Weekly news round-up: from less office space to left behind young people

This week’s news included reports of large companies reducing their estate, the continued cooling of the UK labour market, government figures on the gender pensions gap and concerns about economically inactive young people.

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Large companies plan to reduce office estate

About half of the world’s largest companies plan to reduce their office space by up to 20% by 2026, according to a survey by Knight Frank.

The trend among the biggest businesses is to take less, but better, space, with a strong push towards better-quality, amenity-rich, sustainably accredited space that better aligns with prevailing work styles and supports broader corporate ESG strategies.

Government publishes report on gender pensions gap

The gender pensions gap stands at 35%, according to the first major government report on the issue, although that figure doesn’t include those who have no pension wealth when they reach retirement age.

The report says there has been progress since 2006. Between 2006 and 2008 the gender pensions gap was 42%. Auto-enrollment [AE] for pensions has played a significant role. Indeed the gap for those who are eligible for automatic enrollment is currently 32%.

AE has increased the number of lower paid workers paying into workplace pension schemes and was phased in for different sizes of employers between 2012 and 2017. In 2021, 4.8 million more men and 4.4 million more women paid into a workplace pension compared to 2012. Of those, a million men earned between £10,000 and £20,000 per year in real terms compared to 1.8 million women. Nevertheless, bringing more lower paid women into pensions savings can increase the gender pensions gap.

UK labour market cools further in May

Hiring activity across the UK remained subdued in May, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global.

Recruitment consultants suggest that caution around the outlook and delayed decision-making led to a further marked fall in permanent staff appointments, while temporary billings rose only slightly. At the same time, vacancies expanded at the second-softest rate since early 2021.

The higher cost of living and shortages of skilled candidates drove sustained increases in starting pay for both permanent and temporary staff. However, the REC says rates of pay growth have softened since April amid a further improvement in overall candidate numbers.

Neil Carberry, REC Chief Executive, said: “We’ve been hearing more and more about differences between sectors in hiring rates over the past few months, and today’s data really highlights this. While hospitality, healthcare and engineering remain strong, construction, IT and retail are all weakening. Despite the overall temporary work market continuing to grow – and permanent hiring declining from the sugar rush of 2022 – the story can vary widely across different businesses as their economic outlook remains unclear.”

CBI wins vote of confidence amid claims of misconduct

The Confederation of British Industry (CBI) has won a key confidence vote over its future after members of the UK business lobby group overwhelmingly backed it following a series of reports about sexual harassment and rape. The CBI said that 93% of the 371 members who voted backed its plans to reform the organisation. Nevertheless, some companies, including Rolls-Royce, said their membership remains suspended.

Meanwhile, the British Chambers of Commerce (BCC) is establishing a new business body composed of some of the UK’s biggest companies. The BCC says its Business Council will seek to “design and drive the future of the British economy.” Heathrow, BP, IHG Hotels & Resorts and Drax are among the founding partners.

Resolution Foundation highlights economic inactivity of young people

Economic inactivity due to ill health among 18-24 year-olds has nearly doubled over the past decade, and is heavily concentrated among those struggling with education, with four fifths of young people who are too ill to work having only qualifications at GCSE-level or below, according to a report from the Resolution Foundation.

The report Left behind notes that overall levels of worklessness among young people are low. However, it says the number of young people not working due to ill health has nearly doubled over the last decade, up from 94,000 in 2012 to 185,000 in 2022. It calculates that almost a quarter of workless young people are inactive because of ill health, up from less than one in 10 in 2012.

The Foundation adds that the trend has gone completely under the radar, with policy makers’ attention focused instead on rising ill health among older workers.

Treasury launches consultation on umbrella companies

The Treasury has launched a new consultation which considers policy options to regulate and tackle non-tax compliance in the umbrella company market, both from an employment rights and tax perspective. Changes could be implemented as soon as April 2024. More than 500,000 people in the UK, ranging from nurses and teachers to care workers and consultants, now work through umbrella companies. Experts say any rules will need a strong enforcement framework.


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