Tag Archive | "unemployment"

Generation Y accountants want better work-life balance

Despite high levels of unemployment, Generation Y accountants are optimistic about their future prospects and eager to grasp the varied career opportunities the accountancy profession has to offer.

These young, fresh accountants have high expectations of what the employment experience will provide for them. Gone are the days of being exceedingly “grateful” for the chance to work at a particular firm, they now see work as a two-way street, that provides benefits for both employer and employee.

Last year a joint publication from the ACCA and Mercer, an HR consultancy, described Generation Y as the “über confident generation”, who whilst valuing security are more than prepared to walk away if things are not going according to plan.

Generation Y: Realising the Potential claimed that today’s graduates demand more from employers. They are looking for dynamic careers and many want to use the accountancy training they have received in the broader world of business. 21st century finance professionals have a clear and confident vision of the way their career will progress; they are motivated by money but also want job security.

Employers will still have to pay well to attract good talent but Generation Y candidates also want a good work-life balance and to work for a brand that fits in with their own values.

ACCA UK head Andrew Leck said flexibility is all important to today’s graduates. They want to know where they can go with their qualification. Mobility will have a key role to play when it comes to choosing their career and they feel that changing employers will provide them with broader experience.

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Unemployed accountants for contractors can turn to CABA for help job seeking

The Chartered Accountants Benevolent Association launched two new services last week to provide support and advice for unemployed contractor accountants.

We now have an unemployment rate of 8.4% in the UK after another 48,000 people lost their job in the final quarter of 2011. Unemployment is now at its highest for 16 years.

The second most likely reason for chartered accountants contacting CABA last year was unemployment and these latest services have been designed to create a structured approach when it comes to providing help.

The first service is called Workfriend and it’s an interactive online system for career management. It operates 24/7 and includes audio and video, written materials and a variety of other tools. Users can also speak to an individual career coach over the phone for a period of three months. Workfriend aims to help those who have recently lost their job and want to refresh their job seeking skills.

For those accountants who have been out of work for a while, CABA has launched Career Coaching. Although this is a face-to-face service, there are also learning events and online support. Each participant will be allocated a professional career coach who will provide bespoke guidance over a period of between three and six months. The coach will also be able to help job seekers with government agency advice.

CABA’s head of operations, Helena Coxshall, said that calls from unemployed accountants come through almost daily. The majority of them want help and support and it doesn’t look as if the number of calls is likely to reduce in the immediate future. CABA therefore decided it was time to offer dedicated services to help unemployed accountants.

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FPB calls for national day to recognise UK entrepreneurs

Freelancers may be interested to learn that The Business Woman’s Network and the FPB are supporting the call for a national day to celebrate UK micro business owners.

The online business knowledge website wanobe.com launched the idea of a day to celebrate the UK entrepreneurs who run the 4.5 million small firms in Britain.

David Noble, the managing director of Wanobe.com said the men and women who run the UK’s small businesses represent dynamism for the battered economy at a time of high unemployment and are the nation’s unsung heroes.

95% of all companies in the UK are micro enterprises and between them they employ 33% of the workforce. Noble says it’s now time to acknowledge the vital role entrepreneurs play in driving the economy.

The FPB has already launched its own initiative called ‘Get Britain Trading’. Phil McCabe, the PR manager for the Forum, said although micro-business entrepreneurs are spearheading the fight to drive the British economy, a lot of people have no idea what it takes to run a business. Having a dedicated day to celebrate the contributions and efforts of small business entrepreneurs would be a wonderful way to highlight how commitment, creativity and bright ideas generate new jobs and help stimulate economic growth.

The Business Woman’s Network’s Mandie Holgate, explained that there are now more than 950,000 self employed females in the UK and around 15% of firms are majority owned by women. They should be extremely proud of the contribution they make to both society and the economy.

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Should contractor accountants be prepared for a decade of low salary increases?

Employees, including contractor accountants, should be prepared to see their salaries increase at a much slower rate over the next decade than they did in the noughties, according to the CIPD’s chief economic adviser, John Philpott.

