The profitability gap between the smallest and largest firms continues to grow. For sole practitioners, profits have fallen by 40% to an average of £41,000 in 2017 and nearly 60% lower compared to the levels of profit achieved in 2015. This downward trend is further evidence on the struggle smaller firms face in a marketplace dominated by larger firms. This is further compounded by significant falls in net profit percentage for these firms. The combination of lower levels of fees and increased salary costs of non-equity partner fee earners have led to net profit percentages falling to 12% for sole partner firms and 15% for those with 2 to 4 partners.

Level of profit per equity partner have also seen falls, with firms of 11 to 25 partners dropping 13% and the largest firms falling by 8%. These reductions were not as bad as those for smaller firms, which is in part due to the cultural change in the ownership of law firms, with fewer fee earners and partners moving into equity positions, which gives lower numbers of individual equity partners a bigger share of the profit pool, albeit one which has decreased in quantum.

The research revealed a marked change in the staffing structures of legal practices. There are fewer senior fee earners and increases in paralegal and support staff. The difficulty in recruiting experienced qualified fee earners has not only impacted on income levels but has resulted in the movement of more administrative duties to support staff and paralegals taking on more work from fee earners. This staffing shift is expected to continue and resulting increasing profit levels to follow in future years.

Equity partner numbers have seen a drop and this trend is expected to continue, with fewer high paid fee earners wanting to sacrifice employment security for exposure to the risks of equity and those that are already equity partners are able to access a greater share of the better returns.

In the latest survey, the level of lock up is showing a worrying continuation of an upward trend first identified last year. For most firms, average lock up jumped in 2017 from between 3 to 17 days. Only those firms with 11 to 25 partners saw a reduction from 160 days in 2016 to 133 in 2017, however, this is still higher than average lock up days recorded by these sized firms in 2014 and 2015. The rise in lock up days emphasises the pressure on firms having to fund staff costs and practice overheads against a backdrop of falling income and profitability.

Karen Hain, Head of the Professional Practices sector at MHA, said:

“2017 was a year of change for the legal sector and our research paints a challenging picture for many firms. A combination of factors, including fewer mergers and acquisitions, the impact of the fixed fee regime, increased competition from more cost effective and price-driven business models, succession planning issues and the inevitable political and economic uncertainty have created a shift in the operating environment for firms of all sizes. After three years of growth, the drops in income and profitability could lead to criticism that firms took their collective eye off the ball in 2017.

“The UK legal sector needs to adapt to a ‘new normal’ putting a direct emphasis on having a better understanding of profitability and margins on work undertaken and improved financial controls. Efficiency needs to be a key theme for 2018 and beyond. Firm’s that focus on ensuring the right level of work is carried out by appropriately experienced and costed staff will see improved profitable performance. In addition, firms need to ensure they have a full understanding of the value of their services they provide and increase their use of technology to maximise access to financial data, to ensure they are accurately pricing work with appropriate levels of profit built in.”

“Achieving profitable performance is also about maximising recoverability of fees. Firms should be adopting practical and more proactive fee billing and collection practices. This can include more active billing strategies with frequent billing rather than event-based on completion of work, agreeing advance billing with clients on complex or larger workload cases and maximising the fee generation opportunities by focusing on cross-selling of services to existing clients.”

If you would like a full copy of the 2018 report, would like to understand more about any of the issues raised or would like to discuss them with a member of the MHA Professional Practices team, please contact Hannah Farmborough or call on 0207 429 4147.

Solicitors Kara Price and Sarah Wales at transatlantic law firm Womble Bond Dickinson discuss a worrying trend – male site workers in the construction industry are three times more likely to commit suicide – something the industry needs to urgently tackle.

What’s the problem?

Male site workers in construction are three times more likely to commit suicide than the average UK male. This shocking mental health statistic is a vivid reminder of the difficulties faced by many working in the construction industry every day. Troubling data from the Office of National Statistics found that between 2011 and 2015, of the 13,232 in-work suicides recorded, those within the skilled construction and building trades made up 13.2 per cent – despite construction accounting for little over 7 per cent of the UK workforce.

Why construction?

The construction industry lifestyle is undoubtedly both challenging and stressful. Long and demanding  working hours, working away from home on site for weeks at a time and the lingering unease in the industry, particularly following Carillion’s recent collapse, are just some of the factors contributing to poor mental health. In a workforce that is predominantly male, specific risks associated with male mental health also need to be considered. The “tough guy” image widespread in the construction industry is very much to blame. Asking for help and opening up about emotions are just not things that come naturally to many of those working in the industry. The combination of these factors results  in many suffering in silence.

