Charlotte Street Partners



A thawing labour market

Written by Li-Ann Chin, associate 
Edited by Adam Shaw, associate partner
1 June 2021

Good morning,

“Where have all the workers gone?”
That’s the question employers have been asking, as they scramble to fill positions previously laid off – a symptom of the UK labour market bouncing back and the economy gradually reopening.
The hospitality sector is said to be struggling with “severe staff shortages”, while the British meat packaging industry is “desperate for workers”. Meanwhile, white-collar employees are back in demand as companies transition away from survival mode and relaunch projects to create future growth. In certain sectors such as construction and trades transport, logistics and warehousing, hiring has surged above pre-pandemic levels.
An obvious manifestation of this shift in the labour market is the assortment of incentives and bonuses being doled out to workers, which would have seemed preposterous a mere six months ago. E-commerce company Amazon is offering $1,500 sign on bonuses to attract delivery and warehouse workers, with an additional $100 for candidates already vaccinated against Covid-19. Restaurants in London are extending gift vouchers ranging from £100 to £2,000 to customers and current staff for every successful new hire they recommend.
But are monetary incentives sufficient to attract and retain new talent? A recent survey indicates that job security is now ranked as more important to workers than flexible working or salary. Another survey reveals that employees would sooner sacrifice some of their salary for benefits that revolve around personal development and wellbeing.
These findings ought not to come as a revelation to employers, and indeed, companies appear increasingly aware of the shift in how employees perceive work. Amazon’s job description goes to great lengths to highlight the healthcare benefits and career development opportunities that successful candidates receive.
“Many of our entry-level employees become leaders in operations, HR, and other areas. See where your Amazon journey can take you,” it boasts.
The message to employers is clear: job security and worker wellbeing are now more important than ever. For many businesses, there is work that needs to be done to improve their job security, flexibility and career structures, in addition to communicating them well to the candidates they want to hire.
For the first time in a decade, the labour market has experienced an unusual shift in the balance of power. It may be temporary but for as long as it lasts, employers have no choice but to adjust.


Professor Ravi Gupta from Cambridge University, a scientist advising the UK government, has warned that the UK is in the early stages of a third wave of Covid-19 infections, with the Indian variant fuelling “exponential growth”. He has called for the ending of Covid restrictions in England on 21 June to be delayed, which the government has not ruled out according to environment secretary George Eustice.
Diana Mickeviciene, Lithuanian ambassador to China, has rejected claims that her country is taking sides against Beijing by quitting the China-led 17+1 trans-regional cooperation initiative, stating the withdrawal was a result of less-than-expected trade benefits.
SNP MP Joanna Cherry announced her decision to step down from the party’s National Executive Committee party on Twitter yesterday, blaming issues over “transparency and scrutiny”. Her decision comes after fellow MP Douglas Chapman resigned as the SNP national treasurer on Saturday, which he said was due to not being given enough information to do the job.
Allegations have emerged that Denmark’s Defence Intelligence Service (FE) previously collaborated with the US National Security Agency (NSA) from 2012 to 2014 to gather information on top European politicians, including German chancellor Angela Merkel. The NSA is said to have accessed text messages and the phone conversations of a number of prominent individuals by tapping into Danish internet cables in cooperation with FE.

Business and economy

Nestlé, the world’s largest food and beverage company, has acknowledged in a presentation circulated among top executives this year that more than 60% of its mainstream food and drinks products do not meet a “recognised definition of health” and that “some of our categories and products will never be ‘healthy’ no matter how much we renovate”. Nestlé has stated that its currently working on a company-wide project to update its nutrition and health strategy, with plans to be unveiled later this year. (£)
A new report by the Organisation for Economic Cooperation and Development (OECD) has revised its March projection for the UK’s economic recovery up from 5.1% to 7.2%, despite debt being at nearly 100% of GDP. Chancellor Rishi Sunak has attributed the strength of the forecast to the UK’s success with its vaccine rollout and the government’s Plan for Jobs.
According to data from financial software and data provider Refinitiv, the fees that Wall Street banks earn from special purpose acquisition companies (Spacs) have plunged in the last two months, from almost $3bn in January and February to $450m in April and May. This has prompted concerns that the demand for initial public offerings and mergers between spacs and private companies has finally cooled.

Columns of note

At the start of 2021, the German government launched a novel system of carbon pricing – the National Emissions Trading Scheme – that enlists the help of consumers to meet the country’s emissions reduction targets. If successful, the carbon pricing model may soon be extended Europe-wide. Mehreen Khan argues in the Financial Times that this move might ultimately incur higher electricity bills for consumers, creating a major economic shock for the poorest households in Europe.

When Dominic Cummings, former chief adviser to the prime minister, appeared in front of the House of Commons last week, one cabinet minister in particular suffered the brunt of his scathing testimony: Matt Hancock. But what happens next? Will the health secretary now be asked to step down? Not likely, predicts Katy Balls in The Guardian.

Cartoon source: The New Yorker


The week ahead

Investors enjoyed a market holiday in both the US and the UK yesterday, as Americans observed Memorial Day and Britons celebrated the Spring bank holiday.
Government data released in India today reveals that gross domestic product (GDP) for the fourth quarter grew by 1.6%, despite farm sector gross value added (GVA) growth falling to 3.1%, compared to 6.8% last year.
Meanwhile, China’s factory activity slowed slightly in May as raw material costs expanded at their fastest rate in over a decade.
Manufacturing will likely be a key focus of this week, as key manufacturing reports are due to be published out of US, Europe, the UK and Canada, while the UK house price index (HPI) for May will also be revealed today.
UK, US, Germany, France and Italy’s services purchasing managers’ index (PMI) are due to be released on Thursday. Japan’s PMI index and household spending figures will be out on Wednesday.
Friday will see the UK’s construction PMI for May published as well as the US’s unemployment rate for May.
Amid apprehensions over inflation and continued uncertainty with regards to the second wave of Covid-19 infections, the Reserve Bank of India (RBI)’s monetary policy committee will meet on Friday. Interest rates are predicted to remain unchanged.

What’s happening today?




Gooch & Housego
Tekmar Group P.

Trading Announcements



Afarak Group
North American

UK Economic Announcements

(09:30) PMI Manufacturing

International Economic Announcements

(08:55) PMI Manufacturing (GER)
(08:55) Unemployment Rate (GER)
(09:00) PMI Manufacturing (EU)
(10:00) Unemployment Rate (EU)
(14:45) PMI Manufacturing (US)
(15:00) Construction Spending (US)
(20:30) Auto Sales (US)

Source: Financial Times

did you know

There is a hotel in Bolivia made entirely of salt blocks, aptly named the Palacio de Sal. Guests are forbidden from licking the walls. (Source: Dauntless Jaunter)

Parliamentary highlights

House of Commons

The House of Commons is in recess and will next sit on 7 June 2021.

House of Lords 

The House of Lords is in recess and will next sit on 7 June 2021.

Scottish parliament 

First Minister’s Statement: COVID-19 Update
Scottish Government Debate: Health Recovery

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