ONS data shows that the average annual earnings for a full-time employee in April last year was £25,879. This represented a 37% increase on 2000’s figure, or if you take CPI inflation into account, a real terms increase of 16%.

Mr Philpott explained that we saw strong economic growth throughout much of the 2000s. Inflation and unemployment were low and this enabled earnings to improve. However, those conditions are unlikely to reappear until at least 2015 and in the meantime employees could feel frustrated by their pay packets.

Philpott predicts that the first half of this decade will see the tougher conditions we have experienced since the onset of the credit crisis continue to bite. Rising unemployment puts downward pressure on pay settlements and average earnings are unlikely to rise above about 2% a year.

If this situation persisted until 2020, average salaries would rise to just £30,000 and inflation would cancel out the increase. But Philpott said that is a worst case scenario and he hopes to see growth picking up during the second half of the decade. If that happens, average earnings growth for the decade should be around 3%, meaning a median salary of £34,000 in 2020.

Earnings capacity will be influenced by a number of factors, including skills and experience, and employers will pay a premium for people with skills that are in high demand.

Meanwhile, the Department for Business, Innovation and Skills has launched a consultation into proposals to make it easier for investors to understand company reporting and to encourage more detailed data to be published about the pay rates of executives.

The consultation will also consider whether companies should follow the guidance of the Women on Boards report and publish data showing how many women are board members.

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If you want to freelance then come on in. But make sure you’re good enough first.

I got involved in a fairly interesting little debate recently: when is it a good idea to encourage people to compete for your own market? This is not quite as silly a question as it sounds. The government has already stated that it sees a flexible workforce as a key driver to our economic growth and is looking at encouraging people to build their own businesses if they want to do so.

OK, so the latest jobless figures, the rather depressing statistic that most newly created jobs aren’t going to UK residents and growth is still something of a twinkle in Osborne’s eye might seem to indicate that we have bigger problems to solve. Nevertheless, it’s always good to know that The Powers That Be think that what you do is of value.

But this leaves something of a dilemma. Especially for the PCG who are, as we all know, the only real voice speaking up for the freelance workforce. Quite rightly, they are aiming to ensure that if someone wants to take up the freelance banner, they have all the information they need to make a success of it.

Sadly, that also means pointing out the downsides. Which are considerable.

Firstly we still have IR35 and, inherent in that particular stupidity, the feeling that HMRC and, to a lesser but still significant extent the Treasury, still think that we are doing what we do to step around paying taxes. Which we aren’t, of course, but let’s not go over that again. That attitude manifests itself in many ways: the AWR would be a lot less of an issue if it had been drafted specifically to exclude incorporated workers, for example. To any logical mind, career freelancers are not in scope of the AWR and never should be, but still there is that “genuinely in business” caveat, as I may have mentioned in the past, so clearly HMRC still don’t really understand why we do what we do.

Anyway, leaving that well-trodden path to one side, it should be obvious, but often isn’t, that the other thing a freelancer needs is something to sell. After all, you are selling your skills and expertise, whether you’re building websites for local businesses, doing safety audits for nuclear power plants or running hundred million pound projects. That means that you need to have a fair bit of experience and expertise to sell on the open market. And that means that freelancing might be a valid career choice but, like boxing, you have to put in the roadwork first.

Of course there are always exceptions: I know of people who have never held down a “real” job and went straight from college to freelance, either by being very clever or very lucky. Or both.

So freelancing is a career step, but it has to be one that comes a little later in life, when you have learned enough, not only about your own subject but about business in general. It’s like skydiving, where stepping out of a perfectly serviceable airplane is a hopelessly stupid thing to do – until you do it and immediately want to do it again and again…

So, going back to the original point, perhaps the line should be not to encourage people to turn freelance, but to make sure they know that they need three things first – expertise, experience, and understanding. The first two are up to you but PCG are there with the third, in spades.

So the real message is if you want to freelance then come on in and we’ll do what we can to help out. But make sure you’re good enough first.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

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Employment statistics contain a glimmer of hope

The latest employment statistics released by the ONS last week should bring a crumb of comfort to Britain’s younger generation.

895,000 young people were registered as unemployed between February and April this year, the lowest number since April 2009. Unemployment across all age groups also dropped to 2.43 million.

