A CEO’s take on the effect of the recession on UK restaurants
The Restaurant Group plc operates several hundred mid-market restaurants in the UK, trading under familiar names such as Frankie & Benny’s, Chiquito and Garfunkels. I came across a really useful piece of research evidence whilst looking through their Annual Report and Trading Statement for 2008 in which the CEO of the business outlines the potential effects of the UK recession on strategy - and how the recession is viewed as a net positive for the business!
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Government support for apprenticeships
Offering apprenticeships is one way that businesses can go about training new employees in practical skills. However they are also often criticised as simply a cheap way of hiring labour for a couple of years, with no guarantee of employment for the apprentice at the end of the training period. The government is trying to increase the number of apprenticeships on offer as one way of tackling youth unemployment and the skills gap that we have in the UK economy, by offering grants to small businesses who take on an apprentice. This video report looks at the history of apprenticeships, with some lovely footage from the sixties, and the benefits that the scheme could bring, along with the fact that there is still no guarantee of a full-time job at the end of it, and so could be useful for students of both unit 2, looking at recruitment and training, and unit 4 looking at the relationship between business and government.
Introducing business and the economic environment with Darling’s debt dilemma
I really like this cartoon version of the impossible task facing the Chancellor as he prepares his budget. How to solve the riddle of balancing out the need for spending with the need to raise revenue in order to repay the borrowing - which could be seen as a mega-version of how to cope with cash flow problems. This animated cartoon, which runs through the figures and the options, would be a good introduction to the issues and could start off a discussion about the impacts on businesses and their customers over the next few years. The BBC’s Recession Tracker gives up-to-date figures for all the key indicators of inflation, unemployment, gdp growth and so on, providing good back up, and the ‘UK Economy’ page has good coverage and comment on the latest developments.
Revision Quiz - Unemployment
This revision quiz tests business students on essential knowledge of unemployment:
Launch interactive quiz on Unemployment
Download SCORM-VLE download import file
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Breakfast for $1 tests price elasticity of demand
McDonalds is taking no chances on an economic recovery in 2010 - it is pushing ahead with an aggressive sales promotion offering popular breakfast items for just $1.
read more...»Q&A - How are businesses affected by unemployment?
Businesses are affected in a variety of ways depending on whether unemployment is high or low, and rising or falling.
read more...»Q&A - What are the main causes of unemployment?
The causes of unemployment can be described under four main categories:
- Seasonal unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment
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Q&A - What has happened to unemployment in the UK?
After a sustained period of falling unemployment and increasing employment, the recession in the UK has prompted a substantial increase in unemployment recently.
read more...»Q&A - Explain what unemployment is and how it is measured
Unemployment arises when the supply of those making themselves available for work is greater than the demand for workers. Unemployment is, therefore, the excess supply of labour in the labour market.
read more...»The lights go out for the nightclub market
Its bad news for shareholders of Luminar - but this news story is packed with rich potential for a business studies lesson…
read more...»Picking from a growing pool of job hunters
Despite evidence that the worst of the current global recession may be behind us, unemployment will continue to ratchet up for some time to come. It remains a lagging indicator of the economic cycle. The economic and social costs of mass unemployment are impossible to deny although hard to measure accurately. For some employers looking to recruit new workers, the growing pool of unemployed workers does provide - on the surface - an opportunity to hire well-skilled and motivated people often desperate for a fresh chance in work. Chris Tighe focused on employers in the North East in this revealing article in the Financial Times.
“More than 9,000 people in the North East are seeking work as sales assistants, it said, but only 191 such jobs have been advertised. Morrisons, the supermarket operator, has just reported an “amazing response” at its new Wallsend store in north Tyneside: more than 900 people applied for 35 posts............At Manchester Airport, where an advertisement posted online for just two weeks in February for four places on its graduate training scheme produced almost 2,000 applications.”
The high and rising ratio of applicants to unfilled vacancies should give businesses the scope to find the right people and perhaps unearth some gems who might rise through the business in the years to come. But although the pool of workers is high, businesses must also face the challenge and considerable cost of screening each application. Few smaller businesses have the luxury of being able to employ human resources personnel. Hiring recruitment companies can be expensive. Often the best new employees fall into your lap because of their vigorous approach to job hunting and an ability to keep their nose to the ground to spot what might be the right job for them.
Q&A - Outline the main costs and benefits of inflation
Inflation has many important costs and consequences for both society and business. However a stable and low level of inflation also provides some upsides for business.
read more...»A stunning example of how wage costs can differ for the same job
A very interesting and potentially explosive article in The Times today highlights the problems faced by British Airways as it seeks to reduce its operating costs…
read more...»Q&A - What is a sales forecast?
A sales forecast is an attempt by management to estimate the likely revenues of a product, business unit or market over a future period.
read more...»Q&A - How do changes in commodity prices affect businesses?
A change in commodity prices has too main possible effects on a business:
(1) An effect on sales revenue
(2) A change in raw material and other operating costs
Q&A - What are the main legal areas that a start-up business needs to consider?
