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Losing It (HBR Case Study and Commentary)

Losing It (HBR Case Study and Commentary) ^ R0404A

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Publication Date: April 01, 2004

"It's worse than I thought....She's completely lost her mind," says Harry Beecham, the CEO of blue chip management consultancy Pierce and Co. The perplexed executive was in a hotel suite with his wife in Amsterdam, the latest stop on his regular trek to dozens of Pierce offices worldwide. In his hand was a sheaf of paper--the same message sent over and over again by his star employee and protegee Katharina Waldburg. The end of the world is coming, she warned. "Someone is going to die." Harry wouldn't have expected this sort of behavior from Katharina. After graduating with distinction from Oxford, she made a name for herself by single-handedly building Pierce's organizational behavior practice. At 27, she's poised to become the youngest partner ever elected at the firm. But Harry can't ignore the faxes in his hand. Or the stream of consciousness e-mails Katharina's been sending to one of the directors in Pierce's Berlin office--mostly gibberish but potentially disastrous to Katharina's reputation if they ever got out. Harry also can't dismiss reports from Roland Fuoroli, manager of the Berlin office, of a vicious verbal exchange Katharina had with him, or of an "over the top" lunch date Katharina had with one of Pierce's clients in which she was explaining the alphabet's role in the creation of the universe. Harry is planning to talk to Katharina when he gets to Berlin. What should he say? And will it be too late? In R0404A and R0404Z, four commentators offer their advice on this fictional case study. They are Kay Redfield Jamison, a professor of psychiatry and a co-author of Manic-Depressive Illness; David E. Meen, a former director at McKinsey & Co.; Norman Pearlstine, the editor-in-chief at Time Inc.; and Richard Primus, an assistant law professor at the University of Michigan. THIS HBR CASE STUDY INCLUDES BOTH THE CASE AND THE COMMENTARY. FOR TEACHING PURPOSES, THE REPRINT IS ALSO AVAILABLE IN TWO OTHER VERSIONS: CASE STUDY ONLY, REPRINT R0404X, AND COMMENTARY ONLY, REPRINT R0404Z.

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Fear of losing it: an auto-ethnographic case study exploring re-triggered loss experiences during psychotherapy training

Publisher URL: https://www.tandfonline.com/doi/full/10.1080/03069885.2020.1772461

DOI: 10.1080/03069885.2020.1772461

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Winning & Losing Big Google Updates: 50-Site Case Study

What on-page factors are associated with sites that see big gains or declines after Google updates? Turns out it’s not author boxes.

Throughout 2023, Google released a series of Core , Spam , Review , and Helpful Content Updates (HCU) that caused many sites to lose significant traffic and seemingly few to win.

For site owners specifically hit by Google’s HCU, Google said they could recover if they simply removed unhelpful content . 

Google’s guidance—while well-intentioned— is sufficiently broad that, at this point, nearly nobody has figured out yet how exactly to recover their traffic.

Google’s release of the HCU followed several earlier announcements, a number of which many believe were most significant:

• The addition of “ Experience ” to the concept of Expertise, Authority, and Trust (E-E-A-T), emphasizing demonstrated experience in content Google wishes to reward.
• Changes to Google’s Quality Rater Guidelines to place greater emphasis on effort, originality, and creator information when evaluating content.
• Updated guidance on Page Experience signals (UX) and how they would be incorporated into Google’s Helpful Content ranking system.

Working as an SEO—and part-time as a Google Quality Rater —I’ve looked at 100s of sites impacted by Google updates. And while patterns sometimes seem obvious, I knew firmer data would be valuable.

We know Google’s algorithms draw on many different types of data: on-page factors, user interaction signals, and off-page signals (e.g., links), to name a few. For this study, I looked at on-page factors , including on-page elements related both to UX and demonstrated experience, to see if we could tease out any insight.

A Study of Google Winners and Losers

To get a clearer picture, I examined 50 sites that either lost or gained significant organic traffic across Google updates between August and December of 2023. The selected sites saw traffic changes ranging from -67% to +5,595% over this period. 

The sites—both the winners and losers—were nearly all “content” sites, monetized through advertising and affiliate revenue (although a small number were monetized in other ways, such as selling digital products.) 

From there, I hand-collected over 2,500 data points regarding UX and on-page elements. For each site, I examined the live URL that lost the most traffic during the time period. All sites were evaluated on mobile. Finally, I looked for correlations and relationships in the data.

You can see the complete data set here . I’ve hidden the URLs to shield the site owners from unwanted attention.

Below, you can see the top results. Features with a positive correlation were associated with an increase in Google visibility , while features with a negative correlation were associated with decreased visibility . 

Caveats and Disclaimers:

• While the included represent a good cross-section of the web, this is a very small sample size. You should take all studies like these with a grain of salt.
• The study attempts to identify features associated with winning and losing sites. Importantly, these are not ranking factors , nor is anyone claiming them to be. While Google’s machine learning algorithms may associate these features with “Quality” or other ranking considerations, we simply can’t say for sure.
• Importantly, correlation is not causation (in case this is your first rodeo.)

Interestingly, while the data doesn’t reveal a single “smoking gun” that’s 100% correlated with lower or higher traffic, the effects seem to be additive when sites combine features together .

For example: sites that combined a fixed footer ad , scrolling video , and a lack of personal experience had an 83% chance of being in the “losing” group.

