Jobs

​​Assessing the impact of AI on the job landscape 

by Madaline Dunn

For many, it feels like ChatGPT came out of nowhere, only to completely shift day-to-day living. OpenAI launched its language model-based chatbot back on November 30, 2022, and in the short amount of time it’s been out, it’s had a BIG impact, and competitors have since come onto the scene with their respective offerings.

But, what does it all mean? AI experts are warning of danger ahead, and already, companies like IBM and BT have signalled that they will be making AI-related job cuts.

In all the hubbub, it can be difficult to know where you stand, so in this week’s article, we’ll explore the following:

  • The potential scale of impact on jobs
  • How people from the world of work are reacting
  • How is the government dealing with the potential threat

The scale of the issue and impact

When listening to the experts, it seems as though the advancement of AI is unavoidable and inescapable, and it will undoubtedly have a presence in our lives. But how will it impact the world of work?

According to a report by investment bank Goldman Sachs early this year, AI could potentially replace a quarter of work tasks in the US and Europe – however, it will impact sectors differently.

While 46% of tasks in administration and 44% in legal professions could be replaced by automation, for construction, the figure stands at 6%.

It’s also worth noting that this displacement will also likely be experienced differently for men and women, with women dominating in clerical work. Indeed, research shows that more than twice the share of female employment could be affected.

High-income economies are also more likely to be affected, at a rate of 5.5 per cent, versus 0.4 per cent in low-income economies. That said, experts say that many places aren’t yet prepared for the disruption ahead. Some figures show that over 50 million Chinese workers will require retraining, while in the US, this figure stands at 11.5 million.

It’s also important to note that forecasts vary widely, too, and while there have been a number of potentially catastrophic forecasts, including from Cred CEO Kunal Shah, who recently warned that 90% of people could lose their jobs in the next ten years, the likes of Forrester predict that generative AI will “influence 4.5 times more jobs than it replaces.”

Responses from the world of work

But how do those in the workforce feel about AI? It’s really quite mixed.

According to some research, 36% feel that AI will make them feel more stressed, while 37% are concerned it will mean their work is less accurate. Meanwhile, 38% shared data privacy concerns.

Elsewhere, Censuswide, on behalf of Visier, found that those already using AI in the workplace saved around 1.55 hours a day – or 390 hours a year and 40 per cent think it will enhance their work-life balance.

Further to this, around 31 per cent believe it can help close the skills gap in the UK. This is huge, considering that 73% continue to report skills gaps, only 11% of UK workers have digital skills and 54% of organisations don’t have specific skills initiatives in place for specific talent pools. 67%, meanwhile, believe that developing AI skills will be important for their future career growth.

Speaking about this, Ben Harris, Director UK MD at Visier, said: “The workplace has been disrupted by rapid innovation and everyone has a role to play in its smooth adoption. With skills gaps widening across the UK, AI can alleviate a wide range of pain points. But, with opportunity comes responsibility.”

In order to survive and thrive in the new world of AI, some have suggested that workers learn how to code, become more data literate, and hone in skills that are AI-proof, such as communication, collaboration and adaptability skills. A central focus for people in this new world of work will also be becoming lifelong learners.

How is the government dealing with the potential threat?

Considering opinions are so divided, and the technology will reshape the world we live in so dramatically, you might be wondering what the government plans- on doing to regulate it and keep things in check. There’s also a lot of support for regulation, with almost 60% of British people wanting regulation to be introduced for AI in the workplace, according to Prospect Trade Union.

The government set out the need to legislate in an AI white paper earlier this year, but has been urged to speed things up due to how quickly AI is evolving.

Recently, the Science, Innovation and Technology Committee chair and Conservative MP Greg Clark said: “If there isn’t legislation passed in this session, then assuming the election is in late 2024, the earliest that new legislation can reach the statute book is mid to late 2025.”

Clark pointed out that, by then, two years will have passed, by which time, AI will have continued to be deployed and developed without the “statutory means to govern it.”

“And other jurisdictions such as the EU or the US will be proceeding themselves, and there is a danger that what has become embedded in Europe and in the US could become the default means of regulation, even if we had a better model in mind. That’s another reason for getting on with it.”

