National Minimum Wage change – 1st October 2016

With the National Minimum Wage about to increase, make sure you understand the new rates.

As of 1st October 2016, the following NMW rates will apply:

  • For workers aged 21 – 24 year olds, NMW will increase from £6.70 to £6.95 per hour
  • For workers aged 18 – 20 year olds, NMW will increase from £5.30 to £5.55 per hour
  • For workers over compulsory school age but not yet 18, NMW will increase from £3.87 to £4.00 per hour
  • The apprentice rate (for apprentices under the age of 19, or 19 and over but in the first year of apprenticeship) will increase from £3.30 to £3.40 per hour

Many businesses are still absorbing the costs from the introduction of the National Living Wage (NLW) rate in April 2016, so they’ll be glad to see that there’s no additional increase to the NLW in October. This means that the current rate of £7.20 per hour for workers aged 25 and over will continue to apply until April 2017.

The new rate from next April is expected to be £7.60, but this hasn’t yet been confirmed by the government – we’ll keep you posted as soon as any announcements are made.

What the changes mean for you

In light of the above, this means that some members of staff will receive a pay increase in October, while others will remain on the same wage until April. However, from April 2017, the NMW and NLW will be aligned, so the annual increase for both will subsequently take place in April every year. This means it’s likely that the NMW will increase both in October 2016 and April 2017 – so it’s worth bearing this in mind.

It’s really important to ensure that you’re paying staff the correct legal minimums, taking into account the increased rates and when they’ll apply from. For employers failing to pay the correct NMW or NLW rate, a claim of ‘not being aware’ of the new minimum is no protection from the financial penalties that can be imposed – and at a cost of up to £20,000 per worker, non-compliance isn’t an option!

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Easier to get a job in Manchester than London?

It is easier to get a job in Manchester than in London, according to a survey that explodes the myth that the nation’s capital is sucking the lifeblood out of the economy beyond the M25 corridor.

Data from the recruitment website Adzuna also shows a 2.7 per cent drop in vacancies in August to 1.23 million after the June 23 vote for Britain to leave the European Union, as caution surrounding Brexit and summer seasonality prompted a drop in hiring.

Despite this, the survey revealed an increase in advertised salaries for the first time in five months in August, reaching £32,784, up 0.3 per cent from July. It also found that the employment rate, at 74.5 per cent, hit a joint record high since comparable records started in 1971, thanks to growing self-employment and the rise of the gig economy.

Doug Monro, co-founder of Adzuna, said that the drop in vacancies was unlikely to represent a long-term lull. “Hiring has certainly not ground to a half as many predicted after Brexit,” he said.

However, he warned about reading too much into the small rise in starting salaries, as pay was still far below pre-recession levels and inflation was expected to rise.

The findings, based on job ads from more than 500 websites, come amid much conflicting data about the impact of Brexit. Although the CBI’s latest survey of the financial services sector found that optimism remained low, a poll of chief executives by KPMG found that nearly three quarters were “confident” about their company’s growth prospects.

The headline figures from the Adzuna survey hide huge regional variation in competition for jobs, ranging from 8.39 jobseekers per vacancy in Northern Ireland to just 0.25 in the southeast.

However, London does not make it into the top ten best cities to get hired. That list is headed by Cambridge, where a high number of unfilled positions means that there are only 0.06 jobseekers per vacancy. Next are Guildford (0.09), Oxford (0.12), Reading (0.14) and Winchester (1.18).

London, where there were 0.49 jobseekers per vacancy last month, was beaten by a host of southern cities, but also by Manchester, where the number was only 0.23. The worst city for getting hired was Belfast, where there were 5.42 people chasing every vacancy.

The survey also indicates that not all sectors have suffered a summer slowdown. The number of advertised vacancies in consultancy, at 12,441, was up 5 per cent from July and up 10 per cent from last year as companies seek highly skilled experts, without having to take on permanent employees.

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REC Jobs Outlook: Confidence plummets

Business confidence has deteriorated significantly since the EU referendum, but employers say they need to hire more staff to meet demand, according to the latest Jobs Outlook survey.