On the flip side, sites that used a high number of first-person pronouns and didn’t use stock images had an 83% chance of being in the “winning” group.

Keep in mind while many of these features saw positive or negative correlations, not all of these correlations were statistically significant (hello, author pages!)

In total, 17 stand-alone features showed at least some statistical significance. Let’s go over each of them below.

Most Highly Correlated On-Page Features

Here, you can see the most statically significant features along with their Pearson correlation coefficients, if they were negatively or positively associated with traffic, and the strength of evidence. A complete list can be found at the bottom of this post.

1. Fixed Ad – Footer

Association: Negative   |   Correlation: -0.522   |   Evidence: Very Strong

This describes an advertisement affixed to the footer of the page that “scrolls” with the user, often covering up Main Content (MC.) This seems related to Google’s Quality Rater guidelines stating the importance of “… Ads and SC do not block or significantly interfere with the MC.” 

2. Fixed Video Ads

Association: Negative   |   Correlation: -0.52   |   Evidence: Very Strong

This describes an auto-play video ad that follows the user while they scroll. While these ads can often be dismissed, it’s not always easy to do so, and the effect results in covering a significant amount of content. 

As Google’s guidance on page experience asks, “Does the content lack an excessive amount of ads that distract from or interfere with the main content?” it may come as no surprise that different types of fixed ads were the most associated with traffic drops in this study.

3. Stock Images

Association: Negative   |   Correlation: -0.403   |   Evidence: Strong

This describes when a site uses stock images or any images where it is clearly not the original source. This includes the use of unaltered product or manufacture images. For this study, if any of the prominent images on the page were not original, then they were placed in this bucket. 

That Google may want to reward more unique images could be related to Google’s increased emphasis on “originality” in both guidance around Helpful Content and instructions to Search Quality Raters.

4. First-Person Pronouns

Association: Positive   |   Correlation: 0.383   |   Evidence: Strong

First-person pronouns include words such as “I,” “we,” “my,” and “ours.” (These differ from second and third-person pronouns such as “you,” “yours,” “her,” and “his.”) For this study, I created a small program that counted the number of first-person pronouns in the first 1000 words of each URL’s Main Content. 

Examples include phrases such as:

• We found this pillow the most comfortable in our tests.
• Here’s where I made a mistake on my tax form.
• When we showed up at the restaurant, the owner greeted us at the door.

This result is perhaps the most surprising and potentially useful. As Google updated their Quality Rater Guidelines to place new emphasis on sites that demonstrate “first-hand or life experience for the topic,” it makes sense that sites that describe their personal expertise might do better in search. 

5. Number of Ads

Association: Negative   |   Correlation: -0.383   |   Evidence: Strong

This describes the total number of video and/or image ads on the page. 

While both winning and losing sites each displayed ads, losing sites were more likely to show ads (80%) than winning sites (52%.) Beyond this, losing sites also showed more ads, on average, than winning sites. Two of the sites in the losing group showed up to 38 ads on a single page, while the highest number of ads in the winning group was 25.

Even if you remove the sites with no ads from the analysis, there’s still a large difference in the data. In this case, winning ad sites contained 12.2 ads per URL, while losing ad sites displayed an average of 17.6 ads, or 44% more.

6. First-Hand Experience

Association: Positive   |   Correlation: 0.333   |   Evidence: Strong

This describes any page that demonstrates first-hand experience with the content, as described by Google’s Quality Rater Guidelines and is closely related to “First-Person Pronoun” use above. 

This quality is somewhat objective, and I leaned on my experience working as a Quality Rater to judge if the creators of the content demonstrated personal experience with the subject. For example, if it was a travel site, did the creators explain their personal experience with the location? For products, did they describe how they used the product or provide unique images or videos of themselves using the product?

One way to evaluate first-hand experience is to ask yourself, “ Could this content be created by anyone researching the internet, or did the creator use unique, first-person experience to create the content? “

7. Cookie Consent

Surprisingly, sites that displayed a cookie consent banner typically did better than sites that did not. This may be an excellent reminder that “correlation doesn’t equal causation.” It could be that higher-quality sites are more likely to use cookie consent screens. Or it could mean Google’s machine algorithms have learned to associate cookie banners with high-quality sites.

Or it could mean nothing at all. It’s worth noting that all sites were evaluated in the United States, where site owners often exclude cookie banners by default (although Mountain View, where Google views content, is also located in the United States.)

8. Notifications

Association: Negative   |   Correlation: – 0.333   |   Evidence: Strong

This describes any site that uses browser push notifications . Users often find them annoying, and it’s unsurprising that they are associated with losing sites. It’s worth noting that out of all the sites in this study, not a single winning site used push notifications . 

9. Mega Menu – Head

This describes a large navigational menu at the top of the website, usually expandable, containing a large number of links. For this study, the standard was 30 links or more , though most mega menus were much larger.

Mega menus weren’t included in the original study design. However, as I examined each site, I noticed many of the losing sites had them, and I recall many losing sites that I consulted with in the past year had them as well, so I wanted to see if there was a relationship. 

Mega menus can be helpful to users, but they are often created for SEO purposes. This could relate to Google’s guidance on avoiding content “ primarily made to attract visits from search engines. ” Alternatively, Google may be doing something with anchor text optimization with these updates, as mega menus are known to possibly decrease anchor text diversity due to selective link priority .

