Three Square Market, a technology company in River Falls Wisconsin, recently became one of the first companies in the world - and the first in the US - to microchip staff. It was approved by regulators in 2004.
Three Square Market is taking its lead from Sweden, where several companies are pioneering the employee microchip movement.
Although other companies in Sweden, the Czech Republic and Belgium have previously offered similar programmes, fewer than 10 per cent of workers have taken up the idea. However, at Three Square Market more than 50 out of 80 employees have volunteered so far making this the largest uptake of any scheme yet. This should now herald the way for other such schemes to be commonly adopted.
The chip costs approximately £230 each and is the size of a grain of rice. It uses RFID - or radio-frequency identification technology - which is also used by postmen who scan parcels on barcodes and the same technology is used in a contactless credit card. It is implanted between the thumb and forefinger.
Employees will not be required to have the implants and the chip will not track employees or have GPS positioning.
Todd Westby, CEO of Three Square Market explained: ‘We foresee the use of RFID technology to drive everything from making purchases in our office break room market, opening doors, use of copy machines, logging into our office computers, unlocking phones, sharing business cards, storing medical/health information, and used as payment at other RFID terminals. It's the next thing that's inevitably going to happen, and we want to be a part of it. Eventually, this technology will become standardised allowing you to use this as your passport, public transit, all purchasing opportunities." He added, “We think it's the right thing to do for advancing innovation just like the driverless car basically did in recent months.”
Mr Westby stated that the response among staff ‘exceeded my expectations’.
In the UK, biometric access systems such as facial, eye and fingerprint recognition have grown in use without any legal challenges and as, so far, there are no reported cases concerning the use of implanted microchips in employees in the UK, there has not been a legal challenge. However, if considering implementing this in the workplace, employers should tread very carefully.
Employees would have to give full and free consent to having microchips implanted – and be able to withdraw consent at any time as an employee who was instructed or who felt pressured to accept could potentially resign – claiming constructive dismissal.
Human rights, religious objections, personal injury claims (if the chip was incorrectly implanted) and the forthcoming General Data Protection Regulation will also have to be taken into account. However, just as CCTV grew to be universally accepted, micro-chipping employees may soon be the new ‘norm’.
Estée Lauder are being sued by the U.S. Equal Employment Opportunity Commission (EEOC) for giving new mothers more paid leave for care giving and child-bonding than new fathers.
If the lawsuit is successful, it could alter common parental leave policies in the U.S.
On Aug.30, the EEOC alleged in their lawsuit that Estée Lauder Companies Inc. infringed federal law by giving female employees who are new mothers more parental leave benefits than male employees who are new fathers.
In addition to the paid leave provided to new mothers to recover from childbirth, Estée Lauder provides new mothers with six additional weeks of paid parental leave for child bonding. New fathers receive two weeks of paid leave for child bonding. The lawsuit - filed in U.S. District Court in Philadelphia - also alleges that new mothers are provided with flexible return-to-work benefits that are not similarly provided to new fathers.
The EEOC asserts that this policy violates the Equal Pay Act and Title VII of the Civil Rights Act, which prohibit discrimination in pay or benefits based on sex.
The agency began the case after Christopher Sullivan, a stock worker at a Maryland store, requested six weeks of leave for the birth of his child - but was only granted two. Mr. Sullivan informed Estee Lauder that he would be the child’s primary caregiver, but he was told that the company only applied the primary caregiver title in surrogacy situations. Estee Lauder’s parental care policy was implemented in 2013 and provides primary caregivers six weeks of paid parental leave. Fathers at Estée Lauder are eligible for secondary caregiver leave only.
The EEOC's lawsuit against Estée Lauder is the most recent to be brought against a company for having different parental-leave policies for their female and male staff. In June, a male fraud investigator at J.P. Morgan Chase & Co. alleged that the bank discriminated against him, saying that fathers were denied equal paid parental leave with mothers.