Elsewhere, the TUC recently launched an AI taskforce, bringing together leading specialists in law, technology, politics, HR and the voluntary sector for legal protections for both employers and workers. It reportedly aims to publish an expert-drafted AI and Employment Bill early in 2024 and will also lobby to have it incorporated into UK law.

The taskforce says that the UK is “way behind the curve” on the regulation of AI, and outlines that AI capabilities, left unchecked, could result in “greater discrimination, unfairness and exploitation at work across the economy.”

It appears there’s still a long way to go when it comes to implementing regulation around AI and while the UK plans to hold an AI Safety Summit in November, that’s still quite some way off.

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Wednesday, September 13th, 2023 Jobs No Comments

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Weighing up early retirement

by Madaline Dunn

When it comes to thoughts about retirement, many can’t wait to clock out for the last time, willing it to come as fast as possible. A third of people, for example, want to retire by the age of 60.

That said, very few believe they’ll actually achieve this. Research from Hargreaves Lansdown found that adults aged 34 and under expect to retire when they’re 63, on average, while only one in eight believes in the feasibility of retiring by age 55. For those further on in their lives, for example, those aged 55 and over expect to retire much later, 68 years old on average, and as many as one in five believe they’ll have to wait until 70 years old to retire.

Research from Canada Life has, however, found that more than two in five UK adults aged 55-66 years old have taken early retirement since the beginning of the pandemic in March 2020. Still, it’s important to note that new research finds little evidence for the so-called ‘Great Retirement’ and instead cites long-term illness as the reason for large swathes of older workers leaving the workforce.

In this week’s article, we’ll explore the following:

  • The motivations behind people pursuing early retirement,
  • What’s required to retire early and how to plan for it,
  • The risks associated with early retirement.

The motivations for early retirement

While many view retirement as the end of one’s working life, for many, it can actually be an opportunity to pursue a new career, look into consulting, volunteering, or even get back into education and study. Others see it as an opportunity to spend more time with their family and get back in touch with themselves and their passions.

Of course, not all are looking to leave the workforce solely to enjoy their golden years. According to Dr Afik Gal, co-founder of Assured Allies, age discrimination can play a part in pushing people into early retirement. Likewise, layoffs can also be a reason for early retirement, as can declining health.

What’s required to retire early and how to plan for it

When considering taking early retirement, there are a few things that will be required to ensure the process is as smooth and sustainable as possible. To begin with, it’s worth asking yourself some questions to ensure that you’re both emotionally and financially ready to retire. Some of these questions include:

  • Have I got any debts I need to pay off? When looking to retire early, it’s important to ensure that you pay off debt and avoid accumulating further debt, as far as possible. Long-term and short-term loans come with interest and divert money away from savings.
  • Do I need to pay off my mortgage? If you can afford it, making overpayments on your mortgage can help you pay it off sooner rather than later, and you’ll pay less overall. That said, be sure to check whether you’ll be faced with any repayment penalties before doing this. Some advisors also warn that you might risk depleting your liquidity, so make sure to check whether it’s the right move for you.
  • How much money will I spend each month, and do I have enough for daily expenses? Having a clear idea of where you are financially will help you make this decision much more easily and work out a budget for basic day-to-day living. It’s also worth noting that the figure you come to will likely increase yearly with inflation.
  • How much do I require for my discretionary funds? While you may have the basics covered, it’s important to factor in the money you’ll want to spend on leisure activities, treats and holidays. If you’re in a situation where you’re just scraping by each month, you’re unlikely to enjoy your early retirement.
  • Have I planned for unexpected events and emergency savings? For most, life is rarely straightforward, and whether it’s a medical emergency, a burst pipe, or, say… a pandemic, you’ll likely face a few curveballs in the years to come. It’s a good idea to have an emergency savings fund to prepare for these unforeseen events.
  • What are my plans for after I retire? Experts say that it’s key to make plans post-retirement for fulfilment and mental stimulation. Do you plan to pursue a new hobby, volunteer, or study?

When you’ve weighed up whether or not an early retirement is for you, there are a few actionable ways you can plan ahead.