10. Contact – Footer

Association: Positive   |   Correlation: 0.3   |   Evidence: Moderate

This describes when a site clearly displays contact information at the bottom of the page. As Google’s updated Quality Rater Guidelines place extra emphasis on “ finding who is responsible for the website and who created the content on the page ,” I wanted to see if there was a relationship between contact information and traffic changes.

Out of ten sites total that didn’t display any contact information in the footer, eight were losing sites.

11. Unclear/Missing Logo

Association: Negative   |   Correlation: – 0.295   |   Evidence: Moderate

This describes when a site doesn’t display a logo (especially on mobile) or when the logo is unclear. The use of logos seems relevant as they can help identify who is responsible for the site and who created the content. 

Only four websites met this criteria, but every one of them was found in the “losing” group.

Logos can also help demonstrate E-E-A-T. For example, if your search query is “Boston Tourism” and you see the Meet Boston logo, you might reasonably decide this site has experience with Boston travel.

Note: Some sites choose to hide their logo on mobile. As the majority of searches take place on mobile, and both Google and its Quality Raters are known to evaluate sites using their mobile versions, site owners may want to consider the wisdom of hiding logos on any screen. 

12. Search – Footer

This describes any site that displays a search function near the bottom of the page. Like “Cookie Consent” above, it’s difficult to determine why this may be negatively associated with traffic change. It may simply be an aberration of the data, or it may be a pattern of lower-quality sites we can’t simply tease out.

13. Missing Contact

Association: Negative   |   Correlation: – 0.288   |   Evidence: Moderate

This describes when a page has no contact information listed anywhere on the page. As mentioned earlier, Google instructs Quality Raters to search for contact information when looking for information about who is responsible for the website content. 

Most sites in the study listed contact information somewhere on the page. However, out of seven sites with missing contact information entirely, six were in the “losing” group.

14. Any Contact

Association: Positive   |   Correlation: 0.288   |   Evidence: Moderate

This describes when a page displays contact information anywhere on the page. This is simply the reverse of the “Missing Contact” above. As negative factors can sometimes be easily changed to positives—depending on how you looked at them—I simply wanted to demonstrate how displaying contact information was positively associated with traffic.

15. Any Mega Menu

Association: Negative   |   Correlation: – 0.284   |   Evidence: Moderate

This describes when a page displays a mega menu (explained above) anywhere on the page. Sometimes, sites include mega menus in the footer instead of, or in addition to, the head. 

While this study didn’t find as strong of negative correlation with mega menus specifically placed in the footer (-0.058, p-Value 0.690931), overall mega menu usage was moderately correlated with lower traffic.

16. # of Affiliate Links

Association: Negative   |   Correlation: – 0.248   |   Evidence: Weak

This describes the total number of affiliate links on a given URL. 

Losing sites were more likely to have affiliate links than winning sites – 64% vs 36%. Losing sites also used more affiliate links, on average, than winning sites. The highest number of affiliate links on any single page in the winning group was 43, while the highest number of affiliate links in the losing group was 145.

That said, while this finding is statistically significant, the strength of the evidence can be classified as “weak.” Indeed, the negative relationship with affiliate links is far weaker than the relationship with ads. It may be that because ads represent a visual experience that can more greatly interrupt the user’s page experience, Google is more likely to demote ad-heavy sites.

17. Privacy  Anywhere

Association: Negative   |   Correlation: – 0.246   |   Evidence: Weak

This describes when a URL links to a privacy policy, anywhere on the page. 

This result may be surprising, as we are often told that privacy policies are good for user experience and establishing trust. On the flip side, spammers and low-quality affiliates are often the first to add privacy pages for exactly this reason. So it may be no surprise to see a weak correlation with lower traffic.

Other Correlations and Evidence

Listed below, you can see the complete results, including features with no statistically significant correlation with traffic.

Importantly, this study found no statistically significant relationship between author information (including on-page information such as author boxes), word count , editorial policies , use of copyright , affiliate disclosures , or many other factors. It could be that these elements are so common and ubiquitous on the web that their presence is simply noise to Google’s algorithms, and no reliable pattern could ever be discerned from their presence. 

Can You Recover From Google’s Helpful Content Update?

This is the multi-billion dollar question. In truth, the answer is we simply don’t know yet. While Google indicates it is indeed possible to recover from its Helpful Content system, there have been few, if any, verifiable “recoveries” documented on the web. 

That said, if I were to give advice to webmasters looking to regain lost HCU traffic, here’s what I would advise based on the results of this study:

• Reduce Ad Coverage . This includes removing/reducing ads that are fixed on user scroll, as well as auto-playing video ads that also can cover content when scrolling. In-content ads appear to be less damaging to the page experience, but if you have a lot of them, you should evaluate how they may detract from the main content.
• Reduce the Use Of Stock/Unoriginal Images . Based on these results, strongly consider removing unoriginal images, and replacing any stock images that you already use whenever possible. (For large sites, this could be a formidable task without a clear guarantee of benefit.) It’s typically better to photograph products, places, and things yourself, or even modify existing images to add unique value.
• Demonstrate First-Hand Experience. Avoid creating content that anyone on the internet could create with surface-level research. Show the user that you actually have experience with the subject at hand. For travel blogs, show that you’ve actually visited the places you write about. For products, show how you’ve actually used them. This advice 100% aligns with Google’s guidance on producing content, so it may be a good approach to aspire to.
• Make Your Contact Information Easy To Find. While this feature wasn’t as highly correlated with the ones above, making it easy to discover who is responsible for the site was associated with positive traffic change in every instance we looked at it.
• Strive For Originality: While not covered in this study, Google explains over and over again that one of the goals of the HCU is to reward “original” content over “low-added” content. Since search engine-first content often lacks originality (because everyone optimizes with the same tools and covers the same topics and keywords), the concept of information gain comes into play. Strive to completely cover topics in a way that makes it clear you’re using “ original information, reporting, research, or analysis .”