Supporters of equal paid leave say that the imbalance reinforces traditional gender roles by encouraging new mothers to stay at home and discouraging fathers from taking time off to care for a new child.
Mindy Weinstein, Acting Director of the EEOC’s Washington field office praised Estee Lauder for its parental leave policy and flexible work arrangements which were great in their intent. However, she added, “… federal law requires equal pay for equal work, and that applies to men as well as women.”
Results of recent research by employee engagement specialists, Reward Gateway, shows that employees are not getting what they require from their current wellbeing programmes - despite the fact that their wellbeing has been a top agenda point for HR for some years.
The research surveyed 250 employees and 250 employers (senior decision makers) and was conducted in September 2017 by Censuswide.
The disparity of opinion between employee and employers has been shown in the results - over half of employers agree that their company shows that they care about employee’s mental, physical and financial wellbeing - whilst only 14% of employees say that their company could not do more to show they care about their mental, physical and financial wellbeing.
Research states that it is in the employer’s interest to care about their employee’s wellbeing as it was shown that more than half (52%) of UK employees agree that they would choose a company that cared about their wellbeing over one that pays more. It is even more urgent to address the closing of the gap when consideration is given to the following results:
- 33% of those surveyed said that their company currently offers no wellbeing programmes
- Only 29% said that their company currently offers a physical wellbeing programme
- Only 23% said that their company currently offers a financial wellbeing programme
- Only 22% said that their company currently offers a mental wellbeing programme
- Over 22 million British workers, or 7 in 10 employees (71%), have felt stress or financial strain in the last five years
Head of Wellbeing at Reward Gateway, Lucy Tallick said,
“Employee wellbeing is not about crisis management and fixing problems. It’s about helping your people live better and feel better by facilitating sustainable lifestyle changes that really make a difference. Employers should take into consideration that everyone has unique desires and needs, and, in order to gain buy in, it's much better to give the employee solutions that provide choice and flexibility. By creating an inclusive programme, you’ll also hugely increase your engagement.”
Doug Butler, CEO at Reward Gateway said,
“Wellbeing is a crucial part of employee engagement and, as the research shows, companies are struggling to implement the wellbeing initiatives that their staff need. We continue to innovate our wellbeing offering in order to help our clients on their engagement journey. The selection available is wide-ranging, inclusive, and designed to enable our clients to support their employees’ unique wellbeing needs. By offering a broad range of wellbeing solutions that include educational content on how to live a healthier lifestyle, impartial advice from money experts, an employee assistance programme (EAP), and industry leading discounts and payment plans on gyms and fitness equipment, our goal is to support what we believe to be the three key pillars of holistic wellbeing; Physical, Mental and Financial.”
The Government is being called upon to invest £13m a year to provide HR support to small businesses - as new research shows that it could be a key part of finding the answer to the problem of productivity.
The new research by the CIPD (supported by J P Morgan through the J P Morgan Chase Foundation) suggests that giving small businesses basic HR support can help in this respect. The pilot scheme, ‘People Skills’, ran from July 2015 to October 2016 and was based in Hackney, Stoke-on-Trent and Glasgow. It has been evaluated by a team at Manchester Metropolitan University through surveys and interviews with project stakeholders.
In each of the three locations, a small bank of independent HR consultants was recruited to provide free employment and people management advice to small businesses on demand. The CIPD’s HR Inform online support system was also made available to project participants.
More than 400 small businesses - employing between 5 and 50 employees across the three areas - were helped. In Glasgow, it was regarded as being so successful that when the research grant ran out, the city council continued to fund the programme.
