As the UK economy continues to emerge from the severe test posed by the coronavirus pandemic, many of Eton Bridge Partners’ clients are adjusting to the new era of hybrid working.
Now that many restrictions have been lifted by the government, and children are back in schools, the majority of our clients have returned to their offices – if only for two or three days a week.
Some, particularly businesses under American ownership, are being a little more cautious and waiting until January to invite their colleagues back to the workplace. But the majority of clients who are embracing hybrid working report that it is working well.
Employees do enjoy the positives of being in the room with their colleagues. It is easier to collaborate and engage when you are together. However, having the option to forgo the daily commute also brings its own benefits, and hybrid working delivers the best of both worlds to people at all levels of an organisation.
Clearly, there are some industries and professions where you simply have to be physically in attendance. But I have not come across any clients in the financial space who have insisted on their employees being in the office five days a week.
My strong sense is that hybrid working is here to stay. There are clear benefits to such a flexible approach and many of our clients are altering their practices – and their workspaces – accordingly.
Clients casting their net wider in search for the right talent
Before the pandemic, the conventional wisdom was that candidates for a role should live within an hour’s travel of the workspace in question. However, in an era of hybrid working, the prospect of a longer commute once or twice a week – rather than every day – is palatable.
The result is that many of our clients are happy to consider candidates based further afield who could feasibly travel up to the office and spend a couple of days there, staying in a hotel during their visit.
Some candidates are open to this and are undaunted by the prospect of a three-hour journey to and from London a couple of times a week. However, there are other considerations that complicate the decision.
One potential hire for such a position recently withdrew at a late stage in the process because he did not want to give up the extra time he had been able to spend with his children during lockdown.
I also heard anecdotally of a senior person who recently resumed a pattern where he spends alternate weeks at home and at work in Europe. Having spent so much time at home in the last year or so, being away from his family for a week at a time no longer felt right.
This is very much a personal choice and there is no right or wrong answer. But for clients and candidates who are open to a greater distance between home and work, there is an increased flexibility of location to be explored.
How should the rising number of job vacancies be filled?
The number of job vacancies in the UK continues to rise, and recently topped one million for the first time. We have seen this particularly in the tech space but also in areas across the working landscape, including HGV drivers.
Certain media outlets may simply advise people to get out there and take up a job, but if you have lost your work in a supermarket that has closed, for instance, it takes time to retrain and qualify to become a coder, a programmer or a driver.
How should organisations plug those gaps? Should they recruit locally, import the talent or hire somebody based in another country to do the job remotely? Perhaps employers in the UK should be lobbying the government to impress upon ministers the need for the relevant skills, and the requirement to incentivise people to move here.
This may be politically challenging post-Brexit, but the government has spoken in the past of the desirability of a points-based immigration like that used in Australia. That would allow people with skillsets particularly in demand in the UK to move here easily.
The fact that there are so many vacancies available has helped to ensure that Eton Bridge Partners remains as busy as ever, and the CFO market remains very buoyant. We also continue to carry out a significant amount of international work.
It is notable that candidates are now asking questions that were not on their list two years ago. People are still interested to know about subjects such as their prospects for career progression, but they are also keen to learn how supportive the company in question was during the pandemic, how well it communicated with its people, its views on hybrid working and its ESG approach generally.
Inflation could be with us for the next 12 months or more
After going through a suppressed economy for 18 months, the market is now seeing a strong demand for goods, services and labour. I feel the economy is desperate to grow, and the fact that so many of us are now vaccinated and are becoming used to living with Covid-19 is putting pressure on the product supply chain and the cost of goods.
Inflation is rising and will probably be present for some time – perhaps until the end of 2022, when that post-pandemic spike in demand has been satisfied. However, it is worth pointing out that, while we have lived through an era when inflation has been below five per cent since 1993, before that there were times during the 1970s and 1980s when it was up to and even over 20 per cent.
In that context, the inflation we are expecting is still low, and an inevitable consequence of the process of emerging from a suppressed economy.
We have, though, seen already what can happen when prices rise suddenly. The fact that companies in the energy sector have gone bust recently as a result of gas price increases seemed to take a lot of people unawares. It is not often you see a market change that quickly.
Tax rises are inevitable to recoup major spending on economy
When you spend a lot of money and take on a lot of debt, you have to pay it back. For instance, if you move house and take on a massive mortgage, you need to get a better job or to spend less. There are no two ways around it.
After pumping enormous amounts of money into the economy in the last 18 months, it is inevitable that the government will want to claw that back.
Most people I have spoken to have accepted that we will be paying more tax for the next 10-15 years because the nation’s debt-to-GDP ratio is virtually 100 per cent, the highest since the early 1960s – and we now owe just over two trillion pounds. With the Prime Minister not keen on austerity, he will have to increase tax receipts.
It was a shame that we have not been able to do a new trade deal with the United States. We can only hope that behind the scenes, negotiations will take place and get what we need to put us back on a sound footing.
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