A third (34 per cent) of employers surveyed in the three months to August say they have no capacity to take on more work without hiring more staff, while 43 per cent say they have only ‘a little’ spare capacity and would need to grow their workforce in order to meet an increase in demand.

More than a fifth (22 per cent) of businesses plan to take on more permanent staff in the next three months. Only 4 per cent expect to decrease their permanent workforce in the same period.

The survey of 602 employers also reveals:

  • A quarter (25 per cent) plan to take on more permanent staff in the medium term (4-12 months)
  • Permanent and temporary vacancies in engineering and tech, construction, and health and social care are particularly difficult to fill due to a shortage of suitable candidates

More than a quarter (27 per cent) of public sector employers have made redundancies in the last year, compared to 16 per cent of private sector employers.

Comment from Steve Young (Sept 2016) – We have found the demand for both temporary and permanent staff in the local Thame area to be quite strong for the whole of this year. Demand for temporary staff has dropped slightly in September but permanent vacacancies are still quite strong.

jobsoutlook-september-2016
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Contact with staff during sick leave

There’s often a misconception that contacting employees when they’re on sickness absence could be construed as a form of harassment – but an appropriate level of contact is actually a necessary element to a good absence management policy. Here’s our guidance on keeping on top of the issue in the right way.

Striking the right balance is key when it comes to keeping in touch with absent employees: it’s fine to contact them at various stages of the sickness period to see how their recovery is progressing, but excessive contact could feel intimidating. Your sickness absence policy should state that this contact will take place in order to manage employee’s expectations should they take time off for ill health.

Frequency of contact

Although your policy may require an employee to phone in every day for the first week of sickness, once this period has passed, they will need to obtain a sick note from their GP – at this stage, daily call-ins shouldn’t be necessary.

For sick leave that extends beyond this, once a week is generally an acceptable frequency for contact, but of course every situation must be considered on a case-by-case basis.

How to approach contact

When you need to contact an absent employee during their absence, first consider what you’re going to discuss during your call.

It’s a good idea to avoid ‘interrogatory’ conversation and to avoid repeating questions which have already been discussed previously so that the employee doesn’t feel unsettled or worried about their position.

Here are some pointers on what you should discuss:

  • How they’re currently feeling
  • What measures they’re taking to get better
  • Whether any improvement has been seen
  • If there are any reasonable adjustments you could implement which would allow them to return to work sooner – along with notifying them of when these adjustments will be completed.

Gathering this information will help you to prepare for the employee’s return. For example, if any adjustments are required, you can make sure this is completed in a timely fashion – plus it also gives you the ability to inform staff covering the absentee’s workload when they’re coming back to work.

If no adjustments can be made, then at least the employee may be able to let you know if their period of sick leave is nearing its end and when they intend to return to work.

Should a referral to occupational health be required, you should discuss this with the employee, and appropriate letters should be sent to gain their consent to a referral.

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UK jobless total falls to 1.64 million

The UK unemployment total fell by 52,000 to 1.64 million between April and June, official figures indicate.

The UK’s unemployment rate remained at 4.9%, the Office for National Statistics (ONS) said.

According to the ONS, the number of people on the claimant count in July, the first month since the Brexit vote, was 763,600, down 8,600 from June.

Wages excluding bonuses rose 2.3% in the three months to June compared with a year earlier, the ONS said.

Including bonuses, earnings growth was 2.4%.

“The labour market continued on a strong trend in the second quarter of 2016, with a new record employment rate,” said ONS statistician David Freeman.

“However, little of today’s data cover the period since the result of the EU referendum became known, with only claimant count and vacancies going beyond June – to July for the former and to May-July for the latter,” he added.

The jobless total is now at its lowest for eight years, while the unemployment rate is at its lowest since the summer of 2005, according to the ONS figures.

The employment rate reached a record high of 74.5%, with 31.8 million people in work in the three months to June – 172,000 more than the previous quarter.

Brexit ‘labour market toll’

Howard Archer of IHS Global Insight said that the UK economy showed “impressive resilience in the run-up to the EU referendum and the immediate aftermath of the vote to leave”.

