What We're Reading:

What We're Reading:

Ukraine stalemate sets stage for possible winter escalation. With the war in Ukraine grinding through its 10th month, both sides are locked in a stalemated battle of attrition, which could set the stage for a new round of escalation. (AP)

EU adopts global minimum 15% tax on big business. Corporation tax is usually based on a company's profits. But often they might be able to pay less depending on where their offices are registered or how they invest in their business. (BBC)

Pakistan central bank’s forex reserves fall to near four-year low. Pakistan’s central bank says its foreign exchange reserves have fallen to $6.7bn, its lowest level in nearly four years as the country battles an economic crisis. (Aljazeera)

Brazil's economic activity shrinks in October on rate hike impact. Brazil's economic activity contracted in October as aggressive interest-rate hikes to battle inflation takes a toll on growth in Latin America's largest economy. (Reuters)

US-China chip war: How the technology dispute is playing out. The U.S. is rapidly ramping up efforts to try to hobble China's progress in the semiconductor industry—vital for everything from smartphones to weapons of war. (BBC)

Japan approves a historic new military build-up. Citing looming threats from China and North Korea, Japan has doubled its military expenditure. Tokyo will now focus on raising its counter-strike capabilities, according to the new policy. (DW)

ICS says shipping will overcome challenges and thrive in 2023. The shipping industry can overcome geopolitical challenges and thrive, said the Institute of Chartered Shipbrokers Greek Branch at its 17th Annual Forum. (HSN)

Tunisia: Parliamentary elections labeled a sham. Observers doubt that there will be any major changes given the president’s tightening grip on power. As the economic situation deteriorates, voters are gloomy. (DW)

Retail spending dips as holiday sales bite into inflation. U.S. shoppers pulled back on spending in November compared to October, in the biggest dip in almost a year. And for once, lower prices and sales seem to be part of the story. (NPR)

UK interest rates raised to highest level for 14 years. The Bank of England has raised U.K. interest rates to their highest level for 14 years as it battles to stem soaring prices. (BBC)

US puts 3 dozen more Chinese companies on trade blacklist. The U.S. Department of Commerce is adding 36 Chinese high-tech companies, including makers of aviation equipment, chemicals and computer chips, to an export controls blacklist, citing concerns over national security, U.S. interests and human rights. (AP)

How did Sri Lanka’s economy collapse in 2022? Persistent deficits made it difficult for Sri Lanka to meet its debt obligations, and the COVID-19 pandemic worsened the nation’s economic outlook. (The Street)

With high inflation rates and soaring energy prices, the global economy stands on shaky ground. While some countries fare better than others, economic data indicates a global recession is underway. Global GDP for 2022 is 2.9%, “which is less than pre-pandemic levels, and it is expected to decrease even more next year to 1.7%,” Jay Tenney, managing director of Trade Risk Group (Irving, TX) said during FCIB’s Global Expert Briefing. “Global inflation for this year, across the 12-month period, is projected to be at 7.9%, and for next year, the consensus is for 4.8%.”

The 4.8% inflation rate, while lower than inflation is currently, will keep central banks around the world on a tight monetary policy. “That tight monetary policy is going to affect the weaker economies and a lot of your emerging markets significantly more than it affects the U.S.,” Tenney explained. “The one thing to keep in mind, if you live here in the U.S., consider yourself lucky in comparison to the difficulties experienced throughout other parts of the world.”

Advanced economies around the world are expected to slide from a 5.2% GDP growth rate in 2021 to 2.3% this year and 0.3% next year, per Tenney. The Eurozone expects a 0% growth rate next year. “Interestingly enough, people think there will be shrinkage in the Eurozone,” he added. “Energy prices and availability are huge factors that affect Europe a lot more than the U.S. It affects Europe even more than some emerging economies.”

One of the emerging markets greatly affected is China despite being the second largest economy in the world. “There’s going to be tighter financial conditions in China that have more to do with their per-capita GDP than total GDP because on a per-capita basis, China is way down the ladder,” Tenney said.

China’s GDP growth is expected to rise to 4.9% in 2023, up from 3.2% in 2022. “This doesn’t sound bad in the U.S. but for China, where the populous has become conditioned to expect 6-9% annual growth, it is,” Tenney said. China’s real estate market is suffering due to over-building from funding with no profits to show. “This is starting to affect their bond market, which in turn affects their economy. Problems in the bond market are leading indicators of a recession.”

Eastern Europe has been negatively impacted by the Russian-Ukraine war and energy crisis. “This winter will be a tell-tale sign as to how Eastern Europe, and Europe in general, are going to fare moving forward,” Tenney said. “Most countries in Europe now fully expect all of 2023 to be recessionary.”