CIPD Head of Public Policy, Ben Wilmott said:
“People Skills’ shows the potential benefits of targeted investment to improve small firms’ capability around the management of people through co-ordinated high-quality, locally-delivered business support via channels such as Local Enterprise Partnerships, chambers of commerce and local authorities.” He continued, “ If policy makers are serious about addressing the UK’s long-standing productivity deficit - particularly among the nearly 1.3 million small businesses that employ between 1 and 50 people - then they have to start seriously thinking about how to improve management quality, which the Bank of England’s chief economist Andy Haldane has identified as a key area for focus. ‘People Skills’ provides a template of how to actually do this on the ground among small businesses. We calculate that about £40m from the Government’s National Productivity Investment Fund would support the £13m annual cost of running a ‘People Skills’ type service across all 38 Local Enterprise Partnerships in England for three years and could revolutionise the quality of business support for small firms.”
Hang Ho, EMEA Head of the J P Morgan Chase Foundation, said:
“Small business success is an essential element of the UK economy and a critical component in creating thriving local communities. Today’s report shines a light on the importance of basic HR practices to the success of small businesses, whether that is improving productivity, boosting the effectiveness of the management team or handling crises. While we hope the ‘People Skills’ pilot will benefit participating companies in the long term, the findings clearly also demonstrate to policy makers a real need for HR support amongst SMEs.”
The key findings are that online business support is inadequate unless supplemented by personal advice and support - with face-to-face advice particularly valued by small business owner managers; that existing fragmented business support provided at a local level should be justified to prevent duplication of provision and confusion among SMEs; that policy makers need to re-think how they encourage SMEs to employ and train young people in the workplace - for example through apprenticeships - as in most cases they don’t have the interest or capability to do this. Re-focusing a proportion of government investment in skills to providing enhanced business support around people management capability for SMEs would, over time, give more small businesses the capability and confidence to engage in programmes supporting young people into work in the future.
In employment lawsuits being filed now, retaliation claims appear to be more prevalent than discrimination claims. Despite an employer having strong evidence of poor performance and misconduct, they may still be held liable for retaliation if they take adverse action soon after protected conduct occurs.
For example, the U.S. District Court for the Eastern District of Pennsylvania has ruled that a Maintenance Director at a nursing care facility can pursue his Family and Medical Leave Act (FMLA) claims to trial, despite being fired for monitoring his supervisor's work attendance.
Louis DeCicco was hired by Mid-Atlantic Healthcare LLC as the Director of Maintenance for Maplewood Nursing and Rehabilitation Center – providing long-term nursing care and rehabilitation services.
During a meeting in January 2012, Mr DeCicco was issued with a performance improvement plan by his supervisor, Sarah Balmer. The performance plan informed Mr DeCicco that he was under review for:
- not providing adequate training and mentoring to a subordinate
- failing to resolve long-standing issues with security staff
- failing to respond to facility phone calls
- failing to take a more active role in resolving the facility's maintenance issues
However, at about this time, Mr DeCicco began monitoring Sarah Balmer's work attendance, reviewing footage installed at Maplewood. He also reviewed Sarah Balmer's timesheets and prepared logs of her absences from the facility – which he was not authorized to investigate.
Five months later, a second performance improvement plan was issued to Mr DeCicco by Sarah Balmer. On the same day he also received a written warning for addressing a contractor in an unprofessional way and a verbal warning for allegedly not taking certain action, which resulted in the facility at Maplewood being short of one bed.
Later that month, Maplewood Human Resources Director, Stephanie Massey, was asked by Mr DeCicco to supply FMLA paperwork. As Mr DeCicco was the primary caregiver for his disabled father he intended to use FMLA leave to care for him. Stephanie Massey provided the paperwork to Mr DeCicco immediately.
Mr DeCicco met up with Caroline Eldridge - who was the new Human Resources Director – on June 15, to discuss several issues. They included Mr DeCicco's performance improvement plans; the alleged absenteeism of Sarah Balmer and Mr DeCicco's perceived lack of support from Mid-Atlantic. At that meeting, Mr DeCicco told Caroline Eldridge that he expected to have his employment terminated.
Three days later, Mr DeCicco returned his FMLA certification of health care provider form to Mid-Atlantic's human resources department.
