Jobs, jobs, jobs
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
In yesterday’s newsletter we said there is growing evidence that the jobs market is weakening. Recruitment companies have warned that demand for their services is dropping - in other words, fewer businesses are looking to hire new staff.
There is more evidence of that shift in the jobs market today. The Office of National Statistics has reported a drop in wage growth and job vacancies.
Average pay excluding bonuses was up by 6.6 per cent year-on-year in the UK during the three months to the end of November 2023, the ONS said. This is down from a rise of 7.2 per cent in the three months to the end of October and is the slowest rate of growth for nearly a year. Average pay including bonuses was up by 6.5 per cent.
The number of job vacancies fell by 49,000 between October and December to 934,000, the ONS said. This is the 18th month in a row that the ONS has reported a fall in vacancies, the longest run on record.
It is important to say that all these numbers are still strong compared to recent history. The number of job vacancies is still higher than it was pre-Covid and the unemployment rate in the UK has stayed at 4.2 per cent, the same level that the ONS reported last month.
You can see from these ONS graphs below how the numbers compare to previous years…
This is pay growth…
This is job vacancies…
And this is the unemployment rate…
Nonetheless, when you combine this data with the warnings from recruitment firms that demand for their services is dropping and also with announcements from large companies about job cuts (see Barclays, Reach and Citigroup for recent examples, more here), then the jobs market looks very different to a year ago when many businesses were struggling to find staff and skills.
You can find the ONS’s latest report here
Podcast…
The new episode of our Business Leader podcast went live this morning and it features an interview with Tom Beahon, the co-founder and chief executive of Castore, the sportswear brand. Tom and his brother Phil have built a UK company worth more than £950 million which is taking on global giants like Nike and Adidas in the sportswear market.
In the episode Tom Beahon speaks with remarkable openness and clarity about how he and his brother founded, built and scaled-up Castore. This includes the challenges they have faced along the way as the business has got bigger and bigger.
I don’t want to spoil the episode for you and I plan to write about it later in the week, but this is an episode you won’t want to miss. We broke one of our rules for this episode. We like to keep episodes of Business Leader to less than 40 minutes long but this comes in at 59 minutes. Hopefully you will all agree that the insight you get from this episode means the extra time is worth it.
You can listen via Substack here, Apple here and Spotify here
Other stories that matter…
1. Dyson has named a former Jaguar Land Rover and Aston Martin director as its new chief executive. Hanno Kirner had been leading JLR’s work on battery technologies. Sir James Dyson, the founder of Dyson, said that Kirner will bring “a wealth of experience across multiple industries” to the company. You can read more in a Financial Times story here
2. The biggest operator of nightclubs in the UK, Rekom, is planning to call in administrators and restructure the business. Rekom runs 35 clubs and 12 bars around the UK, with its brands including Atik and Przym. However, its nightclubs have suffered from a drop in midweek trading and a rise in competition from new venues offering leisure alongside food and drink. You can read more in a BBC story here
3. The boss of Barclays, CS Venkatakrishnan, has said the UK should create an independent economic development agency that sets an industrial strategy for the country and works to encourage investment from businesses. “Like the Bank of England or the Office for National Statistics, this agency should transcend changes in government and drive a common, national ambition for long-term UK growth,” he said. Venkatakrishnan made the comments in a letter to the FT which you can read in full here
4. The days of Google being the dominant way to search for information on the internet are over. That is the view of Satya Nadella, the chief executive of Microsoft, who has said that AI will “reset” the internet search market. While Nadella has a vested interest here, his comments are interesting and important nonetheless. You can read them in full via The Times here. Microsoft has just overtaken Apple to become the most valuable company in the US again, a title it first claimed in 1999. A cool graphic from Visual Capitalist shows how the holder of that title has changed over the last 30 years. You can find the graphic here
5. One of the biggest challenges for businesses looking to grow is how silos develop within an organisation, according to a new report by Harvard Business Review. This divide between departments hurts innovation, decision-making and efficiency, the report adds. The key to breaking down the silos is to ensure that the senior leaders at the top of each department are working together. You can read the report here
And finally…
Two Off to Lunch favourites won big at the Emmy awards last night. If you haven’t watched Succession or The Bear yet, then I highly recommend you do. Succession won six awards at the Emmys including best drama, lead actress in a drama, lead actor, supporting actor, best director and best writer. The Bear also won six awards - best comedy series, lead actor in a comedy, supporting actress, supporting actor, best director and best writer. You can find a list of all the winners and nominations via The Guardian here
For those who have watched Succession and The Bear, perhaps you should look at the tags on Netflix to find something to watch. According to a new analysis in The New York Times, these one-word tags induce Netflix users to press play and are key to the success of the streaming service. For example, Netflix describes Emily in Paris as “campy” and “quirky” and Our Planet II as “relaxing” and “captivating”. The New York Times writes that the tags |regularly help viewers choose a show from the service’s nearly endless library”. Could such prompts work to sell other products too? You can read the article here.
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Best
Graham