Kevin Green, the chief executive of the REC, said the reduction will be welcomed but warned that this could be the calm before the storm. Ten of thousands of young people will be leaving full-time education in the next few months and a large proportion of them will not have a job waiting for them.

The picture looks mixed for those in the 50-64 age bracket. 36,000 more people in this age group joined the working populous but the number claiming Jobseeker’s Allowance also increased and this group also has the highest proportion of people who are long-term unemployed; i.e. without a job for more than 12 months.

Meanwhile, prospects are improving in the City. The MD of Marks Sattin, Dave Way, said there has been a visible boost in middle tier employment amongst the 35 – 49 age group in City firms and finance and accountancy workers are confident they will receive a salary increase in excess of 8% this year.

The director for employment at the CBI, Neil Carberry, said the private sector seems to be creating jobs and he hopes this trend will continue. However, long-term unemployment is still a serious problem and the government must tackle the structural causes of this in order to get the UK working.

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Will the Olympics get London working?

Boris Johnson, the Mayor of London, has said that more than 2,000 people have gained a job or been taken on as an apprentice as a direct result of a jobs and skills drive throughout the GLA.

Between April last year and March this, over 1,100 people joined apprenticeship schemes operated by the Greater London Authority Group and its contractors. Mr Johnson is now well on the way to meeting his own target of creating 3,000 apprenticeships by next year.

The Mayor has also secured jobs for more than 1,000 out of work individuals in the past year by requiring suppliers to the GLA to provide job and training opportunities as a condition of obtaining a contract.

Johnson’s programme uses public sector procurement to combat unemployment and is the first one to do so in the UK. The GLA has been talking to the government and large organisations to encourage more regions to take up this approach.

The London Organising Committee for the Olympics has now adopted the scheme, as have the Olympic Delivery Authority and Crossrail.

Meanwhile, construction firms working on Olympic projects have been warned that HMRC will crack down on any breaches of National Insurance, tax or national minimum wage regulations.

The Director General of enforcement and compliance at the Revenue, Mike Eland, said HMRC wants to help employers and contractors understand their obligations but it will also deal with people who break the law deliberately. The Olympics are a great opportunity for British companies but they must comply with employment and tax obligations.

He went on to reassure honest businesses that they have nothing to be concerned about but said that deliberate tax evaders would be tracked down and liable to criminal prosecution.

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Businesses are reasonably confident but consumers are not

New research from KPMG shows that whilst the majority of UK companies are optimistic about the prospects for the future, the complexity of rules and regulations are still a barrier to growth.

YouGov conducted the survey of more than 500 firms and discovered that 72% of companies think there is an opportunity for their business to grow despite the government’s austerity measures.

56% of businesses are still confident about the general outlook for their company and 47% said overseas opportunities are helping UK firms compete better globally. 26% of the survey’s respondents also reported an increased production capacity.

60% of businesses and limited company contractors said they were concerned how the budget would impact their firm and 52% highlighted the fact that complicated rules and regulations restricted their ability to grow. 43% of business owners are also still concerned that it is hard to access funding from the banks.

KPMG’s head of UK markets, Malcolm Edge, said businesses agree that the government needs to do more to encourage growth. Companies need the assurance that something will be done to reduce bureaucracy and provide support to help companies achieve sustainable growth.

Whilst businesses are generally optimistic, the opposite is true of consumers. The most recent report from Nationwide shows a significant fall on consumer confidence last month.

The chief economist at Nationwide, Robert Gardner, said consumer confidence has now fallen to its lowest level since the institution started its regular survey.

There are many factors that could be contributing to this, he continued. We still have a fragile labour market, high unemployment and a weak growth in salaries. There is little sign of inflation easing and disposable incomes have been hit by rising fuel costs and the increase in VAT. The economic recovery is still sluggish and there was not much positive news last month to boost consumer’s confidence, he concluded.

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Lack of new opportunities for middle aged Britons in 2010

There are nearly 11 million workers aged between 35 and 49 in the UK and yet they have missed out on the 350,000 new job opportunities created in 2010.