However, he warned: “It is premature to draw any firm conclusions from this… It remains likely that softening economic activity and heightened uncertainty will take a toll on the labour market over the coming months.”

Hargreaves Lansdown economist Ben Brettell said that while forward-looking surveys to gauge business confidence had suggested the Brexit vote had delivered a shock, “surveys are driven by sentiment, and can therefore overreact”.

“The dramatic fall in confidence may not ultimately be borne out by activity, and today’s claimant count number is a tentative sign that things might not turn out as bad as many predicted,” he said.

Anna Leach, head of economic analysis and surveys at employers’ organisation the CBI, said that before the Brexit vote, “the UK’s jobs market remained in rude health, though vacancies have continued to tick down since the beginning of the year.”

She said the Bank of England had been right “to act swiftly to shore up confidence and keep money flowing through the economy” by taking steps such as lowering interest rates.

She called on the government to “make ambitious decisions in the Autumn Statement that will secure the UK’s economic future as changes to trade, regulation and access to skills loom on the horizon”.

Suren Thiru of the British Chambers of Commerce said: “Labour market indicators tend to lag behind the wider economy, so it is likely to be some time before the full post-referendum employment picture emerges.

“However, more needs to be done to boost business confidence, so that firms can continue to grow and recruit.”

Source – BBC

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Fathers too nervous to ask boss for parental leave?

Only a fraction of fathers have taken advantage of shared parental leave rules and taken extended time off work to care for a new baby, according to the first figures on take up.

Records held by Revenue & Customs showed that only 3,000 parents took up the offer in the first three months of this year. Although it was introduced in April 2015, this is the first time that the figures have been separated out from other forms of parental leave.

It compares with 52,000 fathers who took paternity leave last year and 155,000 mothers. More than 650,000 babies are born in the UK each year, suggesting that the vast majority of fathers would use holiday entitlement or take no time off at all after the birth of a child.

Shared parental leave allows parents to divide up a year of leave between them, often with the mother having time off first and then the father when the baby is six or nine months old.

The figures were compiled by the legal firm EMW. Lawyers said that the reasons for not taking up shared parental leave were often financial, or bound up with job insecurity, with men thinking they would be seen as dispensable or uncommitted if they took months off to be with a baby.

Jon Taylor, principal at EMW, said that hundreds of thousands of families could be missing out by not embracing the new system.

“Many new parents are still unaware of their new rights or are unclear about how the system will work in practice. Many of the old concerns which have long acted as a disincentive to taking extended maternity or paternity leaves still remain,” he said.

New parents were acutely aware that even a temporary fall in income could be a struggle at such an expensive time, he said.

“Uncertainty over the impact time off will have on individual’s careers also looms large. Fathers in particular may still be concerned over the perceived stigma attached to asking for greater flexibility to take a greater role in their child’s care, in case they appear to be less ambitious or committed as a consequence. However, employers have an obligation to accommodate eligible requests in the same way for fathers as they do for mothers.”

Tom Beardshaw, paternity specialist with Executive Coaching Consultancy, said that the main reason why men were not embracing the scheme lay in its format. “At present men can only take shared parental leave if their partner loses it from her own allocation, and why would any new mother want to do this?” he said.

Mr Beardshaw said that it was poorly designed and “use it or lose it” paternity leave would be more successful.

“We know from successful international models that when men and women are given the same entitlement to parental leave, they take it up in large numbers.”

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Job vacancies up 8% as shortage of skills takes its toll

The number of jobs advertised last month was higher than at the same time last year, suggesting that Britain’s booming jobs market was not affected by the EU referendum result, according to Reed.co.uk, the recruitment website.

There were 8.2 per cent more vacancies on offer last month compared with a year before, it said, as employers continued to take on new staff.

Skills shortages are high in many sectors of the economy because of record employment levels, which mean there are fewer skilled workers looking for a job. The figures from the UK’s biggest jobs site show that more than two thirds of all sectors in the economy were healthier than they were last year, with education, construction and security leading the way, while Northern Ireland and northwest England saw the fastest increase in job vacancies.

