News from the UK and around the world

The latest UK Business Confidence Monitor indicates that the economic decline may have reached the bottom, with business professionals feeling more optimistic after two years of successive declines in confidence. The findings, published by the The Institute of Chartered Accountants in England and Wales (ICAEW) reveals a rise in confidence from -45.3 to -28.2.The latest findings from the quarterly BCM show that the Index now stands at -28.2, an increase of over 17 points from Q1 2009 but still a long way from +4.8 measured in Q3 2007, the last time the index was positive. Across the sectors, the Banking, Finance & Insurance sector is the most confident at -16.0 compared to -46.0 at the beginning of the year. The Property sector is second most confident (-20.0) and Retail & Wholesale continues to hold up well (-21.8) despite initial fears for their prospects on the High Street. The Hotel & Catering sector remains the most negative sector with the lowest confidence rating of -48.7 as the affect of the cut in consumer spending on luxuries is felt. There are also signs that the decline in the Manufacturing & Engineering sector may be easing with an increase in confidence of 13.5 points.

SC Johnson has announced that it is initiating a partnership with a U.S. Agency for International Development-funded project to benefit thousands of Rwanda pyrethrum farmers by helping them enhance the collection, drying and transportation of higher-quality pyrethrum flowers. The 28-month long project endeavors to enable farmers to increase their families' income through enhanced production, as well as result in an increased supply of sustainable East African pyrethrum for key purchasers like SC Johnson. Pyrethrum is a natural insecticide extracted from the dried flower heads of chrysanthemums. Pyrethrins are fast acting and work as highly-effective insecticides. The partners in this project estimate that world demand for pyrethrum is approximately twice as high as current supply. Enhancing the sustainability of Rwanda's pyrethrum industry is important to SC Johnson. The fertile volcanic soil, cool night temperatures and ample rainfall, along with the large number of small-holder farmers make Rwanda ideal for pyrethrum production. The company has purchased pyrethrum from East Africa for more than 40 years.

According to the Committee Encouraging Corporate Philanthropy (CECP) annual philanthropy survey of nearly 140 leading companies, 53% of companies increased their total philanthropic donations in 2008, and 27% increased their giving by more than 10% year-over-year. Amid a challenging economy, business leaders continue to support their companies' commitments to rebuilding their communities and advancing social and environmental programs around the world, further evidenced today as CECP presents the Excellence Awards in Corporate Philanthropy to two companies and one nonprofit. CECP’s corporate philanthropy data also indicate that while nearly 70% of respondents experienced a decline or loss in corporate profits from 2007 to 2008, the inflation-adjusted median giving per company remained high at $30.78 million, drifting down 7.8% from a peak of $33.19 million in 2007. The greatest surge was seen in non-cash giving – which rose by nearly 35% among companies whose giving increased. Giving from corporate foundations remained flat. To access a detailed Executive Report of these findings, visit 'Benchmarking' at  CorporatePhilanthropy.org.

The Chartered Institute of Personnel and Development (CIPD) has welcomed the news that previous plans for extending paternity leave will now be subject to a government review, prompted by the recession. The flagship policy would have enabled parents to share leave when caring for their newborn babies, but it is now being reconsidered given the added pressures the recession has placed on business. A spokeswoman for the Department for Business Enterprise and Regulatory Reform said a possible date for the changes has not been confirmed. The CIPD cited the "bureaucratic burdens" involved in allowing mothers and fathers, who in most cases work in different companies, to share parental leave. The organisation is urging politicians and business leaders to come up with workable proposals that balance competing demands in a way that works for business.

A quarter of HR and recruitment specialists have had their pay cut in response to the recession, according to new research out today. The survey by the Keep Britain Working Campaign found that 24 per cent of HR workers have taken a pay cut and 17 per cent are working reduced hours. Over a quarter (27 per cent) had lost some kind of benefits over the past nine months. Across all professions over half (54 per cent) had experienced a cut in pay, a reduction in hours or a loss of benefits since the recession began, the survey of the 1,600 UK workers found. Two in five workers (40 per cent) had been given extra responsibilities while one in five (20 per cent) had experienced a role change within their organisation. Unemployment in the UK is currently at 7.1 per cent, with 2.22 million people out of work. Source: PM Online