Later the same evening, Sarah Balmer e-mailed John Fredericks (Regional Director of Operations), stating that she intended to terminate Mr DeCicco in two weeks time. She added that she had become aware that Mr DeCicco was monitoring her attendance and stated that he was not the type of person she wanted working for her. She explained that he had been on a performance improvement plan since January 2012 and that his comment on her attendance was a ‘lie’.
On June 19, Sarah Balmer issued a final written warning to Mr DeCicco and placed him on another performance improvement plan, which was due to expire on July 3.
On June 20, John Fredericks terminated Mr DeCicco’s employment in the presence of the regional HR Director. At that time, Mr DeCicco was 47 years of age.
He was replaced by a man Mid-Atlantic claimed was 43 years old at the time he was hired.
In May 2014, Mr DeCicco filed a lawsuit claiming age discrimination under the Age Discrimination in Employment Act and the Pennsylvania Human Rights Act. He also claimed interference with his rights and retaliation under the FMLA.
The court found that Mr DeCicco was placed on several written performance improvement plans warnings during his employment and had not contested that he reviewed camera footage, etc to conduct an independent investigation of Sarah Balmer’s attendance record – which he did only after he was placed on a performance improvement plan.
The court found that Mr DeCicco failed to show that any of Mid-Atlantic's reasons for firing him were misleading and dismissed his age discrimination claims.
However, with regard to Mr DeCicco's FMLA claims, the court found that his FMLA request and completed application were so close in time to his final warning and dismissal that it was unusually suggestive of retaliation. The court denied Mid-Atlantic summary judgment on Mr DeCicco's FMLA claims and allowed them to proceed to trial.
A number of questions for employers and employees are being raised due to the vagueness resulting from the Brexit referendum and the prospect of the UK leaving the EU.
Dominating the HR agenda will be projects for data protection and gender pay reporting. The EU General Data Protection Regulation (GDPR) comes into force in May 2018 – when employers will be required to carry out audits of employee personal data that they collect and to make certain that it meets the conditions for employee consent. Employers will also have to create new record-keeping requirements. As this will come into effect before the UK leaves the EU, organisations not compliant will risk a fine of up to 20 million Euros or 4% of worldwide turnover.
Organisations with 250 employees or more are also being required to publish gender pay gap information for the first time. This will apply to the private sector, voluntary sector and public sector organisations. The gender pay gap regulations are expected to have an implementation deadline of April 2018.
In addition employers are likely to experience increasing costs as the apprenticeship levy and extra fees for foreign worker sponsorship are introduced. There were financial changes for employers sponsoring foreign workers which took effect in April but some new entrants to the job market - and some health and education staff - will be exempt from the new salary threshold until 2019.
Tax savings for employee benefits are also likely to be reduced and many employers will have had to reconsider their schemes, as salary-sacrifice schemes have been abolished. However childcare, cycle to work and low emission car schemes have not been affected and all schemes in place prior to April of this year will be protected until April 2018. Arrangements relating to car, accommodation or school fees are protected until 2021.
The alignment of rates for the national living wage - plus current and future rates for statutory maternity, paternity, adoption, shared parental and sick pay have already taken place.
New trade union balloting rules will apply too. Under these rules, a successful vote for strike action will mean that 50% turnout and a majority vote in favour will be required. Important public services will need a vote of 40% of all eligible voters.
The HR profession is being expected to help managers and employees to navigate their way through the short and medium-term implications of Brexit, especially as the effects of HR policy and practice become clearer.
Where gender pay gap reporting is concerned, new research has shown that many organisations are finding the process confusing and misleading and fewer than half of UK companies think the requirement to publish their gender pay gap will have any impact on closing it.
Mercer’s 2017 Gender Pay Gap Reporting survey was to further last year’s research conducted to gain information from HR and Reward professionals on their awareness, concerns and plans surrounding the legislation. It was also seeking to discover how far organisations had progressed. Participants were found to welcome changes in the regulations and are in favour of the legislation in principle. It is clear that HR professionals implementing the legislation are concerned about the complexity, difficulty and misleading nature of the measures used and therefore, a lot of effort is expected to be made in clarifying and explaining the results - both internally and externally.