Know the signs

Whilst poor mental health can manifest itself differently from individual to individual, the Construction Financial Management Association has set out some useful signs to look out for that can indicate poorly managed or untreated mental health conditions:

• increased lateness, absenteeism and presenteeism (showing up to work physically, but not being able to function);
• decreased productivity due to distraction and cognitive slowing;
• lack of self-confidence;
• isolation from peers;
• agitation and increased interpersonal conflict among co-workers;
• increased voluntary and involuntary attrition;
• increased feelings of being overwhelmed; and
• decreased problem solving ability.

What can employers do?

The statistics as they stand are clearly unacceptable – mental health needs to be made an urgent priority by all employers in the construction industry. Emily Pearson, Head of Workplace Wellbeing at Be. The Centre for Wellbeing (a mental health charity based in Newcastle upon Tyne specialising in corporate mental health and workplace wellbeing) has provided the following steps that all employers can take to actively improve the health and wellbeing of their workforce.

1. Culture check – Undertake a culture check to establish the culture of the workforce and where there may be particular pain points for staff due to job design and work related stress;
2. Culture change – A change in the culture surrounding mental health needs to start at the top. Leadership teams can show commitment to creating a culture change towards mentally healthier workplaces and workforces by signing the Time to Change Pledge or by investing in a Workplace Wellbeing Strategy to create culture change in a safe and structured manner;
3. Mental health safety net – Employers should ensure their employees have access to and are aware of support available through counselling and therapy services;

4.Up-skilling and education – Team leaders responsible for supporting employees should have sufficient knowledge and skills to be able to spot the signs of poor mental health and to provide support and guidance;

5. Peer support – Employers should up-skill and educate employees so they can look out for any peers who may be struggling with their mental health. Knowing how to start the conversation and knowing how to safely signpost peers to mental health services can make a huge difference at the early signs of mental health difficulty;
6. Reduce stigma – Employers need to reduce stigma, raise awareness, change attitudes and provide knowledge to empower employees to look after their mental health and wellbeing; and
7. Embed and repeat – It is essential that employers continue to provide these interventions, services and training in order to embed culture change – not just tick the mental health box.

Commercial Factors

Employers need to prioritise mental health in the workplace for commercial reasons too. Unrecognised and unsupported mental health issues can have a massive impact on a company’s revenue. According to the National Building Specification, mental health issues account for people taking almost 70 million days off sick per year – the most of any health condition – costing the UK economy between £70 billion and £100 billion a year.

What can everyone do?

Established in 2016 by the Health in Construction Leadership Group with the support of the British Safety Council, Mates in Mind, aims to make sense of the options and support available to employers and individuals. As well as providing guidance for employers, it also provides useful tools for employees.

But the easiest thing that we can all do is talk. If you are concerned about a colleague, ask them if they’re ok. See if they want to go for a walk or a cup of tea at lunchtime. Generally create a safe environment so they can open up to you if they need to.

Even if you don’t suspect a colleague is struggling, be careful of the language you use anyway. Insensitive words or phrases can increase the stigma surrounding mental health and make it even harder for the people around you to feel like they can talk about any issues they’re facing.

Conclusion

Physical health and safety is already taken extremely seriously in the construction industry however statistics suggest that the most dangerous thing on a building site is the human mind. In a time where suicide kills more people in the construction industry than falls from height, it is only right that mental health and safety is given the same level of thought, time and investment as other site hazards to ensure that the workers in the industry are truly protected.

The industry has taken steps to reduce the stigma around mental health and to improve support but there is more that each and every one of us can do just by being aware of the signs and encouraging people to talk. Do not underestimate the impact you can make just by talking to someone. You could change someone’s life.

The Global Code of Ethics supports excellence in the development of coaching, mentoring, and supervision and it raises the standards of practice of their members. It was created by two professional associations, Association for Coaching (‘AC’) and European Mentoring and Coaching Council (‘EMCC’), in February 2016.

Three additional professional associations have joined this initiative in 2018: Association for Professional Executive Coaches and Supervisors (‘APECS’), Associazione Italiana Coach Professionisti (‘AICP’) and the Mentoring Institute at the University of New Mexico.

