis has changed how they feel about current employer  
  • 82% remain in touch with previous employer – with third saying it is to keep door open 

A quarter of professionals have admitted to reaching out to a previous employer in the past year regarding job opportunities, with a further 11% stating that they have not done so, but intend to this year. Less than 1 in 5 employees have completely shut the door on previous employers, with 18% stating that they keep zero contact with their previous manager. 

Whilst the sentiment may be there from professionals – the same cannot be said for managers – with 44% being hesitant in allowing an old employee back into the team, with just a fifth stating that they would only consider it if they had been an ‘exceptional employee.’   

Toby Fowlston – CEO of global recruitment consultancy Robert Walterss said: “The post-pandemic bounce back saw record numbers of employees leave their job in what was billed as ‘The Great Resignation.’ However, our research indicates the first signs of ‘The Great Regret’ – with 71% of professionals stating that they would like to return to their pre-Covid employer, a mere 18 months after leaving. 

“Across 2021 we saw record pay rises offered to professionals, with promises of an uber flexible and hybrid culture. Come 2023, and these pay rises now pale in comparison to the rising cost of living and inflation – with those new starters who were offered inflated salaries being much less likely to have received a pay increase this year. It appears workers are realising that the grass may not have been greener after all.” www.robertwaltersgroup.com 

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Hospitality sector hit by rising wage demands and supply costs

Demand for UK hospitality workers soars by 46% 

Employers across the UK are struggling to find staff – with the highest number of job vacancies in London, according to a new survey. 

 Research by Indeed Flex, the online staffing platform for temporary work, reveals the biggest jump in demand for warehouse workers was in the North East, seeing a 106% increase in job adverts towards the end of 2022, while Scotland saw a 61% increase.  

With soaring supply costs and rising wage demands amid the cost-of-living crisis, businesses in the hospitality sector are feeling the pinch.   

  • The number of online job adverts for hospitality workers in the North East has more than doubled since 2019. 
  • The UK has seen 46% more job adverts for hospitality staff since the pandemic. 
  • London had the highest total number of job vacancies, with 10,460 positions advertised online in December 2022, an increase of 26% compared to pre-pandemic levels.  

It was hoped that hospitality job roles might be added to the Government’s shortage occupation list, making it easier for businesses to recruit from abroad. However, the Migration Advisory Committee only added construction roles. Recent research from Indeed Flex found 58% of businesses will be turning to temporary workers to support their permanent teams this year. A quarter of HR professionals, whose business already uses temporary workers, expect to increase the use of temps this year. 

Novo Constare, CEO and Co-founder of Indeed Flex, said: “During the pandemic, hospitality was hit the hardest. Many businesses were forced to close for long periods and thousands of people were furloughed or made redundant. The uncertainty in the hospitality sector made many workers seek employment. Unfortunately, not all staff returned. On top of rising costs and stretched budgets, it’s a difficult position for companies to be in and many businesses have come to see temporary staff as a vital resource.”

 For more information, visit  www.indeedflex.co.uk  

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Employees appeal for more empathy during cost of living crisis

UK Workplace Survey Exposes Major Employee-Employer Disconnect

UK-based employees and employers experience a major disconnect in the workplace – leading to a decrease in career progression and productivity, according to a new survey. 

 The data, released by Right Management, as part of the ManpowerGroup UK Hiring Forces and Employers Survey, reveals the impact the cost-of-living crisis has on employees. 

 Key survey findings; 

  • 28% of UK workers wish their managers understood their financial challenges 
  • 26% want managers to understand the impact work has on their mental health 
  • 26% of hybrid workers are less likely to be considered for a promotion 
  • 38% of remote workers are less likely to spend time with senior managers.  

 Health Assured, the UK and Ireland’s largest employee assistance plan (EAP) provider, has seen a 26% increase in the number of urgent calls over the last three years – showing that businesses have to find ways to ensure leaders and managers are proactively encouraging productive conversations around challenging issues.  

  On the back of the survey, Right Management suggests the following steps to create a harmonious workplace:    

 Earn trust 

Businesses need to encourage managers to engage with their employees and build a positive working relationship – this builds up a two-way trust, which is integral to a positive workplace culture. 

 Be honest and open-minded 

When an employee trusts their manager and vice versa, they’re more likely to feel comfortable enough to confide in their manager. 

 Be objective 

With the need for trust and empathy underlined, managers should remember that alongside employee well-being, the best interests of the organisation have to remain a priority. 

 Sarah Hernon, Principal Consultant at Right Management said: “The survey shows a significant number of employees are expecting empathy or support from their employers, without necessarily communicating what they need. 