How Long Does It Take To Recover From Google’s HCU?

While Google says it is indeed possible to recover from the HCU, the timeframe is even more unknown. 

Google has stated it might take “ several we e ks to several months ” for sites to see recovery. Unfortunately, this means a long time to see results and makes it challenging to relate any changes that you make today with changes in traffic that may take multiple months down the road. 

Final Thoughts, Is It Worth It?

Keep in mind that Google gathers data from many sources, including directly from its users! While this study found many strong correlations between traffic changes and UX/on-page factors, it’s possible that recent Google updates, including the HCU, rely more on other data sources, such as user interactions.

That said, everything in SEO connects to everything else . Perhaps reducing the number of fixed scroll ads directly influences Google’s machine learning algorithms, or perhaps it simply provides a better user experience that Google sees by collecting user data. Either way, it’s tough to decide what to invest in.

Regardless of how we may feel about it, it is clear Google is nudging the web in a direction of its choosing, and it’s up to us if we want to follow.

Have you seen anything interesting with Google’s HCU? Let me know on LinkedIn , Twitter , or Threads ! 

Study Methodology

Over 100 candidate websites were chosen for analysis, and their Google visibility was recorded via Ahrefs estimates covering a timespan from August 17th to December 19th, 2023. After removing outliers, the 50 sites with the most consistent wins or losses were chosen for final inclusion. Website features were documented at the end of December. All websites were evaluated from the United States using mobile emulation on a Chrome browser. Pearson correlation coefficients were calculated between each feature and the target variable to measure the linear relationship between them. To determine the statistical significance of the observed correlations, a t-test was performed for each feature’s correlation coefficient. The null hypothesis stated that the true correlation coefficient was zero (no correlation). P-values were computed to assess the probability of observing the correlation coefficients under the null hypothesis. A p-value threshold of 0.05 was used to determine statistical significance. Special thanks to Paul P , Thomas Jepsen , and Shane Dutka for their public work, which aided site selection.

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Wegovy users keep weight off for 4 years, new analysis finds

Patients taking Novo Nordisk’s Wegovy obesity treatment maintained an average of 10% weight loss after four years, potentially boosting the drugmaker’s case to insurers and governments to cover the cost of the effective but expensive drug.

The Danish drugmaker presented the new long-term data on Tuesday at the European Congress on Obesity in Venice, Italy, in a new analysis from a large study for which substantial results had been  published  last year.

“This is the longest study we’ve conducted so far of semaglutide for weight loss,” Martin Holst Lange, Novo’s head of development, said in an interview, referring to the active ingredient in Wegovy and the company’s diabetes drug Ozempic.

“We see that once the majority of the weight loss is accrued, you don’t go back and start to increase in weight if you stay on the drug,” he added.

The data could go some way to convince insurers and governments to reimburse Wegovy, which ranges from $200 to almost $2,000 a month in the 10 countries it has been  launched  in so far.

Wegovy was the first to market from a newer generation of medicines known as GLP-1 agonists, originally developed for diabetes, that  provide  a new way to address record obesity rates. Eli Lilly launched its rival drug Zepbound in the United States in December. Neither company has been able to produce enough  to meet unprecedented demand .

Dr. Simon Cork, Senior Lecturer in Physiology from Anglia Ruskin University, said Britain’s public health service’s decision to limit coverage of the medicine to two years was “because of questionable long-term effectiveness”.

The new data showing benefits continuing to four years may go some way to negating that argument, he said.

How Wegovy benefits the heart

The 17,604-patient trial tested Wegovy not for weight loss but for its heart protective benefits for overweight and obese patients who had pre-existing heart disease but not diabetes. Participants were not required to track diet and exercise because it was not an obesity study.

Around 17% of trial participants stopped using Wegovy due to side effects, the most common of which was nausea, Novo said in another analysis in the trial published by the drugmaker on Tuesday.

Patients in the trial, called Select, lost an average of nearly 10% of their total body weight after 65 weeks on Wegovy. That percentage weight-loss was roughly sustained year-on-year until the end of about four years, where weight loss stood at 10.2%, the company said.

A third new analysis on Select published by Novo on Tuesday showed that the heart protective benefits of Wegovy to patients in the trial occurred regardless of their weight before starting on the drug and regardless of how much weight they lose on it.

“We now also understand that while we know that body weight loss is important, it’s not the only thing driving the cardiovascular benefit of semaglutide treatment”, Lange told Reuters in the interview.

The Select study, released in August, showed that Wegovy reduced the risk of a major cardiovascular event such as a stroke by 20% in overweight or obese people with a history of heart disease.