Once you’ve figured out the sum of what you’ll need to survive and thrive in retirement, it is key to make an inventory of all of your assets, so you can determine where your retirement income will be derived.

You’ll need to review your pension options, too. You won’t be able to access your state pension until you reach state pension age, and if you retire early, you might be entitled to less. Likewise, it’s important to check the rules around your personal or company pension – in some cases, you may not be able to access it early, but on the other hand, if you retire due to circumstances out of your control, such as illness, you might be able to access an enhanced pension. The details will also be different regarding defined contribution pension schemes, so be sure to get your ducks in a row.

Once you’ve looked into your pension pots, also assess any investments you have, how much your property is worth, and whether downsizing could be an option. Equally, you may decide on a phased retirement or decide to take up part-time work to supplement your retirement income.

After that, experts advise you to make a savings and investment plan, and if you follow the FIRE movement to retire early, set aside 25% and 50% of your monthly income.

It’s also worth speaking to a financial advisor, who will be able to guide you through the process and help you weigh up your options.

What are the risks associated with early retirement?

Early retirement is not without its risks. From a financial perspective, it’s important to note that economic recession, inflation and unexpected medical expenses can leave you in a position you may not have prepared for.

Right now, for example, inflation is at a 40-year high, and the cost of living is rising sharply. Likewise, if your pension doesn’t stretch as far as you thought it might, you may have to re-enter the workforce, which could come with challenges, especially with an employment gap. It’s also worth bearing in mind that you might live longer than you’d expected and so, it’s a good idea to make sure you can pay for the cost of care in later life.

Aside from the financial side of things, it’s also key to note that some research suggests that early retirement can be bad for the brain. Some research, for example, has found that those in retirement have a 38% faster rate of verbal and memory loss than those still working. Likewise, the National Institute of Health estimates that a third of individuals in retirement have symptoms of depression.

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Monday, March 6th, 2023 Economy, Pensions No Comments

The rise of the side hustle 

by Madaline Dunn

There has been an exponential increase in the number of people pursuing a side hustle in the UK in recent years. Freelancing sites like PeoplePerHour, for example, have seen astronomical growth in the number of people signing up. Similarly, the number of people using Vinted and other selling platforms has also skyrocketed. Whether it’s to earn a bit of extra cash when money is tight or to pursue passion projects on the side, there are so many reasons why people are getting into the entrepreneurial spirit.

Interestingly, while you might think that working an extra job on the side of your main gig might make you feel worn out, studies have shown that having something on the side can actually lead to employees feeling more fulfiled.

That said, it’s important to note that while a side hustle can help top up your monthly wages and build your business, there are some important details to bear in mind. At The Salary Calculator, we’ll walk you through the following:

  • Why more and more people are pursuing a side hustle
  • The tax implications of adopting a side hustle
  • How to protect yourself, business and employment when side hustling

More people join the side hustle revolution

Some call it the ‘Golden Age of Entrepreneurialism”; others the “Rise of the Side Hustle,” but one thing is for sure, more and more people are taking on extra work alongside their primary job. Whether a second job or a side project, a recent Barclaycard survey, found one in 12 people in the U.K. now has a side hustle, the equivalent of 6.49 million people.

A number of factors are fueling the surge, including the development of various technological tools and platforms, increased flexible working arrangements, and the rising cost of living. According to Aviva, some of the most popular forms of side hustling include selling handmade products, art and photography, and freelancing. Many are also increasingly using social media as a platform through which they can earn money.

The tax implications

If you’re taking on work alongside your main employment, you will need to declare your earnings with HMRC, and you’re also responsible for paying tax on any earnings you make. The only exception to this is if you earn less than £1,000, which is the threshold allowance of additional income outside of regular employment.

So, how do you go about this? Well, first, you’ll need to register your side hustle with HMRC and file a Self Assessment tax return. This needs to be done every year by 31st January, which is also the deadline for paying anything you owe. To make sure you have everything in order to report your earnings, be sure to keep copies of your invoices, bank statements and receipts.

