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A week in HR: A winter of discontent?

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HR weekIt’s been another week of outrage at the UK banking sector, with Gordon Brown reported as “very angry” and even a suggestion that HR is partly to blame for the current bonus rows. With more depressing figures on the state of the UK job market, Christiana Tollast reports that there is however a silver grey lining for the future of Britain’s workforce, as there are tough calls on the Government for the retirement age to be scrapped.



Last week, we highlighted the HR blog of Michael Carty, deputy editor of IRS Pay and Benefits Bulletin, on how bonuses are particularly controversial during a downturn.

On Monday of this week, the BBC reported that Gordon Brown was “very angry”, with a statement from his spokesman that said Mr Brown wants bankers to consider waiving their right to bonuses, regardless of whether they are legally entitled to them.

On Tuesday, the story rumbled on with the BBC then reporting that the two former bosses of the two biggest casualties of the banking crisis, had “profoundly and unreservedly” apologised for the failure of their banks. As we go to press, we await to hear the findings from the questioning of the bosses still in place at the helm of Britain’s leading banks, as they appeared before the Treasury Committee on Wednesday.

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Meanwhile with Citigroup and UBS writing claw back provisions into staff contracts so they can recoup large bonus payments if business performance suffers, HR consultant Jon Ingham questions why this hasn’t happened before now and argues, HR is partly responsible for the current bonus crisis.

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Staying with the downturn, it’s more gloomy news for the UK’s job market, reported to be deteriorating at an ‘alarming rate’, according to John Philpott, chief economist at the CIPD. The latest quarterly CIPD/KPMG Labour Market Outlook (LMO) survey has also found the size of average pay rises is shrinking.

  • More than one in three employers have reported they plan to cut jobs in the first quarter of 2009 – double the figure reported in the previous LMO survey last autumn.

  • One in eight employers don’t intend to conduct a pay review in 2009, while those that do predict an average increase of just 2.6%, compared with 3.5% expected last autumn.

Speaking about official labour market figures published on Wednesday, which revealed that UK unemployment didn’t top the two million mark at the end of 2008 as expected, Philpott said:

“It was widely expected that today’s official figures would have shown there were more than two million people unemployed at the end of 2008. It is likely that the published quarterly statistics were still affected by the inclusion of data from the early autumn before the second wave of the credit crunch started to have a big impact on employers recruitment and redundancy plans.”

Unemployment currently stands at 1.97 million but is expected to rise above two million in the three months to January.

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And with the recession set to bite even harder, 90% of UK companies with a defined benefit (DB) pension scheme are worried about the impact of their scheme on their business. The 4th annual PricewaterhouseCoopers Pensions Survey questioned 98 companies, including 29 FTSE 100 organisations with some depressing findings:

  • 17% intend to close their pension schemes to future accrual for existing employees

  • 80% have closed existing DB schemes to new employees

  • 81% are concerned about the level of cash commitments to their UK DB pension schemes.

Marc Hommel, partner and UK pensions leader, PricewaterhouseCoopers LLP, commented: “Companies need to look at the risks their pension schemes pose to the business, including the potential impact on the balance sheet, profit and loss, credit rating, cashflows and dividends. While almost half of companies are considering buy-out, it is not always the right solution – alternatives may be cheaper or more effective.”


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And it seems that the pension crisis is not the only issue HR directors might be worrying about in these unprecedented economical times, as a new survey has found HR directors lacking in confidence about meeting HR challenges.

Of over 300 senior HR personnel polled across the UK on behalf of talent management consultancy, Ochre House:

  • Less than 20% felt completely confident in their ability to meet significant challenges

  • 86% of respondents identified change management as a significant challenge, 83% leadership succession planning and 72% leadership development.

  • 100% of senior HR professionals in the banking and financial services sector saw change management as a challenge.

Ochre House’s managing director, Sue Brooks, comments: “The rapid progress of the downturn has left many senior HR specialists facing problems that they simply didn’t expect to be dealing with.” Brooks concludes the survey highlights a “major capability gap”, which must “be addressed as a matter of urgency”.

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On a more positive note, there has been a call for radical action against age discrimination in the workplace with the airing of Channel Four’s dispatches programme ‘Too Old To Work’, broadcast on Monday evening.

Commenting on the programme, Catharine Pusey, director of The Employers Forum on Age, said: “Today, with people living longer than ever before, the rationale for enforcing a default retirement age of 65 is completely archaic. The EFA’s long-term campaign is to persuade the government to commit to remove the default retirement age in 2011 – rather than merely reviewing it.”

Chris Ball, chief executive of The Age and Employment Network (TAEN), was in agreement with Pusey: “It [the government] must scrap the default retirement age without further delay.””

More information can be found at TAEN’s 2008 online survey of 370 jobseekers aged 50+.

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Continuing on the theme of legislation, a new Act of Parliament that came into force on 26 January 2009 means businesses must ensure their web and email filtering technology and acceptable use policies are up to date.

Bradley Anstis, director at Marshal8e6, a web and email security technology provider, highlights Sections 63 to 67, Part 5 of the UK’s Criminal Justice and Immigration Act 2008, which make it an offence to possess pornographic images of an extreme nature.

This means, according to IT lawyer, Dr Brian Bandey, that company bosses could be found guilty under the Act if an employee downloads and stores on their work PC or laptop images depicting extreme pornography. In addition, they would be “vicariously liable” under ordinary safety at work legislation if they do not take reasonable steps to prevent such images from being stored on their networks and they are then seen by another employee.


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