Novo says researchers are still working to understand the mechanisms of the cardiovascular protection that semaglutide provides.

Wegovy and Zepbound are being tested to assess their benefits in a variety of other medical uses such as lowering heart attack risk and for sleep apnea and kidney disease.

The weight loss in the heart trial was less than the average of 15% weight loss in earlier Wegovy obesity studies before the drug was launched in the United States in June 2021.

More From Forbes

The 5 secrets of haidilao’s $14 billion customer experience success.

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Haidilao’s 114B Dollar Customer Experience Success

Did you know the root of the word “restaurant” is the French verb “restaurer,” meaning “to restore.” Today going out to eat doesn’t always feel like that, but hot pot chain Haidilao set out to be different by leading with customer experience and now they are one of the top five most valuable food brands in the world, only surpassed by Starbucks, McDonalds, and KFC.

Founded in 1994 by Zhang Yong in Sichuan Province, China, Haidilao has grown into a behemoth with 118,000 employees, renowned not just for its food, but for the unforgettable dining experiences it offers. By May 2024, Haidilao's market capitalization is estimated to be approximately $14.19 billion.

Here are the five secrets to Haidilao’s customer experience success:

1. The Experience Is A Feast - For customers, the customer experience itself is a feast - totally unique from most fast food restaurants.

The waiting room includes a hand massage, shoe shine, noodle dance, and opera singer performance. If you’re alone Haidilao employees will sit a giant stuffed animal across from you to keep you company.

Once you are seated the surprises continue, with synchronized waiters bursting into choreographed dances if the customer knows the secret code and says “kemusan”.

2. A Laser Focus On Employee Experience - Store managers have an incentive to train and groom their top-performing employees to become store managers of new locations. By becoming a mentor both the new store manager and their “parent”–the name given to their mentor– take part in a profit sharing program. New store managers can then go on to groom other store managers, creating a “family” which can span multiple generations. Recently Haidilao reported over 90 families. Being the “head of a household” means you have mentorship responsibilities, and you are also responsible for the success of your location and all of the people working under the roof of your restaurant. The company boasts less than 10% attrition among frontline staff and 0% among managers. Remember, these numbers are in the restaurant industry!

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3. Creating Unique, Shareable Entertainment - The actual dining experience is entertainment itself. You might witness a traditional Chinese opera performance or see your waiter break into a dance while serving noodles.

Customers leave with stories to tell, fostering word-of-mouth promotion that is invaluable for any business. Plus, the entertainment is often so engaging and unique that diners are inspired to share their experiences on social media attracting the most valuable customers, referred customers.

4. Leveraging Technology to Enhance Service - Haidilao developed a super app that not only makes it easier to book tables and order food but also engages customers with personalized offers and interactive features.

5. Emphasizing a Customer-First Culture - While the company is employee-focused, they show you can be both employee and customer-focused at the same time. At the heart of Haidilao’s strategy is a customer-first culture. Every aspect of their service is designed to prioritize the customer’s needs and desires. This philosophy is embedded in their hiring practices, where they seek employees who are naturally inclined to care for others, and in their training programs, which empower staff to deliver exceptional service.

Whether you’re running a restaurant, a retail store, or any other type of business, these lessons from Haidilao can help you elevate your customer experience and build a stronger, more resilient brand.

Download my newest white paper, " The 10 Ways To Prove The ROI of Customer Experience ," and discover your needed data-driven customer experience strategies. Subscribe to my newsletter on substack for new exclusive content.

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Money blog: 'Extremely worrying' mortgage trend revealed in new report; a third of people make this mistake when booking their holiday - and how to avoid it

A third of travellers are making the same mistake when going on holiday, figures show. Read about this and all the latest consumer and personal finance news in the Money blog - and leave a comment or your money problem in the box below.

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Landlords selling properties "represent the single biggest threat to renters", according to the UK's landlord association.

Government data shows 5,790 households were threatened with homelessness between October to December last year due to receiving a notice to end an assured shorthold tenancy (this ends a person's tenancy).

And the National Residential Landlords Association (NRLA) has said 45% have been left needing help because their landlord planned to sell the property in the second half of 2023.

Separately, data from Rightmove found that 50,000 rental properties were needed to bring the supply of rental homes back to pre-pandemic levels.

Ben Beadle, chief executive of the NRLA, said the only answer was to "ensure responsible landlords have the confidence to stay in the market and sustain tenancies".

He said it was "vital" the Renters Reform Bill, which is currently being debated in the House of Lords, "worked for landlords as well as tenants".

"Landlords selling up is the single biggest challenge renters face," Mr Beadle said.

Around 16% of high net worth shoppers have cut spending on luxury goods, research shows - with Burberry among the companies seemingly taking a hit.

Data from wealth management firm Saltus , which surveyed 2,000 Britons who had assets of more than £250,000, found 16.29% of respondents had cut down on their personal spending in response to the current high interest rate environment and/or the impact of the rising cost of living.

And 15.78%, said they had cut down on luxury items and designer clothes. 

Meanwhile, just 9.42% of respondents said the current environment had not impacted their lifestyle.

The figures follow data this week from designer store Burberry - which reported a 34% drop in annual operating profit.

Mike Stimpson, partner at Saltus, said high net worth individuals were having to "prioritise spending on essential costs including mortgages and supporting their families". 