There are now 2.9% fewer Britons in this age bracket who are in work compared to the start of the credit crisis in the spring of 2008, according to recently published figures from the CIPD.

Dr John Philpott, who authored the report, said it was unclear why this group has been bypassed and it could simply be that they have received less support from the people who make the policies. However, this demographic group still has reasonably high employment rates and therefore is not a cause for social concern. Another possibility is that this middle age group is at the pinnacle of their career earnings and therefore employers may find their salary expectations less appealing than workers who expect less salary.

The Work Audit from the CIPD also found that, out of the 350,000 new jobs created between quarter one and quarter three, 63% went to employees, 30% were created by the self-employed and freelancers, 6% were accounted for by unpaid workers in family businesses and 1% by government job schemes.

However, 95% of those additional workers in employment are working in part-time roles and around 33% of roles are on a temporary basis only. Permanent full-time jobs for employees have not experienced a recovery this year. Women have not really benefited from the additional jobs as 289,000 of all the newly created jobs went to men! This could be because more women than men work in the public sector and it increased in size slightly during the recession whilst the private sector was making redundancies.

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What does 2011 have in store?

Contractors could be amongst those set to benefit from internal skills shortages at UK firms as we go into 2011.

The Chartered Management Institute recently said that 43% of managers in the UK think they cannot fulfil their objectives for next year with the staff they currently have. As a direct result, 48% are expecting to make further redundancies in 2011. This could lead to openings for highly-skilled limited company contractors as companies look to complete tasks without increasing the size of their permanent workforce.

The CMI’s chief executive, Ruth Spellman, said that 2010 has been a very difficult year for managers and in many cases they have had to deal with the difficult conditions without a suitable team.

There are also conflicting reports on the state of the UK economy and its jobs market. The latest figures from the ONS show that unemployment reached 29.13 million in the quarter to October. 33,000 of the 35,000 job losses were in the public sector which is to be expected considering the government’s austerity measures.

The CIPD says the figures bring no joy to jobseekers and its chief economic advisor, Dr John Philpott, said the data was far worse than expected. He believes the jobs market has run out of steam which does not bode well for prospects in 2011.

The British Chamber of Commerce, on the other hand, said that whilst the figures were disappointing, they gave no cause for despondency and longer-term trends point to a strong labour market.

The REC was also disappointed by the latest figures. Kevin Green said that employers are still cautious about hiring new employees but he still believes growth will return to the jobs market in the New Year. However, contractors, temporary staff and interim workers are likely to play an important role in helping businesses meet increased customer demand.

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Private sector can absorb public sector fallout

In what seems to be a contradiction of other recent reports, the latest quarterly job survey from the CIPD and KPMG claims that public sector redundancies will be more than offset by new private sector jobs.

The latest Labour Market Outlook recorded a figure of +11. This figure is a based on the number of employers planning to increase their workforce compared to those who plan a decrease. Whilst the public sector recorded a negative figure of -44, the private sector registered +39. In the summer the balance was +2 and we have now seen three consecutive quarters with a positive balance.

The chief economic adviser for the CIPD, Dr John Philpott, said there are now encouraging signs of increased buoyancy in the private sector job market. However, he did point out that it remains to be seen whether this will continue after the pre-festive season jobs surge and he didn’t go as far as to rule out a rise in unemployment next year.

Sectors that expect to increase recruitment levels during the final quarter of the year include manufacturing (+51), IT private sector services (+71) and consultancy (+44). Decreases are expected in central and local government (-95 and -65 respectively) and transport and communications (-39).

41% of public sector bodies will be making redundancies before the end of 2010 and these are expected to affect 14% of their employees. Whilst the average cost of making an employee redundant is £12,000, in the public sector it is £19,600 as opposed to £9,350 in the private sector.

Obviously everybody hopes that the latest LMO data is concrete evidence that we are witnessing a sustained improvement that will enable the private sector to absorb the public sector fallout.

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Going up…

A while ago I wrote in another blog about a potential problem with the IT industry in the UK, where the bottom of the career ladder was being rapidly pulled up by the continuing off-shoring of UK jobs. At the time I was just speculating out loud, but some recent numbers have made me think.