Several surveys have shown that while optimism has decreased among businesses, job cuts have been small as employers take a “wait and see” approach over Brexit negotiations.

Reed.co.uk reported that the number of jobs advertised in manufacturing also showed an annual increase, of 18.4 per cent, which it said was an “especially encouraging sign for longer-term economic prospects” after a survey of business activity showed manufacturing output dropping to its lowest level since February 2013.

However, the number of vacancies in banking and energy fell 15.8 per cent and 14.7 per cent, respectively. The fall in gas and oil prices has hurt staffing levels in the energy sector, while banks have been hit by customers deserting the high street for digital channels and uncertainty surrounding Brexit. Last week Lloyds said that it was cutting 3,000 jobs and closing 200 branches.

The number of jobs being advertised fell marginally from a month earlier, dropping from 8.9 per cent in June to 8.2 per cent in July. In addition, the average rate of growth for job vacancies for 2016 so far is 9.6 per cent, compared with 28 per cent for the same period a year ago, suggesting that there has been an overall decline in the number of employers looking to hire new staff.

James Reed, chairman of Reed.co.uk, said that the Bank of England should cut interest rates to help to avoid a downturn and any rise in job cuts. “This is an important moment for policymakers because decisions made this summer will have an impact for many years to come. If it was up to me, I would aggressively cut taxes and interest rates to avert a recession,” he said.

A study by Totaljobs.com, another recruitment website, said that 44 per cent of companies it questioned said that Brexit would not affect the number of people they hired. About 54 per cent said they would not delay their hiring plans, while three fifths said they would not cut jobs because of Brexit.

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Government Statement: Status of EU Nationals in the UK:

The government have clarified in an official statement that there has been no change the rights and status of EU nationals in the UK and UK nationals in the EU following the EU referendum. At the present time the UK remains a member of the EU. Once Article 50 has been triggered, the UK will still remain part of the EU until the two year negotiations have concluded. In the long term, once the UK has left the EU the government fully expects that the legal status of EU nationals living in the UK, and UK nationals living in the EU, to be properly protected.

EU Nationals who have greater than 5 year’s residency

  • EU nationals who have lived continuously and lawfully in the UK for at least 5 years will automatically have a permanent right to reside and there will be no requirement to register for documentation to confirm this status.
  • EU nationals who have lived continuously and lawfully in the UK for at least 6 years are eligible to apply for British Citizenship.

EU Nationals who have less than 5 year’s residency

  • EU nationals do not need to register for any documentation in order to enjoy free movement rights or responsibilities
  • For those that decide to apply for a registration certificate there has been no change to government policy or process and applications will continue to be processed as usual
  • Non-EU family members of EU nationals must continue to apply for a family permit if they wish to enter the UK under UK law if they do not have a residence card issued by a member state.
  • Extended family members of EU nationals who are also EU nationals must continue to apply for a registration certificate, and a residence card if they are a non-EU national, if they wish to reside in the UK.

Irish Nationals

  • Irish nationals enjoy separate rights which means they are treated in the same way as British nationals in most circumstances and there has been no change in this position.

Croatian Nationals  

  • Croatian Nationals might need to continue to apply for a registration certificate to be allowed to work in the UK under the transitional arrangements that were put in place when Croatia joined the EU in 2013.
  • The type of registration certificate that they might need depends on whether they need permission to work in the UK, and what they will be doing. Again, there has been no change to government policy or process, and applications will continue as normal.

Removal of UK nationals from the UK

  • There has been no change in the circumstances in which someone could be removed from the UK.
  • As was the case before the referendum, EU nationals can only be removed from the UK if they are considered to pose a genuine, present and sufficiently serious threat to the public, if they are not lawfully resident or are abusing their free movement rights.

https://www.gov.uk/government/news/statement-the-status-of-eu-nationals-in-the-uk

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‘Turbulent times for employers could be made worse by Brexit’ – REC

Half of UK employers (51 per cent) anticipate skills shortages for permanent staff, according to the latest JobsOutlook survey by the Recruitment & Employment Confederation (REC).