While for the time being, those working a side hustle only have to submit an annual Self Assessment tax return, and payment on account on July 31st, HMRC is introducing Making Tax Digital for Income Tax. Through this new initiative, those earning money through a side hustle will have to submit quarterly returns, and a single final declaration for all income on January 31st. While this was due to be introduced in April 2024, this is now being pushed back and is launching in two phases:

  • April 2026 for those earning over £50,000, and
  • April 2027 for those earning over £30,000.

It’s always good to make sure you’re keeping track of your finances and putting money aside each month to pay your tax bill, so you’re not left with a big bill at the end of the year and unsure of how to tackle it. To figure out the exact tax implications of your side hustle alongside your full-time employment, head over here.

When you register with HMRC, you’ll also have to decide how you’re registering, whether that’s as:

  • A sole trader
  • A partnership, or
  • As a limited company

If this all sounds like a headache, it could be work speaking to a tax advisor to get expert insights on the tax implications. Likewise, there are accounting platforms that can help make dealing with taxes a bit easier. Xero, Sage and QuickBooks are some of the most popular.

Safeguard your side hustle

When it comes to earning extra income on the side of your main job, often safeguarding your business can be a bit of a second thought. However, it’s key to make sure that you’re protected and doing everything above board, because side hustling can be potentially risky without taking the above into consideration.

First of all, check your employment contract, as some companies require you to disclose business activity outside of your day job. More often than not, if your business operates outside of your working hours, is not distracting you from your full-time job and you’re not operating in competition with your employer’s business, your employer will give your side hustle the green light.

In addition to this, it’s essential you find out the obligations for your industry, as you might require a licence and it’s also worth looking into whether your business could benefit from insurance. Some options include:

  • Public liability insurance, which applies when someone gets injured or incurs a financial loss, and holds your business responsible,
  • Professional indemnity insurance, which protects you if a client loses money as a result of bad advice, services, or designs,
  • Employers’ liability insurance, which only really applies if you choose to develop your business and take on staff to assist you with your work and is a legal requirement.

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Tuesday, February 14th, 2023 Jobs No Comments

The cost of living crisis: Working from home versus at the office

by Madaline Dunn

The working from home revolution has brought many people flexibility, more job satisfaction and savings; however, as the cost of living crisis bites, some are starting to weigh up whether it’s still a better option than in-office working. As the winter months draw nearer, some think that returning to the office might help them save money.

At The Salary Calculator, we’ll explore:

  • The current cost of living crisis and employment trends,
  • The cost of working from home,
  • Whether working from the office can save you money.

Cost of living hike and employment trends

According to figures from the ONS, around 40% of adults in Britain now work in a hybrid working model, with 30% of the UK workforce working from home at least once a week – 8% of workers didn’t even step foot in the office for the entirety of 2021. Research from last year also found that around 70% believed that workers would never return to the office in the same way ever again, with the majority expressing a preference to work from home either full-time or “at least some of the time.”

However, this was before the cost of living crisis had taken a turn for the worst. Now, around 89% of adults (46 million people) report that their cost of living is continuing to increase. While almost everything is on the rise, with Citi investment bank warning that inflation could exceed 18% in January, rising heating costs are for may their primary concern. It’s not surprising considering that the energy price cap was due to reach £3,549 a year in October. However, the new Energy Price Guarantee means that a household with average usage will pay £2,500. This means that the 80% rise in energy bills that was due to come into effect on 1 October will be avoided, but many will still be faced with bills they can’t afford.

As Paul Johnson, director of the Institute of Fiscal Studies (IFS), says, the energy freeze is “very poorly targeted” and one that will benefit “better-off people.” This was echoed by Torsten Bell, the Resolution Foundation’s chief executive, who said, despite the support being “big” and “bold,” families should still expect a “tough winter ahead, with rich households getting twice as much cost-of-living support as poorer households next year.”

Experts forecast that without the government intervening, the number of UK households in fuel poverty could reach 12 million by January, with The End Fuel Poverty Coalition highlighting that 42% of households will be unable to afford adequate heat and power from January. The situation is so dire that the head of the World Energy Council (WEC) has said that the UK will have to begin to develop a spirit of “radical generosity” in order to prevent the loss of lives.