A study by Mercer of 165 companies revealed that 41% found the process complex; 29% thought it was confusing and 28% found the rules misleading. Just 7% described the process as comprehensive and only 3% said it was simple.
Of the businesses taking part in the survey, almost 44% plan on reporting later in the year –whilst 28% said they do not know when they will report.
Charles Cotton, senior performance and reward manager at the CIPD stated, “Employers shouldn’t be tempted to put off reporting to the last moment. If they haven’t already started, they need to think about how they communicate to employees, potential workers, existing customers and other stakeholders, what the figures mean, and what action they are going to take and why.”
Mercer also found that 70% of the organisations surveyed would release an explanation of their gender pay figures along with the hard data.
Chris Charman, principal and reward expert at Mercer said, “Although committed to the principle of reporting, many UK companies feel the figures will show an overly simplistic view and so see a need to explain further to their staff and shareholders. Many companies are concerned about the risk of reputational damage when publishing their figures, especially as there still seems to be much confusion between the gender pay gap and the legal requirement of equal pay for equal work.” He added, “Most organisations are focused on getting to grips with the figures and developing a narrative to explain. Leading organisations are well advised to think about how they can be looking ahead in order to be making improvements in future years. At the heart of this is looking at root causes, which can be found in pay, female promotion and the jobs that men and women predominate in.”
Mercer’s point of view on Gender Pay Gap reporting is partly about pay, but largely about workforce profile and dynamics - such as hiring; promotion rates of women versus men and occupational segregation. They state that understanding the wider issue requires insight, but real success comes from recognising this as a business issue – higher levels of diversity in organisations are associated with greater business performance and innovation.
The controversial, workload-increasing changes to the U.S. EEO-1 have been ‘stayed indefinitely’.
The new ruling was announced by Randel Johnson – the VP of Labor, Immigration and Employee Benefits at the U.S. Chamber of Commerce – who addressed the members of the Chamber’s Labor Relations and Employee Benefits Committee by saying:
“We have just learned that the deadline for compliance with the new EEO-1 form reporting requirement for data on hours and compensation will be stayed indefinitely. According to our sources (The Office of Information and Regulatory Affairs of the office of Management and Budget) based their decision on two grounds, one of which was the appeal submitted by the Chamber that highlighted the new form’s problems with cost, utility and confidentiality. The Equal Employment Opportunity Commission will be publishing further details about what actions they will be taking and any future deadlines and timelines in the Federal Register. This is a victory – not just for the business community but for common sense in the world of regulations and information collection. As you know, the Chamber was at the forefront throughout the development of the revised form in crafting arguments opposing EEOC’s gross overreach in expanding the existing EEO-1 form to unmanageable proportions, without any discernible benefit. We will provide more details on this important development as they become available....”
As it has previously been reported, the Equal Employment Opportunity Commission was to require employers of 100 or more employees – and federal contractors with 50 or more employees – to give compensation data with their EEO-1 reports.
In addition, the EEO-1 filing deadline of September 30, 2017 was to be moved to March 31, 2018 with reports due on March 31 of every subsequent year.
Employers would continue to categorize employees, first by EEO-1 job category using EEOC’s 10 job categories and then by sex and ethnicity or race.
These have not changed but after reporting those details, employers would then categorize their employees by pay bands. The EEOC has added a total of 12 pay bands to the form – starting with $19,239 and under and ending with $208,000 and over. Employers would add up the number of employees in each pay band by sex, and ethnicity or race. Finally, the new rules require firms to report the total number of hours worked by employees in each pay band.
Victoria Lipnic, Acting Chair of the EEOC received a memorandum from the Administrator of the OIRA, Neomi Rao stating that the new form can continue to be used but only to collect the usual EEO-1 information, i.e. the number of employees by race, sex and ethnicity in each of the 10 EEO-1 categories.