 Together, these findings suggest several opportunities are being missed, whether that’s opportunities for employees to be open and honest about the challenges they face inside and outside of work, or employers to ensure that remote workers are being considered fairly. 

 The art of conversation is one every leader should master. Managers need to have effective conversations with their people to understand their circumstances better; a higher proportion of the remote workforce are women, often due to parental responsibilities – should they miss out on the opportunity for promotion because of this? Absolutely not.” 

 For more information www.rightmanagement.co.uk 

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Relationship building is the biggest challenge for UK hybrid workers

Half of UK employees would choose great relationships with colleagues over a pay rise

Despite the cost-of-living crisis, 50% of employees would choose great working relationships over a 10% pay increase, and 35% said relationship building is the main problem for hybrid workers.  This is according to HubSpot’s 2023 Hybrid Work Report.

The UK hybrid working respondents were asked about their main reason for office visits. Fifty-one percent agreed that it was to connect with colleagues. A further 37% said they use the office to communicate more efficiently with colleagues.

The report revealed feelings and patterns towards hybrid working and revealed that 47% of UK workers would opt for a four-day workweek over a salary increase. Flexibility was also found to be a priority. When asked what they would choose to boost their productivity, 70% of employees picked flexible start and finish times.

The report’s findings indicate that employers should consider improving benefits packages to recruit and retain top talent. The report showed that UK workers who work from home would feel more motivated to visit the office if commuter benefits (58%) and catered meals (56%) were part of their packages.

Other big challenges were revealed, such as the management of remote employees (26%) and a lack of alignment between in-office and remote employees (21%).

Shockingly, 31% of employees said that they do not regularly feel engaged at work, and 44% consider themselves to be quitting quietly. Twenty-three percent feel they will be quiet quitting soon.

Regarding parental support, the report also revealed that the UK and Ireland are the least likely to make parents’ lives easier. For example, only 14% (UK) and 13% (Ireland) of parents receive childcare subsidies, compared to 37% in the US, 34% in Colombia, and 23% in Germany.

Concerning the number of days spent working at home, the UK is higher than the global average, with 18% of hybrid workers only visiting an office once a week and 34% spending two days in the office.

It was also clear from the data that employees want investment that fosters a strong culture, including engagement and team-building events (45%), communication and collaboration tools (36%), diversity, inclusion, and belonging (31%), and sustainability (26%)

Flavia Colombo, General Manager UK&I, at HubSpot said: “People clearly care about getting on with others in the workplace, but that doesn’t mean employers should scale back on flexibility or force people back to the office. Companies need to help employees find meaningful ways to connect both in-person and online by providing tools and support that work on a personal level. If failing to do so we will see a bigger impact on employees’ engagement, belonging and loyalty to their organisation and it will lead to higher attrition rates.

“It’s an employee’s market and people no longer accept the bare minimum in culture and benefits. Employers must distinguish what will nurture the sense of being cared for by an employer – whether that’s benefits, working hours or the right collaboration tools to boost morale and thus a sense of connection and purpose to the business.”

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Employee theft increased 19% in 2022

Businesses face more challenges maintaining the compliance of the existing workforce

With the cost-of-living crisis seemingly driving worker theft up, specialist background screening and identity services firm, Sterling, has warned businesses to be mindful of the cost of a bad hire.

This latest warning comes following reports from insurer Zurich UK, that employee theft had increased 19% in 2022 when compared to the year before. It’s become increasingly crucial to minimise the potential risk a new hire could pose to an organisation, especially as household budgets fall under further pressure during the cost-of-living crisis.

To compound this, employers are also facing a shortage of workers — with data published by BusinessLDN, FSB London, LCCI and CBI London revealing that two-thirds of employers are struggling to fill open vacancies. Sterling has warned of the compliance and financial dangers of rushing through the hiring process.

Steve Smith, President of International at Sterling commented: “The cost of a wrong hire can be detrimental to a business on a number of levels. Aside from the wasted time and money invested , the risk posed to a firm is significant. During a period of continued skills shortages, there can be a tendency to focus on speed of hire, which has the potential to negatively impact robust and compliant staff screening.

“With the cost-of-living crisis hitting households across the UK, this latest data from Zurich does suggest that businesses are set to face more challenges both maintaining the compliance of the existing workforce and monitoring any potential red flags for new recruits.

“While this scenario is arguably being driven by a very unique economic climate, it does highlight why robust screening processes which look at more than an individual’s right to work, qualifications, or experience is a must. Social media screening, for example, can help to identify the level of risk of fraudulent or unscrupulous behaviour that an applicant poses to the brand. This is, however, fraught with a range of compliance challenges in itself as screening through these online platforms needs to be handled with due care.”

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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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