Some of Britain’s biggest companies and government departments have started using a new form of “deep” psychological profiling to assess job applicants.
The online assessment asks candidates a series of questions such as “Have you ever had an imaginary twin?” in order to uncover “subconscious latent potential” and weed out job hunters who look good on paper but may perform less well in the office.
The developers say that the 30-minute questionnaire can also reveal underlying motivations and mental health problems.
It asks more than 50 questions, including “When you have done something well, who do you want to know?” and “Remember the moment when you first lost out to a rival. What did you do?” It also examines how people handle conflicts with their family, friends and partners. The researchers say that talking about an imaginary twin allows people to provide insights about themselves that they may otherwise have chosen to keep hidden.
Curly Moloney, one of the founders of The Cambridge Code, said: “Each question tells us a small thing but when put with other answers it becomes a small jigsaw piece in a big picture.”
She added that the test could pick up traits such as inner drive, which does not usually become apparent until after several months in the job. She also believes it can help women in particular.
“I’ve come across many female chief executives who are great at running a company, but don’t interview well,” she said. “I think this is why a lot of women don’t end up on boards, even though they would be very good at it.”
The team created the test after analysing responses and tracking the careers of more than 10,000 people. “The tool is proven to uncover the subconscious latent potential and wellbeing present in all of us, but lies beyond the reach of established psychological measurement,” the company’s website says.
The company says that the test helps to show how flexible and resilient candidates are, their drive and potential and how they deal with authority, which are necessary skills in the modern workplace but are hard to uncover in interviews. It also seeks to establish how good applicants are at managing people and dealing with rivalries.
“To make it to the top of an organisation or a senior leadership role, an individual needs to be able to make tough decisions and to have the capacity to live with the consequences of their actions. In most individuals this element of ‘steel’ or ruthlessness is contained but can flash when necessary,” the company says.
The Cambridge Code does not reveal which companies use its techniques but Dr Moloney says she has worked with a third of FTSE 100 companies as well as governments at home and abroad. The company hopes that the test will also be used in doctors’ surgeries to give a rapid assessment of mental health conditions in patients.
Employment hit a record high and joblessness stayed at a 43-year low in the three months to May, but earnings growth slowed as the labour market continued to confound convention.
The weakness in wage growth, which dipped from 2.6 per cent in April to a six-month low of 2.5 per cent, is unwelcome, but economists said that it was unlikely to deter the Bank of England from lifting interest rates next month.
Markets are pricing a 75 per cent chance of a quarter-point rise to 0.75 per cent in August, which would be the first time that rates have been above 0.5 per cent since March 2009.
Surging jobs growth has been one of the strongest features of Britain’s recovery since the financial crisis, but the wage growth that is meant to accompany low unemployment has yet to appear, baffling observers.
The number of people in work has risen by 137,000 since February to 32.4 million, with the employment rate hitting 75.7 per cent, the highest since comparable records began in 1971, the Office for National Statistics said. Unemployment fell by 12,000 to 1.41 million and the jobless rate remained at 4.2 per cent, its lowest since 1975.
There was little evidence of the jobs boom slowing. The number of vacancies, that is advertised jobs that need filling, was put at 824,000, up 7,000 and at a record high.
Tej Parikh, senior economist at the Institute of Directors, said that although the figures underscored the resilience of the labour market, “sub-par wage growth remains a sting in the tail”. He said that pay was struggling to keep pace with record levels of employment, in part because of heavy cost pressures and weak productivity growth.
Ian Brinkley, acting chief economist at the Chartered Institute of Personnel and Development, said: “The labour market continues to deliver on jobs, but there are a number of underlying weaknesses.
“Much of the job growth has been for part-time work and, as a consequence, total hours worked in the economy have fallen slightly.”
The additional jobs were all full-time positions, but the ONS data showed that the average working week for full-time employees had been cut by 0.3 hours to 37 hours. Total hours worked fell by 300,000 to 1.03 billion between February and May. The drop may have been related to age.
“More than half of the quarterly increase in employment came via the 50 to 64-year-old age cohort,” George Buckley, an economist at Nomura, said.
The economy appears to be picking up after a slow first three months of the year because of the unusually cold weather. The Bank of England is now worried about the impact on inflation. Mark Carney, the governor, said this month that both the economy as a whole and pay were growing, as the Bank had forecast in May, smoothing the way for an August rate rise. Sir Jon Cunliffe, a deputy governor who opposed November’s rate rise, said last week that pay growth did not seem to be breaking out of its recent 2.5 per cent to 3 per cent range. The Bank’s projections suggest that wages will become inflationary above 3 per cent.
Victoria Clarke, at Investec, said that the Bank would “feel the need to move forward with gradual rate rises as it eyes a pick-up in domestically generated inflation”.
Britain’s haulage industry is “sleep-walking” — or perhaps that should be sleep-driving — into a shortage of drivers because of an ageing and increasingly unhealthy workforce, putting the health of the economy at risk.
According to the Unite union, the industry’s failure to recruit younger workers means the average age of a large goods vehicle driver has increased from 45.3 years in 2001 to 48 in 2016, with 13 per cent aged over 60 and only 1 per cent under 25.
Unite says the skills shortage is likely to be exacerbated by Brexit as many British haulage firms have become reliant on eastern European drivers. It quotes figures suggesting that between 43,000 and 60,000 of the UK’s 250,000 drivers are from the European Union.
It cites “incredibly high” levels of injury and ill health as a big factor, the main issues being musculoskeletal problems, stress, depression and anxiety. It said research showed that long-haul driving, in particular, was causing unhealthy lifestyles with obesity, high blood pressure, lack of sleep and diabetes all commonplace. Unite said the health problems could be a contributory factor to drivers falling asleep at the wheel. In April, a confidential survey by the union of its heavy goods vehicle drivers found that 29 per cent admitted to having fallen asleep at the wheel.
Adrian Jones, Unite’s national officer, said that to recruit new drivers and retain existing workers the industry needed to have “a long hard look at itself and end the race to the bottom attitude . . . on pay and conditions”.
Unite said the problems were set to increase due to European Union rules that will see maximum driving times increased and minimum rest times cut.
Sally Gilson, from the Freight Transport Association, said: “It’s important for logistics that we reach out and work to attract young people into the sector. We need to show that there are clear career opportunities and long-term prospects in logistics.”
She said there needed to be a change in the way drivers were looked after on the road, where facilities are poor. “A toilet, somewhere to eat, and a safe place to park is a very basic need and even that is difficult to find in some regions,” she said. “To attract young people and take care of the health of our older drivers, facilities need to provide healthy food options, clean toilets and showers, areas where people can socialise, free Wi-Fi and somewhere to exercise.”
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Thousands of low and moderate earners are opting out of pension saving as they struggle to make ends meet after a sharp increase in deductions from their pay packets was introduced in April.
The underlying opt-out rate has risen from 7.98 per cent to 8.18 per cent in the past two months, according to Now Pensions, the first big auto-enrolling master trust to disclose the impact of the contribution changes.
The increase in employee deductions has been seen as a key test for auto- enrolment — the government’s campaign to “nudge” millions of low earners into pension saving for the first time.
Auto-enrolment is seen as a success, with about nine million people starting to save for the first time since 2012, when it began to be phased in. However, the initial employee contribution was set at only 1 per cent of qualifying earnings, defined today as earnings in excess of £6,032, leading to concern that more people would opt out when the rate was tripled from April.
Now Pensions, an offshoot of the Danish state pension scheme, runs auto-enrolment schemes for 30,000 employers in the UK, most of them small businesses but also a handful of larger ones, such as Fitness First, the gyms group, and Cineworld, the cinemas chain.
The company, which is one of the biggest platforms with 1.75 million saving customers, said that 23,800 people had opted out in the two months since deductions had been raised. That was 1,750 more people than it would have expected if the opt-out rate had remained at the previous year’s level, according to Adrian Boulding, head of policy at Now Pensions.
The opt-out numbers include new recruits to client employers who bale out from the pension scheme in the first six weeks of their employment, as well as existing employees previously enrolled in the scheme who change their minds.
“A small number of people have been deterred by the increase in deductions, but the numbers demonstrate that the vast majority are sticking it out,” Mr Boulding said.
Another test of auto-enrolment comes next April, when the minimum employee contribution is due to rise to 5 per cent. Minimum employer contributions were raised from 1 per cent to 2 per cent in April and will be raised to 3 per cent next April.
The squeeze on real incomes over the past year, as inflation overtook wages growth, was another reason that the increase in deductions could have pushed more low earners to opt out.
Two factors softened the blow for many low-paid employees. One was the 4.4 per cent rise in the national living wage from £7.50 an hour to £7.83 in April. The other was a rise in personal allowances for income tax and national insurance from April.
Separate data yesterday from the Department for Work & Pensions showed that the percentage of eligible employees participating in a workplace pension scheme was 84 per cent last year, up from 77 per cent in 2016. However, the proportion saving most of the time has fallen. The percentage saving in at least three of the past four years fell from 77 per cent to 73 per cent.
There were huge improvements in the participation rate in hotels and restaurants, up from 27 per cent in 2012 to 77 per cent, and in farming and fisheries from 44 per cent in 2016 to 68 per cent.
All employees over the age of 22 have to be enrolled in a workplace scheme of minimum standards and must opt out to avoid having their pay deducted.
Large companies should be required by law to publish information on their parental leave and maternity pay policies, MPs will say today.
Jo Swinson, the Lib Dem deputy leader, is leading a cross-party push to bring a private member’s bill that would force businesses with 250 or more staff to be transparent about their arrangements.
Nicky Morgan, the former Tory cabinet minister, Harriet Harman, David Lammy and Gareth Thomas from the Labour Party, Caroline Lucas, the Green Party’s co-leader, and Alison Thewliss of the SNP are among the bill’s sponsors. Statutory maternity benefits in the UK are far less generous than in many other European nations. For the first six weeks of leave, women are entitled to 90 per cent of their regular pay, while in the subsequent 33 weeks they are entitled to £145.18 a week.
The government introduced shared parental leave in April 2015, but while 285,000 couples are eligible each year, take-up is estimated to be as low as 2 per cent. The financial implications are thought to be partly to blame because although you can share 37 weeks of pay entitlement (at a maximum of £145.18 a week), fathers are not entitled to six weeks at 90 per cent pay.
Many companies offer more generous packages but fail to publicise their arrangements. Ms Swinson said that forcing big companies to be more transparent would give them an incentive to improve their offer.
She said: “Each year 54,000 women lose their jobs because of pregnancy and maternity discrimination, and men cite concern about negative treatment in the workplace as a significant barrier to taking shared parental leave.
“Asking large companies to publish information about their parental leave and pay policy is a simple, light-touch regulatory change that would have significant benefits. Greater transparency would reduce the risk of discrimination in the recruitment process and encourage employers to improve their parental pay policies.”
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Bosses must not ask women to wear high heels or wear their hair in certain styles, the government has said.
Requirements regarding a woman’s appearance were likely to be unlawful if there was no equivalent requirement for men, the guidance from the Government Equalities Office said. It added that dress codes should not be a source of harassment, such as “women being expected to dress in a provocative manner”.
However, a code requiring all staff to “dress smartly” would be lawful, provided the definition of smart was reasonable, “such as a two-piece suit in a similar colour for both men and women, with low-heeled shoes for both sexes”. The guidance adds that it is likely to be unlawful to require female staff to wear high heels because there is no male equivalent.
Employers are also urged to be “flexible” over religious symbols and not to ban them if they do not interfere with an employee’s work.
Dan Begbie-Clench, a partner at the law firm Doyle Clayton, said that the guide was “common sense” and reflected “recent trends in the courts and society”.
However, Beverley Sunderland, managing director of Crossland Employment Solicitors, said that the advice was too vague, describing it as a “Janet and John” guide.
Unemployment could be heading down to levels last seen in the 1950s, according to a new analysis of Britain’s jobs market.
The jobless rate has plunged since the financial crisis to a four-decade low of 4.2%. A study by Oxford Economics suggests it could have a lot further to fall, potentially recreating the golden era of the postwar boom.
Martin Beck, a senior economist at the consultancy, said there were “striking parallels” between today and the period when unemployment was less than 3% for two decades. The rate touched an all-time low of 1% in mid-1955, shortly after Anthony Eden succeeded Winston Churchill as prime minister.
Then, as now, pay rose more slowly than productivity, reducing the cost of hiring workers and ensuring a low “equilibrium” rate of unemployment — the level at which there are so few people looking for work that wages begin to rise.
Second World War servicemen were promised jobs when the hostilities ended, and successive governments made full employment a priority. Trade unions were persuaded to exercise pay restraint to ensure everyone who wanted work could find it.
Beck detects a similar dynamic in the lost decade of pay growth since the financial crisis. This time, however, the cause is the decline of unions and the threat of jobs being moved overseas or replaced by robots, he said.
“With globalisation and automation, workers just don’t have as much power to bargain for higher wages,” Beck explained. “If the factors holding back pay were to persist, alongside a catch-up in UK productivity, a return to a 1950s and 1960s-style jobless rate is possible.” With unemployment at its lowest since the mid-1970s, many economists — including members of the Bank of England’s monetary policy committee (MPC) — expect wages to pick up. Average pay growth accelerated to 2.8% in February, the first time wages have outstripped inflation in a year.
Beck, however, thinks the similarities with the postwar era suggest the return of pay growth is not a done deal. His findings echo a recent paper co-written by former MPC member David Blanchflower, arguing that the UK is far from full employment. Blanchflower, who left the MPC in 2009, said workers were “frightened” to ask for higher pay.
Britain’s employment rate has hit a record high, joblessness is at a 43-year low and wages are rising in real terms for the first time in a year, according to official figures.
With strong job creation, the labour market has been an economic bright spot for years but pay has been weak and the spike in inflation after the Brexit vote affected living standards.
Real earnings started shrinking a year ago, when inflation overtook pay, but the Office for National Statistics says that the trend was reversed in the three months to February. Earnings grew 2.8 per cent while inflation dropped to 2.7 per cent.
Wages are watched closely by economists because consumer spending, one of the key drivers of GDP, is dependent on household finances. The Bank of England is also following pay for signs of inflation before raising interest rates. It is expected to lift them a quarter point to 0.75 per cent next month.
Beyond pay, the broader employment figures provided reason for optimism. The employment rate, which measures the proportion of Britons available for work, hit 75.4 per cent, the highest since records began in 1971 and the third highest among G7 advanced nations. Some 32.26 million Britons have jobs, the highest number ever.
Unemployment fell 16,000 between November and February to 1.42 million, pulling the jobless rate down from 4.3 per cent to 4.2 per cent — its lowest since 1975. Job vacancies remained at roughly 815,000, suggesting that unemployment will continue to fall in the months ahead.
Ian Stewart, the chief economist at Deloitte, said: “For the first time in a year, earnings growth has outstripped inflation. With more people in work than ever, and three quarters of a million unfilled jobs, the stage is set for further rises in earnings through this year.”
Esther McVey, the secretary of state for work and pensions, said: “Another milestone for employment has been reached under this government as employment reaches a record high, up 3.2 million since 2010, the 16th time the employment record has been broken in the same period,” she said.
“That means on average over 1,000 people have moved into work every day since 2010, and credit has to be given to the businesses who have created those jobs and the individuals who are taking those opportunities.”
Philip Hammond, the chancellor, claimed that record employment should help fix the UK’s chronic productivity problem. “We should expect record levels of employment to drive the productivity performance of the UK economy,” he said.
The numbers made an interest rate rise almost certain. “A lot of the detail in the report suggests the labour market is still tightening,” Philip Shaw, an economist with Investec, the banking group, said. “There’s nothing within the numbers to prevent the Bank from raising interest rates in May,” he said.
Bosses reluctant to give inflation-busting rises despite struggle to hire enough staff!
Employers expect to hand out pay rises of only 2% this year, according to a new survey of 2,000 firms — a blow to workers who have seen their incomes squeezed by inflation over the past year.
The quarterly survey by the Chartered Institute of Personnel and Development (CIPD) due to be published tomorrow, is the latest sign that bosses are reluctant to hand out inflation-busting pay deals despite labour shortages in many sectors.
Figures from the Office for National Statistics this week are expected to show average weekly pay climbed 2.5% in the year to February, the same rate as January and below the current inflation rate of 3%. Unemployment is set to stay at a four-decade low of 4.3%, according to City forecasts.
“So far there’s no tangible sign that wage settlements are picking up,” said Gerwyn Davies, senior labour market analyst at the CIPD.
The gloomy picture painted by the CIPD research counters a rosier view coming from the Bank of England, which in its own survey last week said wages were set to rise by 3.1% in 2018.
Many economists are sceptical about the Bank’s optimism, given that previous forecasts of an explosion in wages have not materialised. In May 2016 Threadneedle Street was predicting pay growth of 3.75% for 2017. Wages in fact climbed 2.5% last year.
Despite record numbers of people in work, the supply of workers has been boosted in recent years by older workers staying on in the jobs market, part-timers taking on more hours, and the arrival of migrants, said Davies.
A slowdown in immigration from the EU since the Brexit referendum could add to the upward pressure on pay. The latest quarterly immigration figures are published by the ONS on Thursday and are expected to show a further slowing of arrivals from the Continent.
Industries that rely on EU workers, including hospitality, agriculture and construction, claim they are struggling to hire enough staff.
However, employers are reluctant to boost pay to attract the workers they need, preferring to squeeze more from their existing workforce or invest in training, Davies said.
The uncertainty of Brexit has also left some firms nervous about their ability to take on higher costs.
“A lot depends how much firms are able to pass on wages in the form of higher prices,” said George Buckley, UK economist at Nomura. “It does look like wages are set to pick up, but the jury’s still out.”
With EU workers leaving jobs Britons don’t want to take, employers are scrabbling for solutions.
It used to be pretty easy for Alex Wrethman to find chefs. The restaurateur would stick an ad online and wait for the CVs to flood in. These days, he must work a lot harder — and even fight rivals for good staff. “It’s such a tough market, we need to get competitive,” he said. “You don’t necessarily want to walk into a restaurant round the corner and start dropping business cards, but if that’s what it takes . . .”
Wrethman estimates 10% of the positions at his three upmarket bistros are vacant, and describes marathon three-day sessions trawling LinkedIn for candidates. He draws parallels with the football transfer market, describing one of his managers as “a bit of a Mourinho” for his aggressive “tapping up” of chefs from other restaurants.
Wrethman’s west London business, Charlotte’s Group, is far from alone in its struggle to find staff.
Britain is hiring. There are a record 810,000 vacancies in the jobs market, according to the latest figures from the Office for National Statistics (ONS). With the unemployment rate at a four-decade low of 4.3%, a slowdown in the number of EU migrants coming to work in Britain is giving many businesses the jitters. Industries from housebuilding to fruit-picking complain of recruitment problems.
One element is missing from this job-seeker’s nirvana, however: the prospect of a pay rise. Traditionally, such “tightness” in the labour market has encouraged wages to shoot up, but average weekly pay grew by 2.4% last year, an improvement on recent performance but still well below the current 3% inflation rate.
Some forecasters — including at the Bank of England — say an acceleration is around the corner. Companies expect pay to rise by an average of 3.1% this year, the fastest growth for a decade, according to the latest survey by the Bank’s regional agents. Yet sceptics say we have been here before: over the past few years Threadneedle Street has consistently forecast a wage explosion that has not materialised. The glacial pace continues to confound economists’ models.
“To a remarkable degree, wages haven’t taken off,” said Paul Johnson, director of the Institute for Fiscal Studies. “There’s a big macro question: why is the British labour market working as it is?”
Wrethman’s experience offers some clues. The hospitality industry has arguably been hit hardest by shortages of workers. According to the ONS, 4.5% of all jobs in food and accommodation services are vacant, the highest rate of any sector. The problems are particularly acute in London and southeast England, where the reliance on chefs and waiters from the Continent has been greatest.
Doubt about their status after Brexit means “the Europeans who are already here are feeling uneasy about the future”, said Wrethman, 37.