Randstad US - one of the largest national staffing and HR service organizations - released a report in August stating that 82 percent of job seekers are frustrated with an excessively automated recruiting experience. Candidates who apply online for jobs and never hear back from potential employers about the status of their applications are particularly affected.
Research findings are based on an OmniPulse survey fielded by national polling firm Research Now on behalf of Randstad US and was fielded for four days in June 2017. It reviewed approximately 1,200 respondents over the age of 18 years with a nationally representative sample balanced on age, gender and region. Most applicants for jobs agreed with the technology used but were irritated when it replaced the human side of the recruiting procedure.
The report found that 95 percent of those reviewed stated that technology should be used to assist recruitment – not replace it; 85 percent said technology made seeking employment more impersonal and 82 percent said that ideally, innovative technologies should be used in the background and come second to personal interaction. In effect, in working with staffing or recruitment firms, candidates named ‘a company that uses innovative technologies to find me jobs but puts human interaction first’ as the most appealing.
Linda Galipeau, North America CRO of Randstad based in Atlanta said:
“The findings reinforce what we've believed for quite some time - that successful talent acquisition lies at the intersection of technology and human touch. If done correctly, the right combination of personal interaction with the power of today's intelligent machines can create an experience that is inherently more human."
William Tincup of SHRM-SCP, an expert on recruiting technology and president of recruitment media company RecruitingDaily stated:
“Artificial intelligence (AI) programs may help improve the candidate experience. For example - recruiters are horrible at letting candidates know where they are in the recruiting process - AI will make it so that feedback is consistently given."
Linda Galipeau also remarked:
"Employers today and in the future will be judged by the experience they create for prospective new hires. Job candidates are empowered to provide instant feedback on employers, rating a company's candidate experience just as they would rate a movie. In a tightening labor market, companies cannot afford to lose potential talent due to a poor hiring experience. And in a technology-driven world of talent, it's not only about how a company markets itself but what others say about the company that has a positive impact on employer branding."
Pete Lamson, CEO of JazzHR - a recruiting software company based in Massachusetts and Pennsylvania - agreed and stated:
"I think certainly being highly responsive helps, respond back, it reflects back on the employer's brand."
Job seekers have become increasingly savvy about what makes a great candidate experience and what leaves them with a less-than-favorable impression. Respondents to the survey named "the degree of personal, human interaction during the process," and "the recruiter/hiring manager I worked with," as having most influenced their positive impression.
A new report found that nearly four in ten American adults don't have a job and are not looking for one.
President Donald Trump alleged – in his election-season – that America’s unemployment rate did not tell the whole story and is ‘one of the biggest hoaxes in modern politics’. He claimed that the real unemployment rate could actually be 40 percent higher.
Anyone without a job and who has been actively seeking work in the last four weeks is considered, by the government, to be unemployed. Slipping through the cracks are those who have simply given up trying to get back into the labor force.
A new study by Brookings Institution’s Hamilton Project, takes a closer look at the more than ninety-four million Americans not counted in the labor force. In this analysis, the following questions were explored. Of the approximately twenty four million men and women of working age who were not in the labour force in 2016:
- What are the reasons given for not working or seeking work?
- With whom are these persons living?
- How are they making ends meet?
The findings were that women with a high school education or less are overwhelmingly the largest group out of the labor force. Excluding the care givers - who make up approximately forty percent - men and women give the same reasons for not belonging to the labor force. Almost thirty per cent report being ill or disabled; eight percent are students and five percent have retired early.
Male and female nonparticipants were found to have different living arrangements, with females living with a spouse or partner and males living with parents. Almost seventy five percent of these live in a household with earned income and only eleven percent report claiming income from a safety net when they are not receiving earned income. More than 1.3 million Americans who are not in the labor force report having no income at all. Forty five percent of households with a male prime-age nonparticipant and twenty eight percent with a female prime-age nonparticipant are in the bottom income group.
Researchers also found that more women than men sat on the sidelines in every educational subgroup, despite the fact that more women hold advanced degrees than men.