A start-up soon finds that it needs to consider a variety of legal issues, both before and after it has started to trade. The key legal areas it must cover include:
read more...»Q&A - Explain “time-rate” pay
Time rates are used when employees are paid for the amount of time they spend at work. This is the most common method of payment in the UK.
read more...»Q&A - What factors should a business consider when deciding what to pay employees?
With so many methods of pay available, how should a business decide to structure the pay package it offers to employees, and what rate of pay should it use?
read more...»Q&A - Why do businesses employ temporary workers?
Whether hired on fixed-term contracts or not, temporary employees are particularly useful if the business has seasonal peaks and troughs in workload. Temporary workers also enable a business to fill short-term gaps, for example caused by illness or maternity leave.
read more...»Q&A - Explain the main issues with part-time employees
Approximately 25% of employees in the UK are employed part-time. That means that they work “less than full-time”. Not a very helpful definition! What that means is that part-time employment is the term used to describe various methods of employing people who don’t work a full working week.
read more...»Q&A - What are full-time employees?
In the UK, there are about 30 million employees working in businesses, of which around three-quarters are in full-time employment. Full-time is generally taken to mean an employee working 30 hours or more each week. However, it is not the hours that really matter; it is the fact that a full-time employee is fully committed to working for a business in return for the employment rights contained in the contract of employment.
read more...»More flak for the banks from business customers - what have they done with bail-out cash?
In File on 4 this week, there is more criticism of the banks. The programme investigates the ‘lending squeeze’, meaning that banks who have received huge amounts of bail-out cash from the government are not handing it on as loans to help small businesses. This was intended to be a condition of the help that the government extended to the banks, in order to help keep the wheels of the economy moving. Small businesses often need cash to help them through periods when they forecast negative cash flow – there is a clear pattern that businesses are finding it ever tougher to borrow, even if they are well established and have a good record and working relationship with their bank.
read more...»Flexible employment at Mini - the upside and the downside
This morning’s bad news for jobs comes from the Mini car plant in Oxford, where 850 workers have been laid off as the weekend shift is cancelled with immediate effect. There has been a fall of news orders of 30% during January following an even larger fall in December, and in order to cut capacity the BMW group is cutting production from three shifts to only two, and on five days a week instead of seven. The carmaker also said it had identified 150 surplus workers at its panel production plant in Swindon. Those workers will be offered a transfer to work in Oxford, it added. There is not statement included about their engine plant near Birmingham. But as the Swindon plant uses components on a sophisticated just-in-time system from a good number of local suppliers, there is bound to be a knock-on effect on those employers around Oxford too.
read more...»AIG ends Manchester United sponsorship deal
What are your personal experiences of the credit crunch? For a while, most of us have remained unaffected and watched the stories unfolding without much of a sense of involvement.
That’s all beginning to change now. You don’t have to be selling a house or running a business to notice how things are getting tough. I hope you aren’t affected by unemployment yet or live in a place where the High Street is sprouting lots of empty shop units.
read more...»Highest Productivity in the Industry - But Still Crippled by the Crunch
The factory has the highest productivity rates in the European car industry. But not even Nissan’s flagship factory at Sunderland has been unscathed by the dramatic fall in new car orders…
read more...»Bracing ourselves for a series of retail business failures?
A bold (perhaps reckless) prediction in the Sunday Times today. “Up to 15 national retail chains are predicted to go bust before the middle of January 2009"…
read more...»Business cutbacks and job losses
The British economy is in falling into a recession and this brings about a fall in the demand for labour and a rise in unemployment.
In many of the examples I have shown below, the root cause of the labour shedding is a decline in demand in a related industry – for example a cement factory that is finally shutting down because of the severity of the slump in new house-building. Or the employees at a local newspaper in Guernsey in the Channel Island affected by the steep drop in demand for traditional forms of media advertising. Markets are inter-related and there are few businesses in the UK at the present time that can describe themselves as ‘recession proof’.
read more...»Flexible working - evidence of a significant change in the UK workforce
News from the CBI of the substantial structural changes in the way we work in the UK…
read more...»Government support for small business - cutting red tape
The fourth in Andrew Stone’s series of Sunday Times articles on starting a business focuses on the challenges entrepreneurs face in dealing with legislation…
read more...»Wanna job? Get down to McDonalds
Two contrasting stories about the employment market recently illustrate really well how different businesses are coping in the economic downturn…
read more...»Cash is king for small businesses in the downturn
An interesting piece in The Telegraph suggests that small businesses are looking to maximise their cash balances as a key part of surviving the economic downturn…
read more...»Who should a start-up employ? Simple - the kids
Child labour. That’s the answer to some (not all) employment challenges facing a small business. A mailing campaign to put into envelopes? Need help with the photocopying or filing? Fancy a cup of tea brought up to the back-bedroom office. Then it makes sense to ask the kids to get involved, and grab a significant tax break at the same time…
read more...»Porkie Pies Don’t Cut It in the Real Job Market
A few white lies about his educational history didn’t prevent Lee McQueen from being named The Apprentice. However, the latest annual employment survey from the CIPD suggests “Sir Allun” may have let his protege off lightly…
read more...»Tesco creates waves in seaside holiday town
A fascinating business story buried in the home news section of the Independent today. Supermarket giant Tesco has bought the Lyme Bay Holiday Village, only to immediately close it.
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