The REC’s latest survey of 600 employers reveals that 30 per cent of organisations are operating at full capacity, while a further five in ten (50 per cent) have only ‘a little’ spare capacity to meet any increase in demand.

Following the release of official data last week showing the employment rate is at a record high of 74.2 per cent, the REC’s JobsOutlook report forecasts that candidate availability will tighten further. Sixty-eight per cent of employers say they will maintain their existing permanent workforce, while one in five (20 per cent) expect to take on more permanent staff in the next three months.

Employers flagged a shortage of candidates to fill permanent and temporary roles in areas such as engineering, technology, health and social care and hospitality.

REC Chief Executive Kevin Green says:  

 “The UK jobs market is at a tipping point, with the decision over our EU membership making a difficult situation worse. Whilst hiring has slowed down in recent months due in part to the Brexit question and global economic uncertainty, employers are telling us that finding candidates to fill vacancies is a difficult challenge.

 “A vote to remain in the EU could release pent up demand, with a mini hiring boom over the second half of the year. On the other hand, a vote to leave is likely to see employers abandoning projects, shelving new expenditure and implementing hiring freezes during a prolonged period of uncertainty. We also have major concerns about the impact Brexit would have on lower-paid sectors which rely heavily on workers from the EU, such as hospitality, healthcare and farming. It is difficult to see how an Australian points-based immigration system would meet the needs of businesses in these sectors when British applicants are already in short supply.

 “We have heard a lot of rhetoric calling for low-skilled EU migration to be curtailed, but what we haven’t heard is a viable explanation of how employers and our public services would be able to make up for the short fall in workers if free movement was removed.”

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Permanent placements fall for first time since September 2012 (REC Report on jobs – July 2016)

REC Report on Jobs – July 2016

Key points:

  • Brexit concerns hit recruitment activity in June
  • Pay growth slows further
  • Candidate availability continues to deteriorate

Summary:

The Markit/REC Report on Jobs – published today – provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.  

 Drop in permanent placements…

The number of people placed in permanent positions fell in June. Although slight, it was the first decline in 45 months. Anecdotal evidence suggested that uncertainty in the lead-up to the EU referendum (data were collected between 13-24 June) had heavily impacted on activity. 

         …while temp billings rise at slower rate

Although temporary/contract staff billings continued to increase in June, the rate of growth eased to a nine-month low. Brexit uncertainties were frequently cited by survey respondents.

 Pay growth continues to ease

June data pointed to a further easing of permanent salary growth. The latest increase was the least marked since September 2013. Temp pay also rose at a slower pace, hitting a three-month low.  

 Further drop in candidate availability

The availability of staff continued to fall in June. Permanent candidate supply decreased at a marked pace that was sharper than in May, whereas temp availability fell at the slowest rate in 33 months.

 Regional and sector variation

London saw a further drop in permanent placements, with the rate of decline the sharpest since December 2012. Scotland saw broadly unchanged placements, while the Midlands and South registered weakening rates of growth. The North posted the strongest increase overall.

 Agencies in the South of England reported stagnant temp billings during June, while slower increases were recorded in the Midlands, North, London and Scotland. 

 Higher demand was signalled for both public and private sector vacancies. The stronger growth was indicated for the latter, with private sector temporary workers seeing the fastest increase overall.

 Engineering staff topped the ‘league table’ in June, recording the strongest growth in permanent vacancies of the nine monitored categories. In second place was Nursing/Medical/ Care. Hotel & Catering staff on the other hand saw only a modest rise in demand.     

 Nursing/Medical/Care workers saw comfortably the sharpest rise in temporary vacancies during June, with Hotel & Catering staff in second place. The weakest growth was signalled for Executive/ Professional staff.

Comments:

 REC Chief Exec Kevin Green says: 

“Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects.

 “Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like. 

 “We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU.

 “Before the referendum, businesses were already finding it increasingly hard to source the right candidates. Ensuring employers can still access the people they need to succeed must now be top of the list in any negotiations.”

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