The report said, "Interestingly, the gender ratios among nonparticipants become more imbalanced as education increases. Among nonparticipants with a high school degree or less, there are nearly 2 women for every man; at the bachelor's degree level, three-and-a-half times as many women as men are nonparticipants."
Roughly 13 percent were not in any of the categories but had worked in some capacity over the course of the past year.
"Labor force participation is the key channel through which Americans contribute to and benefit from their economy, making it vital that we understand who is left out of the labor force," the report said. "Economic growth and broad sharing in that growth are both enhanced when the labor market makes the best possible use of workers' talents."
A survey by CIPD (the professional body for HR and people development) and the Adecco Group - of more than 1,000 employers has identified that hiring demand remains strong, whilst unemployment is at a record low. This is in comparison with a May 2017 report and it suggests that UK employment will grow strongly in the third quarter of 2017. However, wage growth is likely to remain weak and basic pay award expectations for the next 12 months remain at just 1%.
The quarter’s net employment balance – which is a measure of the difference between the proportion of employers who expect to increase staffing levels and those who expect to decrease them – shows an increase from +20 to +27 during the past three months.
The restraint on the basic pay award outlook can be put down to various reasons.
Gerwyn Davies, Senior Labour Market Analyst for the CIPD said:
“Predictions of pay growth increasing alongside strong employment growth is the dog that hasn’t barked for some time now, and we are still yet to see tangible signs of this situation changing in the near-term. The facts remain that productivity levels are stagnant; public sector pay increases remain modest while wage costs and uncertainty over access to the EU market have increased for some employers. At the same time, it is also clear that the majority of employers have still been able to find suitable candidates to employ at current wage rates due to a strong labour supply until now. The good news is that the UK labour market continues to go from strength to strength. This is particularly good news for jobseekers, especially the long-term unemployed, who have recently been able to move into work more quickly than in the past. We believe therefore that the Bank of England was right to give more weight to the prospects for pay and productivity than to the rise in employment in their recent interest rate decision. Against the backdrop of future migration restrictions and a tight labour market, the need for a workforce development plan is greater than ever.”
In the private sector, 23% of firms quote that delivering the National Living Wage is a brake on pay growth; 21% cite uncertainty over access to the single market and 21% suggest the Government’s auto-enrolment pension’s scheme is acting as a challenge. Another 21% of firms report that affordability is keeping down pay - which underlines the urgent need to address the weak productivity growth in the UK. In the meantime, around three quarters of public sector employers state that restraint in the public sector is the main reason why they cannot complement the inflation rate target of 2% in their next basic pay award.
Research by the CIPD also indicates that employee pay expectations are weaker this year compared with last year. This may suggest that employers are not coming under any additional pressure to raise pay from workers, despite the low unemployment rate.
In retrospect, the standard for all basic pay decisions taken in the first six months of 2017 is 1.5%. This may mean that employers have become more negative about basic pay growth over the past six months due to a slowing economy.
Alex Fleming, President of General Staffing at the Adecco Group UK remarked:
“This quarter’s report demonstrates strong and stable employment intentions. These have remained in a positive range for the last two years during which time we have seen unemployment consistently fall. Context is important here though: employers continuing to hire isn’t, necessarily, an indication that they are convinced of a bright economic future, rather that nothing significant has changed in recent months. Many employers are getting on with the day-to-day hiring required to keep their businesses ticking along until they have enough information to build concrete recruitment plans. Overall, our labour market picture looks promising especially considering the unknown future impact of Brexit on the flow of talent in and out of the UK. Strong labour supply is a key contributor: the long-term unemployed are finding work more quickly and the amount of workers aged 50-64 who are in employment has risen by around 200,000 during the past year. However continued subdued wage growth that the labour market is currently facing is a real issue that employers need to tackle head on. Employers must to invest in staff to increase productivity, thus in-turn providing them with the opportunity to increase wage growth.”