New research shows that 19% of UK SMEs have not recorded a profit since the second quarter of 2008, and unsurprisingly 55% have not been profitable at all in 2009. The survey, conducted by Continental Research, showed that a significant 10% of SMEs had not recorded a profit since the last quarter of 2007 or earlier. SMEs with a turnover between £50k and £1m were the worst hit, with 20% not recording a profit for the past year. This compares with 7% of businesses with a turnover over £1m. When businesses that had not been in profit since 2008 or earlier were asked to predict when they would be profitable again, 32% thought they would have to wait until at least the first quarter of 2010, with 10% not expecting an upturn until 2011 or later. 57% of these were more optimistic, expecting to return to profitability by the last quarter of 2009 or earlier. Once more, companies with bigger turnovers are more optimistic: 38% of larger businesses expecting to be profitable in the current quarter, compared to 31% of SMEs. When polled about the general economic recovery, 32% of respondents thought it would be more than a year before things begin to improve – the third quarter 2010 or later, although 24% say it will be spring next year.

A leading business investment agency has launched a free guide to enable small companies to secure funding in a difficult economic environment. As the recession hits, small businesses are finding credit hard to come by and in many cases banks are withdrawing established lines of credit. Worse still, debt finance, which was once an attractive option, is set to become an expensive burden. Many small businesses are lacking the working capital required to grow and are now in need of alternative forms of funding. In response to this challenge, Beer & Partners, a leading business investment agency, recently launched a new guide to help small companies secure funding and capitalise on the shifting balance of investment opportunities. While business investment offers high rewards for entrepreneurs, securing funding is dependent on a number of key factors. First is to be realistic and specific about the level of funding required and ensuring this is sufficient to see the business through its entire next stage of growth. Sensible evaluations, coherent business plans and strong management teams are also crucial, spelling the difference between success and failure. A free copy of the Guide can be downloaded  here.

Councils, charities and social enterprises are being asked to get involved in a major new initiative that is aiming to create 150,000 new jobs for young people and the long-term unemployed. Organisations have been asked to register an interest in taking part in the Government’s £1 billion Future Jobs Fund. The UK-wide scheme, which was unveiled during the Chancellor’s Budget speech, aims to guarantee a new job, training or paid work experience opportunity for every 18 to 24-year-old who is approaching 12 months unemployment. According to the Government, national sports organisations have already pledged to provide at least 5,000 new jobs and called on other sectors to get involved. For further information about the scheme and to download an expression of interest form, visit the dedicated Future Jobs Fund website.

Plans are in the pipeline for a new £10 million fund for social enterprises. Big Issue Invest, the investment arm of Big Issue, is set to offer risk capital ranging from £50,000 to £500,000 to organisations that demonstrate growth potential and the ability to have a "significant social impact". Cash injections from their Social Enterprise Investment Fund will be used as working capital, for capital purchases, and for acquisitions of other businesses which will see them turned into a social enterprise model. The fund is aiming to act as "a vehicle to grow social enterprises that create greater social opportunity and environmental sustainability in the UK while demonstrating the viability of social investing to the wider investment community". Although it will mainly focus on helping existing enterprises to grow and succeed, funding may also be offered to early-stage businesses that have a strong business model and management. Big Issue Invest already provides a loan fund for UK-based third sector organisations. Charities, community development finance institutions, and social enterprises can apply for loan finance ranging from £50,000 to £250,000. This fund focuses its investments in organisations that are based in deprived areas and work to improve the quality of life for disadvantaged local residents.

The Migration Advisory Committee (MAC) has recommended that 270,000 fewer posts should be included on its list of occupational shortages, determining which skilled workers employers can automatically bring in from overseas. The number of jobs open to skilled migrants from outside the EU should be cut by a third because of rising unemployment in Britain, according to the government's immigration advisory board. Construction managers, quantity surveyors, and social workers who deal with adults have been taken off the list, while restrictions on other care workers and chefs have been tightened. The recommendations follow the committee's first partial review of the list, which came into force last November and some of the jobs previously included on the list had since been filled by British workers who had been reluctant to take them before the recession. However, medical consultants with long training periods and high integrity pipe welders are still needed from overseas while orchestral musicians, computer animation technicians and contemporary dancers should be added to the list to help the UK retain its position "at the peak of global culture". Separate reviews on other aspects of the new points based system will look at tightening up intra-company transfers and rules on post-study worker. The Committee urged employers that had applied for sponsorship licences to bring in workers from overseas to have "a two-track" approach to immigration and training home-grown staff.