Data also shows that the two-year and ten-year yield curve recently set a 41-year-low and has been inverted for roughly five months now, according to Tenney. “These are for treasuries and are perfect recession indicators. This means that 100% of the time that these both invert, there is a recession. It’s never proven false and it’s just a matter of time,” Tenney explained.

In the U.S., the Fed continues to raise interest rates in hopes to lower inflation down to their 2.2% goal, but they’re selling off the securities portfolio they’ve been accumulating since 2008-9. “This leads the U.S. to an illiquid treasury market, which means that it’s harder to buy and sell treasuries because there’s been so much cash being pulled out of the institutions that they can’t buy and sell the treasuries on a regularly functioning global market like they used to,” Tenney shared.

Elevated interest rates don’t just affect the global economy, but individuals as well. “We’ve seen consumer debt rise exponentially here within the past 60 days … and it’s frightening how much our personal debt has increased recently,” Tenney said. “But it also puts additional burdens on governments because governments have sovereign debt that they need to pay interest on.” All we can do is hold on and prepare for what’s ahead.

Britain’s economy showed recent signs of GDP growth in October after contractions in November and December, but the country is still teetering on a recession, according to an article from The Guardian. The U.K. is still battling high inflation (which sits above 11%) and ripple effects from the Russia-Ukraine war. The Bank of England plans to continue hiking interest rates as a result.

“Business confidence has been falling dramatically as firms face into a wall of higher prices and energy bills, increased taxation, and rising borrowing costs,” David Bharier, head of research at the British Chambers of Commerce, told the news outlet.

“While today’s figures show some growth, I want to be honest that there is a tough road ahead,” said chancellor, Jeremy Hunt. “Like the rest of Europe, we are not immune from the aftershocks of COVID-19, Putin’s war and high global gas prices.” The International Monetary Fund (IMF) predicts a third of the world’s economy to be in recession next year, per The Guardian.

Brexit also has impacted trade between the U.K. and the EU, according to Politico. “The latest evidence suggests that Brexit has had a significant adverse impact on U.K. trade, via reducing both overall trade volumes and the number of trading relationships between U.K. and EU firms.”

The average number of days beyond terms is 21 in the U.K., and 33% of credit professionals say payment delays from U.K. customers are increasing, according to the FCIB Credit and Collections Survey. The top five most common causes of payment delays were cash flow issues (47%), followed by billing disputes, supply chain issues, cultural norms and customer payment policy.

What Credit and Collections Survey respondents are saying:

• "Current economic conditions in the U.K. are affecting the cash flow of many customers."
• "There has been a lot of bankruptcies in the U.K. after Brexit. Be careful granting credit as the economy in the U.K. will only get worse. The Ukraine war also has an impact on their economy, so monitor payments very closely."
• "Use credit insurance if approving net terms."
• “Know your real customer, not the trade/banner name but the true legal entity (5 C's of Credit).”
• “Obtain updated credit information. Look for owner and addresses verification as changes are often not communicated by the customer. Know all you can about the customer. Pull a credit report for payment history and legal status and name verification.”

The next FCIB survey opens today and covers Argentina, Belize, Saudi Arabia and the United States. Be sure to click here to complete the survey and share the link with your credit and collections network.

A bit of a misnomer, “quiet quitting” is when an employee does only the minimum necessary to keep their job. No going the extra mile, little enthusiasm. While “quiet quitting” has received a lot of media attention—and there are certainly historically significant nuances driven by working through a global pandemic and profound economic uncertainty—it’s not really a new trend. It’s the modern-day equivalent of worker disengagement. 

It’s true that an influential Gallup poll shows that the proportion of employees that are engaged has dropped (from 35% to 32%) and the proportion of employees that are actively disengaged has increased (from 13% to 18%) since pre-pandemic 2019. However, both the percentage of engaged and actively disengaged employees is nearly identical to what it was 20 years ago, according to the same Gallup polling data. Which is to say, abysmal. 

The real problem is that with the exception of a brief positive trend in engagement from 2013 to 2019, less than one-third of employees have been engaged at work. So should employers be concerned about “quiet quitting”? Absolutely. “Quiet quitting” is a valuable concept because it gives us a collective vocabulary for a deeply felt problem in today’s workplace: disengagement at work.

In a tight labor market, being able to engage employees matters even more than usual because great employees have options and will leave. And they have. Voluntary quit rates remain at a 20-year high while layoffs are near all-time lows. (There’s some evidence that quit rates are also happening faster—what commentators have labeled “quick quitting”—though there isn’t enough data to say if this is a lasting trend.)

How to re-engage employees 

Improving employee engagement is not a quick fix. You’re not going to be able to put together a retreat or bring in a motivational speaker and call it a day. The good news, however, is that we know from decades of research what works when it comes to increasing employee engagement. Not coincidentally, these are the same things that increase diversity, equity and inclusion. Our recommendation is to create a strategic plan that focuses on improving in four key areas:

1. Clarify (fair) expectations. 
2. Provide equitable opportunities for growth.
3. Teach managers inclusion skills.
4. Foster opportunities for belonging at work. 