These five bodies have collaborated and combined their best practices to create an updated version of the Global Code of Ethics for the benefit of their members and society at large. This version comes into effect on May 1^st 2018 and will apply to all the signatories’ membership categories.

The signatories will be inviting other world-wide professional bodies in the field, to join this initiative and become organisational signatories.

This code has a wider impact by informing the work of people who may not be members of the signatory bodies but who practice coaching, mentoring, supervision, and training related activities or are sponsors, users, beneficiaries and purchasers of such services, anywhere around the world.

The Code has its own dedicated website – www.GlobalCodeofEthics.org – where the code will be translated into the world’s main languages. The new version of the Global Code of Ethics can be viewed here.

Contacts for the five signatories

Association for Coaching (‘AC’)

Jeannette Marshall

Jeannette@associationforcoaching.com

www.associationforcoaching.com

As a pioneering global body, with members in 60+ countries, the AC exists to advance the coaching profession and make a sustainable difference to individuals, organizations, and society.

European Mentoring and Coaching Council (‘EMCC’)

Marialexia Margariti

EMCC.VP.Quality@emccouncil.org

www.emccouncil.org

EMCC is the “go to” body that exists to develop, promote and set the expectation of best practice in coaching, mentoring and supervision across Europe and beyond, for the benefit of society.

Association for Professional Executive Coaching and Supervision (‘APECS’)

Adina Tarry

adina.tarry@apecs.org

www.apecs.org

Founded in 2004, The Association for Professional Executive Coaching and Supervision (APECS) exists to ensure that in a complex world, organisations are enabled to use professional coaching, supervision and advisory services to achieve ethical and sustainable growth.

Associazione Italiana Coach Professionisti (‘AICP’)

Lucio Caporali

etica@associazionecoach.com

www.associazionecoach.com

The AICP is Italy’s leading body in the coaching profession.

Mentoring Institute, University of New Mexico (‘Mentoring Institute’)

Nora Domínguez

noradg@unm.edu

www.mentor.unm.edu

The Mentoring Institute develops, coordinates, and integrates mentoring evidence-based effective practices into research, consulting, and training activities at the University of New Mexico (UNM).

Graduates continue to account for the bulk of genuinely global entry-level programmes as businesses strive to build workforces which are internationally mobile and future-fit. That is according to the latest research The Next Chapter: Your New Global Graduate Programme from talent acquisition and management consultancy, Alexander Mann Solutions.

However, the white paper, which is based on quantitative research and in-depth interviews with global brands including Rolls-Royce, GE, HSBC and BNP Paribas, amongst others, also highlights how many organisations struggle to find the most effective way to engage with and pipeline what often appears to be a challenging talent pool – particularly when attempting to balance a global Employer Value Proposition (EVP) with local cultures.

The research also reveals the ambitious and innovative steps that world-leading businesses are taking to triumph in the ‘war for talent’, which include: smart targeting, authentic messaging, local tailoring and blending digital engagement with the human touch.

Sandrine Miller, Global Head of Emerging Talent Consulting, Alexander Mann Solutions, comments:

“Our research found that graduates remain the most valuable source of emerging talent for almost half (47%) of senior HR leaders”

“The concept of a regional or international programme designed to attract and engage graduates of the world’s most highly rated universities is nothing novel to organisations. However, many major employers are now starting to question and review their traditional emerging talent strategies in what is arguably the most rapidly evolving candidate and business marketplace in history.”

“It’s clear from our research that the future of emerging talent programmes will be one of increasing alignment of the real needs of the organisation and the reality of the talent landscape. A ‘one size fits all’ approach is now irrelevant and outdated. Instead, tailored solutions will need to be developed which specifically address issues such as geographic dispersal, attrition and the differing requirements of individual businesses and functions under a corporate umbrella, if we are to succeed in sourcing and retaining the future generation of top talent.”

Family business owners are more innovative than owners of non-family businesses but are restricted by limited financial resources, says Dr Roberto Flören, Professor of Family Business at Nyenrode Business Universiteit.

Despite this, 79% of family business owners will forgo dividends in order to boost innovation, compared to 60% of non-family businesses.

The research, carried out in collaboration with global bank ING and NPM Capital, which provides private equity to family businesses, examined 399 private firms, of which 69% were family-run.

Dr Flören says:

“In order to remain competitive in arenas often dominated by much bigger corporations, small businesses have been required to innovate and exercise agility in order to succeed.”