Allen & Overy's leading position in the pensions market has been confirmed with the accolade of Law Firm of the Year by Global Pensions for the second consecutive year. The firm was shortlisted by pension funds and judged by a wide selection of pension and investment experts from around the world. Allen & Overy's global pensions team, part of the Employment and Benefits practice, comprises over 50 lawyers with pensions expertise across its network of international offices. Over the course of 2008, the group advised HBOS on the pensions aspects of the HBOS-Lloyds merger, worked on various building societies rescues and mergers, and a number of the high profile buy-ins and buy-outs of scheme liabilities, including acting for Goldman Sachs and Cable and Wireless, as well as the usual pensions advisory and dispute resolution work for a variety of clients.

KPMG has been awarded a Gold Standard in the Business in the Community/Opportunity Now Benchmarking Survey 2008-2009. The Opportunity Now Benchmarking Survey is the UK's most extensive survey of gender equality, diversity and inclusion in the workplace. This year 77 employers took part in the benchmark. It has been developed as a management tool to help employers in improving their performance, whilst providing a systematic approach to managing, measuring and reporting organisational action in this area. The Gold Standard indicates an excellent approach to gender equality diversity and inclusion. We scored particularly highly in comparison to others in the categories relating to commitment and engagement, integration and performance improvement. An area for further development is monitoring and measurement in relation to diversity.

More jobseekers are applying to and staying in the armed forces, according to the Ministry of Defence. The latest recruitment figures show a 7.1 per cent (1,440 people) rise in applicants in 2008, compared with in 2007. At the end of 2008 the number of people joining the armed forces for initial training was at its highest since the 12 months to 31 March 2004. The economy may be a factor, but British Army London recruiting Commander Lieutenant Colonel Paul Meldon believes the recession is not solely responsible. Meldon said a re-focus of the army's recruitment campaign and changing public attitudes towards the forces has driven up the headcount. Recruitment targeting has also changed, Meldon explained: "We thought we had four markets - officers, soldiers, regulars and territorial. But they all join the same organisation and the challenges are the same." All groups are now targeted with the same campaign, called "Start thinking soldier". Meldon also explained rising retention rates: "People who are planning to come out of the army have nothing to go to. The recession has kept people in." But he added that the recruitment process increasingly looks for "stickable" recruits who will stay. Public perception has also softened. "In the early part of last year 56 per cent of parents actively discouraged their children from joining the army, but three months ago it was 42 per cent. People are more supportive now we are coming out of Iraq," Meldon said. MoD figures show that the British army is close to full strength (97.2 per cent) for the first time since the early 19th century. Source: PM Online

The number of accidents and injuries at work has fallen over the past two years, according to the Health and Safety Executive. The number of significant injuries at work (resulting in three days or more absence) fell 10% in two years, while major injuries declined 5%.

More people living in Britain see themselves as British first and foremost – whatever their background. Even those who come to the UK from abroad often take on ‘British’ as their key allegiance, a survey found. Almost one third of those questioned in the survey described British as their ‘primary identify’. 32% of British citizens agreed, as did 28% of those from ethnic minorities. Another 23% of all Britons and 13% of ethnic minorities favoured the individual British country they lived in. Almost one in four ethnic-minority Britons born abroad said they were 'first and foremost' British.

Family life is breaking down because middle-class parents put work before their children, according to a UK Government study. Half of parents feel they do not spend enough quality time with their children due to the pressure of long working hours, it found. Parents who are 'cash rich' but 'time poor' spent less family time at home than those on lower incomes. Many are often unable to help with children with homework and instead try to compensate by splashing out on expensive family days out at weekends. Only 44% of parents earning more than £45,000 a year spent time at home with their family at least four times a week whereas 60% of lower earners, on less than £10,000, enjoyed regular family time at work. Children in 'strained' families were far more likely to take extreme risks, such as trying drugs, getting into fights and binge drinking.

British children will have travelled nearly 40,000 miles before the age of 16. Today's generation will, by their mid-teens, have travelled one and a half times around the globe, double that of the previous generation of teenagers. A British child today will visit an average of 14 countries y the age of 116, more than double the number seen by their parents by that age. Fewer than 1% have never left Britain, compared with 110% of their parents at that age. 92% of parents say the importance of letting their children see a range of cultures has prompted travel, while 60% cited travel as helping their child learn a foreign language. According to the research conducted by Hotels.com, cheaper air travel has helped 18% of children see Asia before their 16th birthday, while 16% have been to Africa. 13% have visited Australia and 9% South America.