Clarify (fair) expectations

Lack of clear job expectations, and especially raise and promotion criteria, have long plagued organizations and driven disengagement. But after two-plus years of pushing employees to step up and adapt at work amid a global health crisis, now is an especially good time to give all employees true clarity about what is expected of them. That means that your job descriptions should match the core competencies really needed to perform the role, and those core competencies should be what is reviewed and rewarded in raise, bonus and promotion decisions. 

These expectations should be fair and compensate people for all the work they do. If you ask or expect some employees to step up and take on extra responsibilities that benefit your culture, like planning events and celebrations or serving on committees, that work should be made explicit and compensated. Women, especially women of color, are more likely to take on such unpaid culture-building work, and they are sick of it. 

Employees should also know what they need to do to advance. When they don’t, they leave. A 2022 McKinsey and Lean In report, for example, found that having a strong sense of fairness and opportunity were the biggest predictors of employee retention.  

Provide fair opportunities for growth

Advancement doesn’t necessarily mean getting a promotion. Business needs often mean that not everyone can be promoted. But everyone can grow and learn in their job. And there is a vast amount of research that shows employees crave growth and learning opportunities. A Workday Peakon study of millions of employees, for example, found that employees that said they didn’t have growth opportunities were much more likely to quit within nine months.  

The key to introducing growth and learning opportunities is to ensure that they are equitable. Don’t just give growth opportunities like coaching, mentorship or stretch assignments to people that leadership has already identified as stars (these are often people who look very similar to the current leadership due to similar-to-me bias). Research shows that organizations actually benefit most when learning opportunities are democratized and given to those employees that are least likely to be on leadership’s radar, including underrepresented employees. 

Teach managers inclusion skills

Similar to offering equitable opportunities for growth and learning, good management, which includes caring about your employees as people, needs to be applied equitably. It’s not enough for managers to have good relationships with some employees. In fact, researchers studying employee turnover have found that employee turnover is highest when managers have great relationships with most of their team, but not all of their team. That scenario is actually worse than having just okay relationships with your whole team. The key is for managers to be able to connect with all their team members. 

Fostering connection is a skill that can, and should, be taught, starting with understanding how an individual’s identities can impact their experiences at work. Evidence shows providing managers with management training is highly effective. Invest in advanced manager training that encompasses why fostering inclusion and belonging is important for engagement and teaches the behaviors (like leading inclusive meetings, soliciting all voices, building equal relationships, etc.) of inclusion. 

Foster opportunities for belonging at work

Employers may feel like belonging isn’t their business. But, in fact, belonging is a basic human need and our needs don’t stop when we arrive at work (even less so when “arriving” simply means turning on the computer at home). If you want engaged employees, it is in your best interest to provide opportunities for belonging. This can include opportunities for colleagues to connect as human beings, like icebreakers, events, retreats, affinity groups and cross-team collaboration. 

Once again, it’s paramount that you take diversity, equity and inclusion seriously when designing these opportunities. It’s much easier to feel like you belong when you are in the majority or your life outside of work fits into the norm. It’s much harder when you’re a member of an underrepresented or marginalized group, and may feel you need to hide important parts of your identity to fit in. Work events scheduled in the evening and centered around alcohol, for example, may not be appealing to parents with young children or people that don’t drink for religious or other reasons. 

When done well, investing in employee resource groups is a highly effective way to promote belonging. ERGs create community spaces for colleagues from an underrepresented or historically marginalized group to connect across their shared identity. And remember, you should fairly compensate the leaders of these groups if it’s outside the scope of their core role.

“Quiet quitting “can be avoided through a strategic focus on diversity, equity, inclusion and belonging. It’s a matter of prioritizing this work and creating a long-term strategic plan to make it happen. If you believe employees should go above and beyond the bare minimum of their job, then DEIB isn’t a “nice-to-have,” it’s a must-have. 

Liz Kofman-Burns, Ph.D., is a sociologist and co-founder of the DEI firm Peoplism. She has over a decade of experience studying and implementing high-impact DEIB solutions. At Peoplism, Liz and her team have partnered with dozens of companies, from the Fortune 500 to start-ups and non-profits, to measurably increase diversity, equity, inclusion and belonging in the workplace. Previously, she helped translate research on bias in hiring into software at HR tech start-up Talent Sonar. Her work has appeared in Harvard Business Review, Fortune, Inc., TechCrunch, SHRM, Behavioral Scientist, and others. Liz has a Ph.D. in sociology from UCLA.

This article originally appeared on SmartBrief.

Week in Review Editorial Team:

David C. Anderson, Director, FCIB Member Relations

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate