Another great session of debate and ideas in our 10th Future of Work events, hosted yesterday in London. A huge thank you to all our guests who attended Nomad Foods, Freixenet Copestick, Little Dish, Rude Health, The Collective UK, Lactalis UK & Ireland, Cawston Press.

 

The two topics discussed:

· The collateral impact of the pandemic – its effects today on the workplace and the relationship between workforce and leadership. Will hybrid working be everlasting or is there a ‘creeping back to normal’ for days in the office?

· The impact of essential universal CPI measures and the effects on staff motivation within commercial teams today. Is the subject becoming personal and flaring up the cost-of-living debate? Inviting comments, answers and thoughts to continue the debate - all ideas welcome!

#futureofworkforum #futureofwork

 

For those who are interested in the full summary of the discussion - read here:-

Introduction to our 10^th edition of Future of Work - Friday 8^th July 2022

We meet again fellow Forumers and it is with pleasure I welcome you to The Ivy Club to host our 10^th forum!

To kick start and inspire the following discussion topics I have taken several facts that surround us in the economically fragile world in which we all live, these make for compelling reasons why the relationship between employee and employee, home and work matter so much today, more than ever before.

 

There are five key subjects that continually challenge the future of work, be that at home or in a workplace……

The Energy crisis

State Brent crude now over $105 a barrel, compared to less than $40 in this time two years ago and $77 this time last year.

In a survey of 500 workers commissioned by Citrix Technology and published in May 50% of workers want to keep working from home due to the rising cost of commuting.

Those same workers, 66% said employers should help with the cost of travel

Of the same respondents 25% in fact say they will return to the office for a minimum of three days per week when the winter arrives due to high heating bills.

 

The Cost of staple food items

in January 2020 the price of an 800 gramme sliced white loaf was £1.03 and today it is £1.18 an increase of just over 14.5%.

 By comparison a wholemeal loaf was £1.06 and it's now £1.09 showing an increase of less than 3%.

If we look at a dozen eggs in 2020 those would have cost you £2.26. Today they cost you £2.57 with an increase of nearly 14%

As for milk we know that in January 2020 the price of a pint was 44p and in May 22 it was up at 52 pence showing an increase of just over 18%.

Indulging in the subject just a little bit more it is very interesting to note that

 a dozen Tesco private label free range eggs would cost you £2.20 and the same amount of eggs for Waitrose essential would cost you £3.65 A difference equivalent to 65% more expensive between Waitrose and Tesco.

 

News on Inflation and Consumer Price Index

 

Inflation today is at 8.58% today, it has hit a 30-year high and CPI is set to peak at 10% by Q4 2022.

The CPI inflation rate will continue over the remainder of the year as the war in Ukraine and the pandemic fallout drive up energy and food prices.

Grim forecasts predict growth will contract in the last three months and the cost squeeze will see households rein in their spending very suddenly from mid-October until Spring 2023 unless there is a relaxation on fuel duty and energy prices.

Compare with other major developed world economies:

USA 8.6%, Germany 7.9%,  Russia 17.8%,  France 5.2%,  Switzerland 2.9% Japan 2.4%

Bank of England interest rates at a 13-year high from a historical low of 0.25% to 1%,

Mortgage interest rates are on the rise exponentially predicted to reach 4% in 12 months time unless there is a new position on inflation.

The pound is stuck against the dollar @ $1.20 and the euro at @1.18 euros. No sign of improvements despite being told we would be a stronger nation economically post Brexit in our trading relations.

Future of Work today

Published by The Mail Online on 17^th May 2022 British workers lead the world in refusing to return to the office. Australia, Canada, Hungary & Netherlands follow in that order.

Almost 25% of British workers would rather quit finding another job than go back to the office for more than an average of two days per week.

Women in the workforce are said to be leading the so-called ‘flexidus’ of staff demanding remote and less office working.  52% admit they have considered leaving their jobs due to a lack of flexibility

As we grapple with the whole notion of the redesign of work. It is now fundamentally the right time to do so. The pandemic has induced changes and ways of working and with the ever-changing and increasing pace of digital communication making remote working more convenient it is less about where and more about how people will work tomorrow.

Social capital however stands in the way of WFH or RW. It must continue to influence the return to the office as a critical part of the hybrid environment. inviting the workforce back to the place of work for this very reason must be made even more compelling.

And therein lies the dichotomy…. We challenge the need to be present, but we are inherently social animals and work best in hives.

At the beginning of June, more than 70 companies kicked off a four-day work week. Over 3,000 employees will be working a shorter week, with no impact on salary, between now and December as part of a nationwide pilot project.

What will come of this I wonder…?

 

Employment

Unemployment currently stands at 1.3 million people, a drop of only 100,000 since the pandemic but this was 2.6 million people 10 years ago. This is not simply due to more people now in gainful employment but largely due to the exodus of working masses, the Europeans post-Brexit (well over 350 000) which has significantly shrunk the labour pool the labour so let’s not be deluded by the perceived positive reduction.

Yesterday I was with one of the UK's largest strawberry farmers with hundreds of acres in Herefordshire who explained to me that every day right now his wastage is at record highs, almost 20% because he doesn't have sufficient pickers to gather the ripe fruits of the day and they lay in his fields wasting. The day Brexit was announced was the start of his financial demise…we could see the problem that those Brexiteers had not even considered when they voted.

By comparison, I have a dear and very good friend who runs hey sizeable 145-bedroom 4* hotel in Christchurch Hampshire. today they can only run their hotel at 68% occupancy because they physically do not have enough staff to turn bedrooms and manage housekeeping for tomorrow's guests. Likewise, they can only offer up to 80% capacity in the restaurant because there physically aren't enough serving staff. In turn with the cost of everything in the hotel going up they also have two raise their prices in double-digit %s simply to get a better return with much less capacity than they can handle.

 

A couple of interesting examples of employment challenges within FMCG……

 we have tracked the following over the last four years

In 2017 approximately one in four applicants of varying level marketing roles were EU citizens, non-UK citizenship.   Today for similar roles in marketing one in 12 are now Europeans. The migration of pan-European marketing professionals has virtually ceased.

By contrast, in the supply chain in the past two years, we have tracked one in three applicants who are foreign nationals and have been in the UK for less than 18 months. In a function that is in unprecedented high demand for skilled labour, these migrant professional workers have arrived only to find they do not satisfy the criteria for selection in a role that is all about understanding the UK retail and wholesale supply chain landscape. Both employer and worker find themselves frustrated.

Finally, to add a different comparison again……. in the past 18 months that we have been recruiting within the Pharmaceutical industry of sorts and involved in the recruitment of pharmacist and Superintendent pharmacists……… we have measured that 94% of applications within this professional function are qualified with degree and above in pharmacology and almost entirely of British Asian descent. It makes the job of D&I protocols a challenging prospect when the applicant demographic is so unbalanced.

Since the beginning of 2021, we have noticed a surge in salary by the senior national account manager community.

according to the 2021 salary guide published by The Simmance Partnership, the average salary of as SNAM was 63,716. Today we are receiving instructions for similar roles at salaries of more than £70,000 with a cap up to £80,000 for the same position.

The key driver to this somewhat overinflated salary is employers expecting to pay for skilled, knowledgeable talent and not accepting fakes.

 The job of the SNAM has changed beyond simply overinflated job titles. It also now clearly distinguishes the blue-sky gap from the insufficiently experienced NAM band of around £52,000.

Let the discussion begin!

 

Steve Simmance, July 2022

 

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