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Optimistic EBCs are planning for growth

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Optimistic EBCs are planning for growth
  • More than half of Employee Benefit Consultants are optimistic about the year ahead and two out of five plan to recruit
  • But concerns about rising benefit costs for employers are increasing

 Employee benefit consultants (EBCs) are increasingly optimisitic about business prospects for the year ahead with more than half expecting growth, new research[i] from MetLife UK shows.

Its half-yearly EBC Pulse survey shows that 52% of firms are optimistic for their business over the next 12 months, a slight increase on the 48% who were optimistic when the research was first conducted.  The number of firms planning to recruit and invest in technology and training is also increasing.

The nationwide survey of more than 200 EBCs found that nearly two out of five (39%) plan to recruit more staff in the year ahead while 57% will increase investment in technology and 54% will invest more in training for staff. Results for all three measures have ticked up from six months ago when 36% planned to increase recruitment while 55% expected to invest more in technology and 49% planned to boost training.

Growing optimism is translating into business growth with 45% of firms expecting increased profits and sales compared with 42% previously. Companies are however expecting modest growth with just 6% of those surveyed planning for significant growth compared with 2% six months ago.

There are however some storm clouds – around four out of five (80%) of EBCs say the rising cost of benefit provision for employers is a concern for the next two years. When MetLife first asked the question the number was 73% who said it was a worry over the next two years.

Worries about cost are increasing concerns about demonstrating the value for employers of providing benefits – 63% now say linking benefits to improved productivity is a concern compared with 58% the first time the questioned was asked.

The potential impact of Brexit remains a worry – 77% of EBCs questioned said it was a concern over the next two years but that is virtually unchanged from the 78% recorded six months ago.

Adrian Matthews, Employee Benefits Director, MetLife UK said: “The employee benefits market is proving resilient in the face of economic and political uncertainty with EBCs increasingly optimistic about their own businesses.

“More than half of EBCs are now confident about the year ahead and that is translating into increased recruitment and investment as well as business growth despite worries about the rising cost to employers of benefits.

“Our own research shows that employees increasingly value the benefits they receive through their employer (source: EBTS 2017) and that satisfaction with benefits is growing, highlighting the need for providers to help EBCs and employers in communicating the value of benefits to staff.

“Indeed, in uncertain times, employees are looking for ways in which they can protect themselves and their families from the impact of disruption to their incomes as well as looking to their employer to provide purpose and motivation.  Employee benefits, as part of a well thought-through employee value proposition, are invaluable in helping employees feel motivated and engaged.”

The EBC Pulse survey shows that EBCs believe that the industry will continue to see mergers and acquisitions in the year ahead – around 38% of firms said they planned to acquire other companies in the year ahead slightly down on the 42% who said they would buy firms the first time the question was asked.

MetLife is established as one of the UK’s largest Group Life providers by the number of schemes it insures[ii] and the sixth largest Group Income provider by premium. It has generated significant market momentum through its focus understanding customer needs and by employing staff focused on delivering customer excellence supported by strong partnerships.

[i]Independent research carried out by Pollright among a representative sample of 202 employee benefit consultants using an online methodology during March and April 2018

[ii]Swiss Re Group Watch 2017 Report

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Sunak to raise business tax to pay for COVID-19 support – The Sunday Times

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Sunak to raise business tax to pay for COVID-19 support - The Sunday Times 1

(Reuters) – British finance minister Rishi Sunak is set to increase a tax on business to pay for an extension to COVID-19 support schemes in the budget next month, The Sunday Times reported https://bit.ly/3ujaBcU.

Sunak, in his speech on March 3, will announce he is increasing corporation tax from 19 pence in the pound and will outline a pathway where it rises to 23 pence in the pound by the time of the next general election, the report said. The move will raise an expected 12 billion pounds ($16.8 billion) a year, the report added.

According to the report, at least 1 pence is set to be added to the bill for business from this autumn, at a cost to business of 3 billion pounds, with further rises in subsequent years.

Allies of Sunak clarified he would not increase corporation tax higher than 23%.

These measures will be helpful in paying for an extension to the furlough scheme, VAT cuts and business support loans until at least August.

Unlike the 2010 Conservative-led government, which pursued spending cuts to rebalance the economy after the global financial crisis, Sunak is expected to defer most of the toughest decisions about how to pay for that support in his budget speech.

“The corporation tax hike will be higher than expected and the extension of the support schemes will be longer than most people expect,” the newspaper quoted a source as saying.