"While this reduction is not limited entirely to personal spending on luxury items, it is inevitable that brands like Burberry feel the impact, although different businesses will clearly respond differently to these pressures," he said.

The Department for Work and Pensions (DWP) is hiring 2,500 "external agents" to crackdown on "benefit cheats".

The extra staff will check millions of Universal Credit claims for accuracy as part of the government's new fraud plan.

Combined with the DWP's own internal agents tackling fraud, this will take the headcount to nearly 6,000 people.

In addition to this, the DWP is introducing a new civil penalty to punish fraudsters, and investing £70m into advanced data analytics to catch those who "exploit the natural compassion and generosity of the British people".

Work and pensions secretary Mel Stride, said: "We are scaling up the fight against those stealing from the taxpayer, building on our success in stopping £18bn going into the wrong hands in 2022-23.

"With new legal powers, better data and thousands of additional staff, our comprehensive plan ensures we have the necessary tools to tackle the scourge of benefit fraud."

With the new 15 hours a week free childcare funding coming into effect this week for children aged between 9-23 months, research shows grandparents still play a key role in helping with costs.

In April, all two-year-olds from eligible working families became entitled to 15 hours free childcare each week. 

And as of this week, eligible working parents of children aged between 9-23 months are also able to apply to claim the same from September.

The government plans to increase this to 30 hours a week from September 2025.

However, grandparents still play a key role and therefore are still likely to be called upon for help from parents, according to data from the finance firm SunLife .

Data shows that half of the UK's 14 million grandparents provide childcare for their grandchildren during the working week and this rises to 55% of those with grandchildren under the age of one.

On average, the UK's grandparents spend between 22-24 hours a week providing free childcare for grandchildren under three-years-old.

So how much are grandparents saving their families and what if they were paid?

Research suggests grandparents are saving parents around £250 a week in childcare costs on average - this means that collectively, grandparents are saving their families £96bn in equivalent childcare costs every year. 

SunLife's grandparent salary calculator, which uses the average pay for the many roles grandparents are taking to calculate what their "grandparent salary" would be, has also found that if grandparents were paid for the 22 hours a week they would receive an annual salary of £13,188.

Victoria Heath, chief marketing officer at SunLife, said it was   "no wonder" one in five grandparents felt their children would struggle financially without their help.

She said research showed that 13% of grandparents felt they were relied on too much for childcare, and 14% loved doing it but felt it was too much at their age.

"Having said that, most (59%) grandparents who do provide childcare say they love helping out, so it is likely they will still play a key role, because whether they are still 'needed' or not, they are certainly still wanted, and most are more than happy to do it," Ms Heath added.

How can you apply for the 15 hours free childcare?

To apply for the funding you'll need the following: 

• National Insurance number;
• Unique Taxpayer Reference (UTR), if you're self-employed;
• the UK birth certificate reference number of any children you're applying for;
• the date you started or are due to start work.

Then, you'll need to go onto the gov.uk website and start an application.

It usually takes 20 minutes to apply and once your application has been approved, you'll get a code for free childcare to give to your childcare provider.

Mortgage possession actions have continued to rise and are currently above the previous year's levels, according to data from the Ministry of Justice .

The latest data shows mortgage claims, orders, warrants and repossessions have continued their gradual upward trend and claims are at their highest since 2019.

When compared to the same quarter in 2023, mortgage possession claims increased from 4,035 to 5,182 - this is a rise of 28%.

Meanwhile, mortgage orders increased from 2,532 to 3,019, warrants from 2,636 to 2,881 and repossessions by county court bailiffs from 729 to 759.

Landlord possession claims also increased from 23,389 to 24,874 when compared to the same quarter last year.

Craig Fish, director at Lodestone mortgages and protection, told Newspage things "need to change and quickly before it's too late".

"Though this data makes hard reading and is extremely worrying, it's not unexpected due to the significantly higher interest rate environment in which borrowers now find themselves," he said.

And Ben Perks, managing director at Orchard Financial Advisers, said he was "concerned these figures will continue to rise". 

He told Newspage: "The Bank of England seems totally oblivious to the plight of the average mortgage borrower, but hopefully this data will kick their hesitancy to drop the base rate firmly into touch. The time to act is now."

Tesco has recalled its sandwich pickle over fears it may contain glass.

The supermarket has pulled its 295g jars of Tesco Sandwich Pickle with the batch code 3254 and best before date of 11 September 2025 due to the concerns of glass traces.

The Food Standards Agency has said on its website: "This product may contain pieces of glass which makes it unsafe to eat."

Last year, the supermarket chain had to recall pastry products, including sausage rolls and steak and ale pies, over fears they contained pieces of metal and plastic.

A Tesco spokesperson told Sky News: "We've been made aware that a specific date/batch code of Tesco Sandwich Pickle may contain small pieces of glass. Therefore, this product could pose a safety risk if consumed.

"Please do not consume this product and instead return any affected product to store where a full refund will be given. No receipt is required.

"Tesco apologises to our customers for any inconvenience caused."

By Ed Clowes, news reporter

The FTSE 100 has remained stable out of the gate this morning after hitting a record high on Wednesday as better-than-expected inflation data in the US raised hopes of an interest rate cut in September.

It's been a busy start to the day with financial updates from BT Group, Premier Foods, Sage Group, and easyJet.