“Historically, bad leadership was a pitfall for family businesses, with managers resisting change and embracing tradition. Now there is an almost completely different story, with over half of current directors stating that it is crucial for the continuity of the family business that the new director is even more innovative than the current one. It is clear that increasing numbers of these organisations are anticipating and preparing for this real threat ahead of time.”

His study found that 62% of all family businesses have brought at least one new product or service to the market in the past three years.

Dr Flören believes his study offers some important lessons for heads of industry to consider. He continues:

“The report clearly shows that family business owners are not resting on their laurels, however there are still key threats to innovation which often include dependence on the innovative strength of the founder and a high percentage of the family wealth being tied up in the business, making it unavailable for use on new projects.”

“Yet despite these challenges, 72% of all family businesses have significantly improved or updated their internal business processes over the last three years. It is clear that bigger corporations looking to implement a successful innovation strategy would do well to look to family businesses for inspiration.”

New research from Specsavers Corporate Eyecare shows how employers and employees value eye care as an employee benefit.

Undertaken among over 500 senior decision makers from companies across the UK, the research revealed that 89% of employers believe their employees value eye care as much or more highly than other benefits. It also showed that 88% of employers believe eye care contributes to the overall health and wellbeing of their staff.

Jim Lythgow, director of strategic alliances at Specsavers Corporate Eyecare, said:

‘We are delighted that eye care is being taken so seriously among UK companies and organisations. It would appear that it is viewed as an employee benefit in itself and not just as an obligatory provision for matters like the DSE regulations. Employers are clearly valuing the wider benefits of eye care, appreciating the contribution it makes in helping to maintain and improve employees’ health and wellbeing.’

Eyecare helps more than just eyesight

Indeed, an eye examination can assist with the detection and monitoring of many serious illnesses, including heart disease, diabetes and cancer, as well as more minor ailments such as headaches, tired eyes and migraines.

Despite recognising the value of eyecare, 26% of employers stated they spend less time sourcing and communicating eye care than they do on other benefits.

Jim Lythgow commented:

‘Many employers are likely to see sourcing an eye care supplier as less onerous than the sourcing of providers for some other benefits. This is a positive, making eye care a straightforward benefit to offer employees. However, we would like to see more time given to the communication of eye care. Employers may assume it’s easily understood by their staff, but not all employees will appreciate the extent that it can help to contribute to their overall health and wellbeing and the range of illnesses that can be detected.

‘It’s also important that employers let their staff know that the benefit is offered; while employers may be aware of their obligations, not all employees will know whether they are entitled to an employer-funded eye care benefit.’

For more information on the benefits of eyecare in the workplace, visit www.specsavers.co.uk/corporate.

New research has identified that powerful bosses can become “blind” to gaps in workplace connections between employees.

The research, conducted by academics in the UK, the US and Germany and published in the Journal of Applied Psychology, found that feelings of power reduces the ability to perceive opportunities to link people who are not already connected.

Paradoxically, such powerful people are actually more willing to “broker” such connections if made aware that gaps exist. The gulf revealed by the findings suggests that leaders are not taking full advantage of the connecting opportunity their powerful position presents, and are failing to make connections that can improve the flow of ideas and information, thus helping firms.

Conversely, people who feel less powerful tend to recognise the gaps in organisational networks, but may be less willing to take action because this might be seen as overstepping their role’s boundaries.

From a practical standpoint, therefore, powerful individuals within companies may need to rely on less senior staff to point them to gaps in the network of work relations, and these less powerful individuals may need to prompt their bosses to do introductions and close those gaps, or provide the less powerful individuals the freedom to serve as brokers themselves.

The paper, based on almost 500 U.S. and UK-based workers, is co-authored by Blaine Landis and Martin Kilduff of UCL School of Management, Jochen Menges of Cambridge Judge Business School and WHU-Otto Beisheim School of Management, and Gavin Kilduff of New York University.

Shock new research reveals that a majority of hirers feel permanent employment in no longer the default option for most roles, according to leading talent and recruitment events, insight and strategy firm, TALint Partners.

In a survey launched ahead of its talent leaders event, the Tipping Point, the firm found that only 29% of internal hirers and recruiters feel permanent jobs will remain the default option for the workforce in the foreseeable future.

