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A week in HR: Job losses, consultant’s pay and holiday increases

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NewsThis week, Lucie Mitchell reports on yet more job losses, a hike in consultant fee rates, the removal of the VAT staff hire concession, and the increase in holiday entitlement.


More job losses were announced this week, this time at the Daily Mail, with 1,000 jobs to go at its regional newspapers. This number is double what the company estimated at the end of last year, due largely to the fact that it expects a 37% fall in regional advertising sales this quarter. More details can be found on the BBC News website.

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In further depressing news, a report by business advisory firm Deloitte, on managing talent in a turbulent economy, has found that 30% of senior executives believe the recession will only deepen from here, with just 5% thinking that the worst is behind them. The survey also found that cutting costs is now more important than acquiring customers, while 44% cited a decline in employee morale, rising to 60% in financial services. For the full report, visit: www.deloitte.co.uk/talentinaturbulenteconomy.

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But it’s not all doom and gloom, especially if you are a self-employed consultant. A recent survey of independent consultants’ fee rates by Skillfair has found that consultants are earning more on average than a year ago, despite the recession, with a 7.5% increase from last year’s rate of £560 per day to an average of £602 per day this year. In addition, 78% of the consultants surveyed expect to do better than, or as well as last year. To see the full survey results, go to: www.skillfair.co.uk/survey.

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More encouraging news comes from McDonald’s and Vodafone, as both companies have announced they will be creating job opportunities. Up to 6,000 vacancies at McDonald’s could be filled by the long-term unemployed this year, as the company extends nationwide a regional pilot with job centres. The original pilot involved a scheme in which 100 people participated through Local Employment Partnerships. It is now being rolled out to all 1,200 McDonald’s restaurants, which will advertise vacancies.

Vodafone has confimed that it will be creating 200 retail jobs after its plan for 50 new stores was secured. The store expansion programme has already seen 40 stores open nationwide – the remaining 10 will be opening in the coming weeks.

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Meanwhile, the government announced last week that the VAT staff hire concession will be withdrawn from 1 April 2009. The staff hire concession allows agencies who place temps to zero-rated VAT organisations to only charge VAT on the margin of a placement, rather than on the whole cost of the placement. The Recruitment and Employment Confederation (REC), which spearheaded a campaign to persuade the Treasury and HMRC to defer its implementation until after the worst of the economic downturn is over, has expressed its extreme disappointment at the decision:

“We are dismayed that even after producing evidence that up to 150,000 temporary jobs are at risk, the government decided not to heed our advice to defer this tax on jobs,” said Kevin Green, the REC’s chief executive.

The CBI’s director of HR policy, Katja Hall, said that it was a “retrograde step” at a time when businesses need help to survive the recession. “Adding to the cost of hiring temporary workers can only add to the growing unemployment figures. The concession was designed to be temporary, but we believe the government should wait until the recession is over.”

More information can be found on the HMRC website.

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In sickness absence news, the National Institute for Health and Clinical Excellence (NICE) issued guidance on Wednesday about managing long-term sickness absence and incapacity for work. The guidance aims to complement existing initiatives, whilst helping to reduce the number of employees moving to long-term sickness absence and promote return to work. To find out more, visit: www.nice.org.uk/PH19.

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And finally, for those of you who didn’t know, holiday entitlement increases come into force from 1 April, going up from 24 to 28 days for all full-time employees. It would seem there are quite a few small businesses in the dark about this change, with 65% unaware of the increase, according to new research by humyo.com. When advised of the change, 55% of respondents said it would have a detrimental impact on their business, and two-thirds felt the increase should be scrapped in the current economic environment.

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