With energy becoming so expensive, it appears that the trend of working from home may phase out. So let’s break it down – which option is cheaper?

The cost of working from home

According to Uswitch, by winter, those working from home, rather than the office five days a week, will use around 75% more gas each day and 25% more electricity. Analysis from New Statesman’s business editor Will Dunn also found that poorly insulated homes in the UK could cost over £30 a day to run. Considering that a study conducted by EDF in partnership with property data platform, Sprift, found that only 58% of the 21 million homes across England and Wales studied meet insulation standards of 1976 or earlier, many people will find themselves paying more.

Specifically, research shows that from 1 October, a large 32kW boiler will cost £4.80 an hour to heat, boiling a kettle will cost 10p, and running a desktop PC and monitor will add £1.25 a day at the new rate of 52p per kilowatt hour. However, on the childcare front, while not always ideal, working from home can mean that you pay less in childcare costs.

Speaking about this, Uswitch energy spokesman Ben Gallizzi said: “Using extra energy when the heating would usually be off will be especially noticeable on bills this year with prices rising by 80%.” Adding: “Not only do people working from home use more energy staying warm, they are also cooking lunch and making cups of tea, as well as running computers, TVs and phone chargers.”

Can working from the office save you money?

Many of those working from home are beginning to feel the pinch, and research from MoneySupermarket.com shows that now around 14% plan to head to the office more often to help save on energy bills. Interestingly, this figure rises to 23% for those aged 18-24 years old.

That said while returning to the office means you’re likely to save on energy bills, it will cost you in other respects. Working from the office means travelling in, and transport costs are currently also pretty high. 

If one travels by car, factoring in Confused.com’s estimate that the average daily commute equates to 5,040 miles a year, and NimbleFins estimation that the real total cost per mile of driving is roughly 47p, this means annual commuting costs will reach around £2,370.

If you don’t drive, travelling by train can be equally, if not more expensive than driving. New rail fares mean that the current price of the typical annual rail season ticket is £3,263, which is due to rise further by £433 next year. Meanwhile, The Times reported that a return journey from Reading to London would see commuters pay £4,860 for an annual season ticket, which is also £93 a week. The paper made a point to outline that this doesn’t factor in additional costs, for example, buses, Ubers and taxis from the station to your place of work. A monthly Oyster Travelcard for TfL services, for example, costs between £147.50 to £270 per month.

For parents considering returning to the office, it’s also important to take into consideration childcare costs. Childcare can be expensive, with research from the Coram Family and Childcare charity finding that the average price for children under two in a part-time nursery sets parents back around £138.70 a week. Money Helper reveals similar figures, with a full week of childcare costing £263.81 a week, which, over 39 weeks, reaches £10,289.

Final thoughts

With so many variables to factor in, the best way to determine what will be best for you and your finances is to review your bank statements and reflect on where you can make savings. If you’re able to travel to work via a less expensive medium of transport, pack your own lunches, and, if you have children, find suitable and affordable childcare, returning to the office might work in your favour.

However, if you live a significant distance away from your workplace’s office and would have to use public transport for travel, it might be best to continue as you are. Moreover, there are some hints and tips that can help you save energy when working from home, for example:

  • Turning your appliances off at the mains can save you £55 a year,
  • Ensuring you turn off the lights in rooms you’re not using can save you £20 a year,
  • Switching to energy-saving light bulbs can save you £13 per bulb per year,
  • Turning your thermostat down by just 1 degree can save you £150 a year,
  • Only filling the kettle with what you need can save you £36 a year,
  • Covering your pans with lids means your food will cook quicker, and you’ll use less energy – likewise, if you’ve got electric hobs, make sure to keep them clean; dirt and grease will make them less energy efficient.

While these savings may seem small in the grand scheme of things, they will all add up and leave you with more money than you expected while exerting minimal effort.

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Friday, September 16th, 2022 Economy No Comments

How the cost of living crisis is affecting the job landscape

by Madaline Dunn

The ongoing cost of living crisis appears to be an endless one. Living standards face their largest fall since the mid-1950s. Millions are being faced with dire financial situations and around 1.3 million are confronted by “absolute poverty.” As the situation worsens, many are desperately searching for a solution, and some are looking toward switching jobs as the answer. 