We'll start with easyJet, after the airline announced that its chief executive officer, Johan Lundgren, would step down in January 2025.

Mr Lundgren, who has served as CEO since 2017, will be replaced by the carrier's finance boss Kenton Jarvis.

In a financial update on its performance throughout the first half of the year, easyJet reported slightly higher revenues than anticipated, while cutting its losses compared to the same period last year.

The airline's share price fell by 6% in early trading this morning.

Elsewhere, telecoms giant BT said it had completed a £3bn cost-cutting programme ahead of schedule, and announced a further £3bn in planned savings by 2029.

The company told Sky News that the planned reductions in spending would not lead to more job losses, after BT announced last year that it would eliminate 55,000 roles.

Incoming boss Allison Kirkby said she wanted the business to prioritise the UK, with some analysts expecting BT to look at the futures of its Italian, Irish, and American divisions.

And last but not least, one of Europe's largest sellers of Rolex watches has said that sales in the UK are still down because some tourists don't want to buy here "due to the lack of VAT free shopping".

Nice for some.

The price of a healthy packed lunch has soared by around 45%, according to new research.

A lunch of wholemeal bread and fruit is more expensive for parents to put together than less nutritious versions with chocolate spread and crisps, The Food Foundation charity has found.

Unhealthy lunches for the research were made up of white bread with chocolate spread instead of wholemeal with cheese, flavoured yoghurt rather than a plain, unsweetened version and snacks such as crisps as opposed to the four portions of fruit and vegetables incorporated into the healthy lunch.

And when it came to the cheapest supermarket to buy a healthy packed lunch, Tesco topped the list with a weekly cost of £8.56 as of this month.

Morrisons was the most expensive retailer, with the price of a healthy packed lunch per week coming in at £11.72, although this was down slightly from £11.80 in October.

The equivalent cost at Sainsbury's was £10.47, Aldi was £10.08 and Asda was £9.18.

Research also showed the largest price rise in recent months was at Sainsbury's, where customers have to spend 9% more than they did at the start of the academic year in September (£9.61) for the same packed lunch.

Shona Goudie, policy and advocacy manager at The Food Foundation, said, the government's stringent eligibility criteria to qualify for free school meals was "leaving hundreds of thousands of children" who are living in poverty "at risk of malnutrition".

"No one should be priced out of being able to provide healthy food for their children and retailers need to do more to support families to afford the food they need," she said.

By Bhvishya Patel , Money team

We spoke to three buskers to find out what it's like performing on the street in the UK.

Amir, 29, came to UK from Pakistan with passion for music

Amir Hashmi moved to the UK in 2022 to study, said he began busking in central London 10 months ago because "music was his passion".

"In Pakistan there are many problems so I decided to leave and move to London. I feel I can do better in London than my country," he said.

He said busking was now his primary income but at times he did jobs at warehouses to get by.

"I never started this for money, I started because it is my passion but now this is my main job as well," he said.

Amir, who often performs in the capital's Piccadilly Circus or along Oxford Street, said often he returned home with just £10-15 in his pocket after a day's busking.

He said: "Many times I sleep without food and sometimes I sleep on the floor of the road when I have no shelter.

"I don't have my own place to live but I have friends who often let me stay with them. They don't charge me any rent - they look after me.

"Sometimes I do private shows for income but it's very hard because the cost of living is increasing. If I go somewhere then most of the time I prefer to walk. I walk with my speakers and carry my gear."

Despite his financial struggles, Amir said he wanted to continue performing on the street as his "goal was to make people happy".

He said: "With busking, there is no stage and you can just start performing. Whenever I am performing, I connect with the people who have come to listen. If I feel people are not enjoying it, I change the song and try and make them happy."

Earlier this year, Amir recorded a song with Neha Nazneen Shakil, a Malayalam actress from India, who approached the singer three months ago in Oxford Street.

"I wrote that song 12 years ago and after all these years my song has been recorded now in London," he added.

Jade, 24, quit retail to busk

Jade Thornton, from Amersham, started busking in 2017 with a friend after leaving college at the age of 17 and quickly realised it was something she enjoyed doing and could make a living from.

She began doing it full-time at the end of 2018 but when the pandemic hit she described becoming "unemployed overnight" and having to take up retail jobs to support herself.

"I chose not to go to university - I just thought it wasn't for me so I went straight into some part-time retail jobs," she said.

"I take my cap off to anyone who does retail - it is one of the most gruelling jobs. People who do retail don't get nearly as much respect as they deserve. 

"Some of the customers I was facing were not that kind and I thought this is making me miserable, so I just thought 'if I don't leave now then when?'"

As the global economy slowly began to recover, she decided to leave retail and pursue music full-time in 2022.

"It is hard to switch off - I do busking but I am constantly messaging clients, writing set lists and learning songs," she said.

When it came to finances, Jade said there was no average to how much she could earn but it could fluctuate from £15-100 day-to-day depending on a number of factors.

"It relies on the time of month, whether the sun is out, if people have been paid, if Christmas is on the way or if Christmas has just passed," she explained.

The musician said she did struggle initially when she began busking but her parents were always supportive.

She said: "You obviously get a few questions from people asking 'are you sure you want to quit your job and sing on the street?'

"I lived at home for a long time and I'm grateful my parents could support me in that way because I know not everyone has that opportunity."