The results of this survey suggest that the pace of growth in the gig economy will rapidly pick up speed. According to current estimates from the Chartered Institute of Personnel and Development (CIPD) more than half of the workforce works flexibly in some way. Statistics from the Office for National Statistics, have also revealed that almost 15% of the UK population – 4.8 million people – in the UK are self-employed.

Ken Brotherston, Managing Director of TALint Partners and host of the Tipping Point event, believes these figures will accelerate even faster:

“We all know the gig economy is growing rapidly, but a lot of employers have perhaps underestimated just how quickly the demand of candidates for traditional, permanent roles is dropping. The fact that so many internal hirers and recruiters are seeing such a rapid, and seemingly long-term change suggests a need to fundamentally re-think the current approach to perm vs temp roles. For those employers who believe that the ‘status quo’ is maintainable or desirable, these results suggest that they need to learn to be more flexible – and fast.”

“The challenge going forward is how businesses will cope with adapting to this evolution. We’re hoping that by bringing together industry leaders from the likes of APSCo, Adecco’s Group X, Credit Suisse and Manpower Group as part of our Tipping Point event, we can help hirers and recruiters better understand how to create the right environment for success in the future.”

More information on the Tipping Point event in June can be found on the website:
http://tlconevents.com/tippingpoint 

Andy Caldicott, MD of PeopleValue explains why employers won’t achieve better engagement from voluntary benefits unless they learn to communicate them better to staff

It’s no good providing valuable benefits if your staff don’t know about them!

The old adage, you can lead a horse to water but you can’t force it to drink, may resonate with some when it comes to Voluntary Benefits and in particular, discount schemes. However, I would take issue with that. As with almost everything in life, it’s all about how you communicate it.

It is a well proven fact that engaged employees will be more loyal, perform better and generally go that extra mile when you need them to.

According to Government-backed research by Hay Group, people who are motivated and have the necessary skills/equipment to do their jobs effectively are 50% more likely to outperform expectations and 54% less likely to leave their jobs. (https://www.haygroup.com/en/your-challenges/engaging-your-pe…) The same research found a clear link between employee engagement and an increase in competitiveness and business performance.

High value, low cost staff benefits 

Providing a Voluntary Benefits scheme, where staff can take advantage of over 7,000 different offers and discounts to save on their everyday purchases is something that is a low cost for an organisation to provide yet delivers high value to its employees.

The key to getting the most out of your Voluntary Benefits scheme is making sure that your communications about the programme are well targeted. You need to think about the make up of your workforce and ensure you clearly message you are providing something of value to them. Make sure that any specific retailers you highlight are relevant and of broad appeal otherwise you risk disengaging employees if they think “this isn’t for me”.

Tell ‘em it’s coming, tell ‘em it’s here, and then tell ‘em again

How you communicate the benefits also has a huge impact on take-up. Where do your staff go to get information? Not everyone is online, but certainly younger workers (millennials) will be on social media via their mobiles. Older workers may still prefer the company intranet, email, leaflets or posters in the canteen area. A multi-channel approach is typically what’s required. As well as ensuring that you make information easily accessible to all staff, you need to plan your communications. There are numerous studies that say you need a certain number of touchpoints (anything from 6 to 13) before people take action, so just telling staff about the discount scheme when they join the organisation or hiding it in the staff handbook certainly won’t be enough to get them to engage.

Plan internal comms like you plan your marketing

When launching a Voluntary Benefits scheme you need to plan your comms campaign as you would any other marketing campaign. You need to start before the launch, asking staff what benefits/discounts etc they would like, try and get them to contribute. Then you need to tell them it’s coming – make a big thing of it, maybe even hold a launch event. Depending on the demographic of your workforce you may need to consider training, for example, to ensure that they know where and how to access the service, or where to go on the staff intranet/employee hub/portal. Where possible, seek out “scheme champions”; individuals within your organization who are willing to help promote the scheme to their peers. Nothing sells something quite like a recommendation from one of your colleagues or workmates.

Then once launched, don’t just treat it as a box that has been ticked, you need to continually promote the benefit to ensure that staff stay engaged and that new staff are embraced. Each time there is something new, let people know, gather examples of just how much can be saved to whet their appetite.

With PeopleValue Advantage, we have numerous engagement tools built in to the platform and our consultative approach to delivering a tailored and measurable comms plan ensures we work with clients to maximise service usage and deliver the associated return on investment. We continually work to promote the package, helping to build that all important staff engagement.