For one thing, IT graduates have the highest unemployment rate of all, at around 17%. OK, so IT is notorious at preferring experience to paper qualifications at the best of times, but this is an extraordinary figure when you consider just how much IT work is out there, even in these straitened times.

So where are the IT jobs going then, if not to the UK workforce?

If you look at the numbers of ICTs being granted you might get a bit of a clue. A recent set of figures from the Government gives a very disturbing picture. For most occupations (and the list ranges from medical practitioners to magicians), the trend is actually fairly level; for example, 80 ICTs for electrical engineers in 2000, 95 in 2008. Hardly an issue.

But look at the IT trades – programmers from 290 to 875, Business Analysts up from 255 to 1050, Project Managers from 290 to 1450. The figures stop at 2008, when the rules were changed, but the trend continues upwards: recent figures from the Home Office show a 67% rise between Q1 2009 and Q1 2010.

I agree you have to take these numbers with a bit of a pinch of salt. For instance the 2009 to 2010 increase is for applications, not ICTs actually granted. Even so, it’s clear that the tend is ever upward. What’s more, it doesn’t take long to find job adverts for IT roles at rates that are well under any kind of market value. Say it quietly, but surely people are not advertising roles nobody would take on just to prove they can’t recruit anyone so please can we have an ICT instead? Plus, just to rub some of that salt into the wound, the offshore companies are taking on UK workers as part of an outsourcing deal and then making them redundant at a fair old rate because the work is now being done “elsewhere”.

And what really annoys me is the abuse of ICTs in the first place. These are meant to be used to transfer skilled people for specific roles within a multinational organisation. My experience of some of these workers – and perhaps I’ve just been particularly unlucky, although I rather doubt it – would not lead me to believe these are highly skilled experts in their field. Quite the opposite, in fact.

There is some light, of course. The Migration Advisory Committee is keeping a close eye on such things, and you can’t have failed to notice the debates about immigration and work visas, although this is being coloured by some very powerful companies insisting – against all rational evidence – that they absolutely have to being in people because they can’t find anyone suitable over here already. Well, apart from the 17% of IT graduates and the several thousand people on the bench since their old job got rolled offshore that is.

So as I said originally, the bottom of the career ladder is being pulled up. Which means in about another five years, we won’t have an IT industry and we can all stop worrying about it.

Just for once, I rather hope I’m wrong…

Alan Watts can found at LinkedIn.
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Who else wants to be a contractor accountant?

Ambition, the international finance and accounting recruiter, believes that contractor accountants and finance staff working in the public sector will be badly hit by cuts in public spending.

There are currently around 140,000 permanent employees, freelancers and contractors in the public sector and Ambition predicts that around 11.5% will lose their jobs and many of those will be unable to find work in the private sector.

In total, it is thought that as many as three quarters of a million jobs will be lost in the coalition’s bid to reduce public spending by £6.2bn this year.

The MD of Ambition in the UK, Tim Gilbert, pointed out that the majority of public sector finance professionals do not have the cut and thrust attitude required by the banks and City financial institutions. Those candidates with commercial acumen will be quickly snapped up but many will fall by the wayside.

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Recession inspires increase in contractors

The recession has inspired more of us to become self-employed according to Kensington Mortgages.

They recently published a study that found that just under 25% of the self-employed have been so for under 2 years. This equates to 1.2 million people changing their employment status since March 2008. And half of them became self-employed within the last year. The report also shows that the UK now has 5 million freelancers, contractors and temporary workers.

But unnecessary taxes and a lack of available bank support is hampering opportunities.

Rhiannon Davis from Shelter Offshore believes that businesses could get more support if they moved abroad. She said that UK law is restrictive and taxation excessive citing Class 4 National Insurance Contributions as an example. Effectively, they are a tax on tax, she said.

It seems some of us agree with her as 24% of the self-employed are thinking of setting up abroad according to a recent survey by foreign Direct Currency.

The outcome of the General election is still unsure but should the Conservatives form the next government, contracting may become even more attractive. The PCG expects the Tories to review IR35 which has been seen as a major factor in putting people off becoming freelancers.

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