Insiders indicated the stamp duty holiday on property purchases would also be extended in line with the other coronavirus support measures, the report said.

Britain’s economy had its biggest slump in 300 years in 2020, when it contracted by 10%, and will shrink by 4% in the first three months of 2021, the Bank of England predicts.

($1 = 0.7136 pounds)

 

(Reporting by Vishal Vivek in Bengaluru; Editing by Lincoln Feast.)

 

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Foxconn chairman says expects “limited impact” from chip shortage on clients

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Foxconn chairman says expects "limited impact" from chip shortage on clients 2

TAIPEI (Reuters) – The chairman of Apple Inc supplier Foxconn said on Saturday he expects his company and its clients will face only “limited impact” from a chip shortage that has rattled the global automotive and semiconductor industries.

“Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of the manufacturing conglomerate formally known as Hon Hai Precision Industry Co Ltd

“Therefore, the impact on these large customers is there, but limited,” he told reporters.

Liu said he expected the company to do well in the first half of 2021, “especially as the pandemic is easing and demand is still being sustained.”

The global spread of COVID-19 has increased demand for laptops, gaming consoles, and other electronics. This caused chip manufacturers to reallocate capacity away from the automotive sector, which was expecting a steep downturn.

Now, car manufacturers such as Volkswagen AG, General Motors Co and Ford Motor Co have cut output as chip capacity has shrunk.

Counterpoint Research says the shortage has extended to the smartphone sector, with application processors, display driver chips, and power management chips all facing a crunch.

However, the research firm predicts Apple will face a minimal impact, due to its large size and its suppliers’ tendency to prioritise it. Apple is Foxconn’s largest customer.

Foxconn is looking at other areas for growth, including in electric vehicles (EVs), and Liu said their EV development platform MIH now had 736 partner companies participating.

He expected it would have two or three models to show by the fourth quarter, though did not expect EVs to make an obvious contribution to company earnings until 2023.

Liu also said the company was still looking for semiconductor fab purchase opportunities in Southeast Asia after not winning a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra.

(Reporting by Ben Blanchard and Jeanny Kao; Writing by Josh Horwitz; Editing by William Mallard and Ana Nicolaci da Costa)

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EU seeks alliance with U.S. on climate change, tech rules

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EU seeks alliance with U.S. on climate change, tech rules 3

By Sabine Siebold and Kate Abnett

BERLIN (Reuters) – Europe and the United States should join forces in the fight against climate change and agree on a new framework for the digital market, limiting the power of big tech companies, European Union chief executive Ursula von der Leyen said.

“I am sure: A shared transatlantic commitment to a net-zero emissions pathway by 2050 would make climate neutrality a new global benchmark,” the president of the European Commission said in a speech at the virtual Munich Security Conference on Friday.

“Together, we could create a digital economy rulebook that is valid worldwide: a set of rules based on our values, human rights and pluralism, inclusion and the protection of privacy.”

The EU has pledged to cut its net greenhouse gas emissions to zero by 2050, while President Joe Biden has committed the United States to become a “net zero economy” by 2050.

Scientists say the world must reach net zero emissions by 2050 to limit global temperature increases to 1.5 degrees above pre-industrial times and avert the most catastrophic impacts of climate change.

The hope is that a transatlantic alliance could help persuade large emitters who have yet to commit to this timeline – including China, which is aiming for carbon neutrality by 2060, and India.

“The United States is our natural partner for global leadership on climate change,” von der Leyen said.

She called the Jan. 6 storming of the U.S. Capitol a turning point for the discussion on the impact social media has on democracies.

“Of course, imposing democratic limits on the uncontrolled power of big tech companies alone will not stop political violence,” von der Leyen said. “But it is an important step.”

She was referring to a draft set of rules unveiled in December which aims to rein in tech companies that control troves of data and online platforms relied on by thousands of companies and millions of Europeans for work and social interactions.

They show the European Commission’s frustration with its antitrust cases against the tech giants, notably Alphabet Inc’s Google, which critics say have not addressed the problem.

But they also risk inflaming tensions with Washington, already irked by Brussels’ attempts to tax U.S. tech firms more.

Von der Leyen said Facebook’s decision on a news blackout on Thursday in response to a forthcoming Australian law requiring it and Google to share revenue from news underscored the importance of a global approach to dealing with tech giants.

(Additional reporting by Foo Yun Chee; editing by Robin Emmott and Nick Macfie; editing by Jonathan Oatis)

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