That said, some experts are warning that the grass is always greener on the other side, and that while workers may be lured in by higher-paying salaries, switching now might hurt them in the long run. 

At the Salary Calculator, we’ll explore:

  • How the cost of living crisis is affecting jobs
  • How switching jobs may benefit you
  • What to watch out for when thinking of exploring a new position

Cost of living crisis encourages job switches

Research conducted by Totaljobs has found that more and more people are looking for new job opportunities to help support them through their financial woes caused by the cost of living crisis. The UK job found that workers’ salaries are increasingly squeezed, and 47% are now living from payslip to payslip. 

Despite the ongoing financial challenge faced by many, nearly half (48%) have not received a pay rise, and those who did (42%) saw a rise that failed to meet the current rate of inflation. This has pushed 17% of workers to take on another job to supplement their income; meanwhile, 30% are taking on additional shifts. If you are one of the people thinking about taking on a second job, at The Salary Calculator, we can help you calculate your total take-home, just head over here.

For many, though, the crisis is pushing them to look further afield. Now, nearly 40% (37%) are looking to change lanes and find a new job. Those who were classified as essential workers were twice as likely to have to leave their jobs and move into a new sector due to higher wages. 

Commenting on the figures, Jon Wilson, CEO of Totaljobs, said that key workers were those who suffered most, despite the fact society “couldn’t have functioned without them” during the course of the pandemic. “This research illustrates that everyone is feeling the pinch of the rising cost of living – yet it is disproportionately felt by our key workers – to the extent that some are looking to move jobs for one that provides them with more financial security.”

Research from PricewaterhouseCoopers (PwC) has also uncovered that nearly one in five employees intends to leave their current jobs and find a new role within the next year. A further 16 per cent plan to leave the workforce on a temporary or permanent basis. Similarly to Totaljobs, the research, which considered responses from over 2,000 people in the UK, found that the main motivation for switching job roles was pay (72%).

The benefits of making the change 

Research from the Office for National Statistics (ONS) last year, revealed that those who switched jobs saw a pay increase of 6.6%. That said, the figures show that the size of the rise was dependent on sector and experience. 

Pay growth for those in the arts, entertainment and recreation sectors hit 21%, meanwhile, for those working in information and communications, the increase was one percent lower (20%). While employees working in these sectors saw significant salary growth, the research showed that the increase was even higher for those who moved to a new industry; overall median earnings growth in this scenario stood at 2.1 percentage points higher. 

For those with more years of experience within their sector, the benefits of a switch were also greater, with average earning growth in this bracket at just over 16%.

If you’re considering switching jobs, head over to this page to compare your current salary with the salary offered by a potential new job.

What do the experts say?

While there are certainly financial benefits to be had from a job switch, it’s important to note that it’s not all sunshine and roses. Some experts have said that switching jobs for financial reasons may mean less stability, and a loss of statutory rights. From a broader perspective, some have also noted that switching jobs regularly might make it more difficult to keep track of one’s pensions and ensure one is keeping up with one’s levels of pension contributions. 

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, outlines: “The grass is slightly greener on the other side of the fence, but the ground may be less stable.” Adding: “Switching jobs will boost your pay by an average of 6.6%, and switching industries, occupations or regions at the same time can have an even more dramatic effect. But before you jump the fence, you need to know what you’re giving up.”

Discussing the impact of switching jobs on pensions, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments: “You may have a job where pension contributions are above the auto-enrolment minimum, say 12%. If you then left that job the next role might only come with an 8% contribution, and if you don’t take action to increase your contribution back up to this level, then you will likely see a significant shortfall by the time you hit retirement. As we move jobs more often care needs to be taken that contribution levels are maintained wherever possible.”

Morrisey continues: “In addition, regular job moves increase the likelihood that you will lose track of pensions from previous employers. You may misplace paperwork or stop receiving documents because you moved house and didn’t update your details, or your provider might change name making it harder to track down.”

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Tuesday, June 7th, 2022 Jobs No Comments

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