Xerox Corp. President Ursula Burns will become the first Black woman to head a Fortune 500 company, replacing Anne Mulcahy as chief executive officer, effective July 1, according to a statement by the company. Burns, who has been with Xerox, since 1980, started with the firm as a summer intern focusing on mechanical engineering. She was named president of the company in 2007 and has been instrumental in helping to revive the company's financial health after shares plummeted 80 percent in 2000. Burns' promotion to CEO will make her the first Black woman to head a Fortune 500 company. She will also join the list of four other Black CEOs and 15 other women CEOs of a Fortune 500 company.

Bloomberg reports that, according to a new report issued by US compensation consultants Johnson Associates, 2009 investment banking bonuses are likely to increase by as much as 25% on last year. Bonuses paid to employees working in the asset management industry are thought likely to see further declines this year, however, possibly by as much as 35%.

Results from the latest CBI Service Sector Survey released today will give hope to the optimists that this crucial sector of the UK economy could be through the worst. The survey confirms that the UK's service sector is still in deep recession, but there are also some signs that sentiment is improving and indications that the decline in business activity is starting to slow. However, on the downside, the lack of availability of credit continues to be a serious issue for many firms in the service sector. Failure to access credit is limiting the ability of firms to increase business over the next year and forcing them to curtail their investment plans. This could slow down the recovery when it does come.

New research shows that business angels stand to make a significant profit by investing in start-up companies, with an average rate of return of 22% over four years. The research, published this week by NESTA (National Endowment for Science, Technology and the Arts) in collaboration with the BBAA (British Business Angels Association), reports for the first time that Business Angels stand to make a substantial profit from investing in start-ups, with an average Internal Rate of Return (IRR) of 22 per cent over four years, compared with 27 per cent IRR in the US. Business Angels - investors who put personal money directly into young unquoted companies - are a significant source of early stage finance. But despite their increasing importance, little is known about their outcomes and returns in the UK. The report reviewed 1,080 investments. More than half were directed at very early stage, pre-revenue start-ups - the riskiest time of a company's life. This was reflected in the investment returns. Despite the fact that the majority of investments make a loss (56 per cent in this study), a substantial number (44 per cent in this study) lead to positive returns with 9 per cent generating more than 10 times the capital invested. The report also suggests a number of strategic choices and practices that may lead to better investments outcomes such as investing in one's area of expertise, performing at least 20 hours of due diligence before investing and staying connected with the business, preferably at a board level. The report says that on average Business Angels in the UK invest £42,000 and each investor makes around 6 investments. Investors typically reviewed 20 opportunities each and acquired 8 per cent of a company. Co-investments are seen as the preference for investing in start-ups with on average 5 investors co-investing in any one round. The figures generated by this study were comparable to the performance of the US Angel market relative to the size of the Angel community.

UK organisations need to offer adequate training programmes to develop the next generation of business leaders, or risk the future success of their business. According to the Chartered Management Institute (CMI), 46% of employers are not providing adequate training and career opportunities at their organisation. The CMI are concerned that this could lead to a future where businesses lack the adequate leadership experience required. The CMI has released the results of a number of pieces of research that were conducted during the past nine months. This research draws on the opinions of approximately 4,000 respondents. Over three quarters (82%) of respondents believe that their employer should focus on skills development as a route out of the recession. When asked why, just over a third (34%) of respondents answered that poor management skills will have a negative effect on future business performance, whereas more than half (52%) feel that costs and revenues will be in danger due to loss of skills. Worryingly, over a third (38%) of managers predict a drop in their organisations' management development over the next six months, and almost half (44%) have noticed a drop in the development of core staff at their firm.

Training is the key to retaining graduates, according to survey from TMP Worldwide and TARGETjobs. The survey shows that 43% of graduates who are in their first or second job say they would look to change jobs as soon as the economy recovers. Almost all respondents said that the amount of investment in their skills would affect their decision whether or not to move on, while 90% of graduates think that organisations that continue to invest in their people will emerge from the recession stronger. According to Neil Harrison, head of research and planning at TMP Worldwide, the message from graduates is really quite clear and that employers who fail to invest in training programmes risk losing the new recruits that they took significant time and effort to recruit and train. For now, he says, companies might be hanging on to graduate staff because there are limited opportunities for them to move on, but there is no doubt that these graduates will be off unless they can see that the company is developing their skills and therefore their career prospects.

Major British companies and institutions founded using the profits of slavery will be highlighted by a new study. An online database of all the slave owners in the country at the time of abolition in 1833 will be created to trace how their wealth was used. This will be the first in-depth study of how the owners were involved in events such as building the railways. UCL’s three year study is funded by the Economic and Social Research Council.