That uncertainty, coupled with the weaker pound, has made it all but impossible to attract new staff from the Continent. At the same time, bosses bemoan the reluctance of British workers to pursue careers in the hospitality industry. Surely both the “skills gap” — a mismatch between native workers’ qualifications and the needs of industry — and the unwillingness of Britons to apply for certain jobs could be fixed by a pay rise?
“The idea of a skills shortage is a difficult one for economists,” said Len Shackleton, professor of economics at Buckingham University and a research fellow at the Institute of Economic Affairs, a free-market think tank. “You wonder about stories saying we need more people to pick strawberries or build homes. Why don’t the wages just rise?”
London restaurateurs say pay for chefs and less skilled roles such as kitchen porters has recently risen faster than inflation. There is little evidence of this at a national level, though: ONS figures show rates of wages growth lower than inflation in food and accommodation services over the past 12 months.
Across-the-board pay increases would mean bigger bills for customers, a tough sell in such a competitive industry.
A Brexit-induced skills shortage is more likely to put restaurant chains out of business than lead to higher pay, argued Ewan Venters, boss of Fortnum & Mason, the upmarket London department store that has had a staffing crisis in its restaurants.
“There’s an assumption that if business didn’t go and hire cheap labour from the EU, Brits would earn more,” Venters said. “But it’s not a question of going to Europe to find cheap labour; it’s a question of getting the volume of people who want to work in the sector.”
There is evidence across many sectors that better wages have failed to address longstanding recruitment difficulties, according to Heather Rolfe, a social policy analyst at the National Institute of Economic and Social Research.
Rolfe said low-skilled sectors such as food processing were already feeling the strain because of rises in the national minimum wage. “[Food processing] has to be located where the crops are grown, which is often in areas without many people. Migrants have generally been more willing to move around. There’s little sign that British workers will, even for slightly better rates of pay.”
Last week, Herefordshire-based Haygrove, one of the country’s biggest berry and cherry growers, said it would move part of its business to China because it cannot find enough fruit pickers here.
There are similar issues in some skilled sectors. John Tutte, chief executive of the construction company Redrow, said a shortage of bricklayers could put the government’s housebuilding targets out of reach, despite annual pay increases of more than 10% in the past few years.
“There’s been a skills shortage for years,” said Tutte. “It’s always been difficult to grow a skilled workforce in such a cyclical industry.”
The average salary for a bricklayer is £36,679, according to the website totaljobs.com, but they reportedly make more than £60,000 in locations where demand is high.
Tutte said Redrow has as much trouble recruiting in northern England, where the construction industry employs comparatively few EU workers, as it does in London and the southeast.
Like bosses in the restaurant business, he blames an image problem for the shortage of British recruits. “Workers in housebuilding are not badly paid — there’s no one on the bread line. But how much attraction to be a bricklayer is there among young people? Do they want to be on a site on a wet February morning?”
Redrow recently established Britain’s first housebuilding degree at Liverpool John Moores University, a move Tutte hopes will lend some academic prestige to the sector.
The government has pinned its hopes of plugging the skills gap on apprenticeships. Unfortunately, its flagship apprenticeship levy is turning into a disaster, with numbers of those starting an apprenticeship down 27% this academic year. Many companies complain the funds raised by the levy do not cover training costs, while small firms say they are struggling to navigate the system.
“We train people anyway, but the training we do doesn’t necessarily fit into the format demanded by the apprenticeship levy,” said Tom Molnar, founder of the London bakery chain Gail’s. “We have to put a lot of effort into figuring out how it works. It’s a policy with serious flaws.”
If apprentices won’t save the day, how about robots? A raft of politicians, including the chancellor, have suggested a lack of cheap labour could spur automation — helping improve Britain’s woeful productivity record in the process.
There are two problems, however. First, the most acute staff shortages are in industries least amenable to automation, such as hospitality. Second, much of the low-hanging fruit has already been harvested — witness the self-service checkouts in supermarkets. It is hard to imagine Britain’s notoriously investment-shy industries dropping many millions of pounds on expensive new kit when the future of the economy is so uncertain.
Hungry for staff, some bosses are trying more old-fashioned recruitment techniques. “A few months ago, for the first time ever, we began putting signs in shop windows saying ‘Join us’,” said Molnar.