While performing outdoors is now Jade's full-time job, she said some months were more difficult to make money than others.

"If I'm being brutally honest in months like January and February it would be super difficult. This year I had enough gigs in December to cover me for January," she said.

"Last year from June-July and December I did not have to go busking because I got so many gigs through busking. I'm part of a lot of online agencies and I also do lots of pub gigs, weddings, birthdays and other events."

Jade noted though that the cost of living crisis had made things harder.

She said: "A few pub gigs I've had have been cancelled because they've had to rethink their strategies but if somebody cancels then I can just go out busking. There has been a slight dent when it comes to finances but that's from COVID as well - with COVID I was unemployed overnight."

The young musician went on to say she was "very grateful" when somebody did tip her and even small gestures like sitting, listening or just a smile were "currencies in themselves".

"It's escapism for me as a singer and then it's escapism for the audience as well," she added.

"Children also have such a great time listening to buskers and some may not have an opportunity for many reasons to go and see live music so if they can come across it in the street and that can spark something that's a wonderful thing to think I'm a little part of that."

Charlotte, 34, long-time busker

Charlotte Campbell, 34, who usually busks along the Southbank or in the London Underground, said she started busking during the 2012 London Olympics and while "busking used to be enough", more recently she has had to take on more gigs in the evening.

"A typical day is usually busking until around 6pm and then a gig in the evening - 8pm onwards," she said.

"I could still probably make a living from busking but I've taken on more paid gigs since the pandemic because everything became so uncertain. I think that uncertainty has just carried through now - that seems to be the way of life now."

The musician said tips for her CDs, which she puts on display during her performances, ranged between £5-10 and in the current cashless climate a card reader was "essential".

She said she pre-sets her card reader to £3 when playing on the Southbank and £2 when busking inside the London Underground "because people are rushing".

While she described her earnings as a "trade secret", she said the busker income had "definitely gone down" but this was due to a few factors - the pandemic, people carrying less cash and the cost of living crisis.

"Also, a lots of pitches have closed which means there are a lot more buskers trying to compete for one spot so all of those things have impacted my living as a busker," she said.

"I would say even though my income is primarily from busking I have had to subsidise it with more paid gigs than before. I just haven't felt as secure in my living from busking in the last couple of years.

"Most of the gigs I have are booked by people who have seen me busking so indirectly busking is my entire career- if I don't busk I wouldn't get the gigs I play in the evening. So directly and indirectly busking is my entire income."

In spite of uncertainty, she said it was freeing to be able to go out and perform for people in an intimate way.

"You are not up on a stage and there is no separation between you and them.  It's a really great connection you can make - I want to be able to hold onto that," she added.

Every Thursday  Savings Champion founder Anna Bowes  gives us an insight into the savings market and how to make the most of your money. Today she's focusing on children's accounts...

While the rates on adult savings accounts have risen and fallen over the course of 2024, the top rates on accounts for children have remained stable - but are pretty competitive once again, as other account rates have started to fall. 

And there are plenty of different types of savings accounts to choose from, from the tax free Junior ISA, to children's regular savings accounts, fixed term bonds and easy access accounts.

Those who are able to start saving for their children early, could significantly improve their financial health in the future – especially when taking compounding interest into consideration.

If you were to save £50 a month from birth, you could give them a gift of more than £17,250 at age 18, assuming a tax-free interest rate of 4.95% - which is currently the top Junior ISA rate available.

If you, your friends and family were able to gift a total of £9,000 a year to a child (the current Junior ISA allowance), at the same rate, you could give them almost £265,000 when they reach 18. 

Now that's a gift worth having!

Children have their own personal allowance, so for the majority there will be no tax to pay on their savings interest. 

However, parents should be aware that there may be a tax liability to themselves on the interest earned on any money they gift to their children, until they reach the age of 18. 

If the gross interest earned is less than £100 for each parent's gift, it will be treated as the child’s under a 'de minimis' rule. 

This means that provided the interest earned does not make the child a taxpayer, they will be able to offset this against their personal tax allowance, so it will often be free of tax. 

But if the interest is more than £100 for each parent's gift, then it will be treated as that parent’s interest for tax purposes and therefore they may need to pay tax at their marginal rate - if it takes them above their Personal Allowance and/or Personal Savings Allowance.

Gifts from any other family members or friends will not be viewed in the same way. Instead, any interest earned will be treated as belonging to the child themselves and therefore can be earned tax free if they are non-taxpayers.

The exception to this rule is on funds deposited into a JISA, Child Trust Fund or NS&I Premium Bonds.  The returns from these are tax free for all.

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Governor Newsom Unveils Revised State Budget, Prioritizing Balanced Solutions for a Leaner, More Efficient Government

Published: May 10, 2024

The Budget Proposal — Covering Two Years — Cuts Spending, Makes Government Leaner, and Preserves Core Services Without New Taxes on Hardworking Californians

Watch Governor Newsom’s May Revise presentation here

WHAT YOU NEED TO KNOW:  The Governor’s revised budget proposal closes both this year’s remaining $27.6 billion budget shortfall and next year’s projected $28.4 billion deficit while preserving many key services that Californians rely on — including education, housing, health care, and food assistance.

SACRAMENTO – Governor Gavin Newsom today released a May Revision proposal for the 2024-25 fiscal year that ensures the budget is balanced over the next two fiscal years by tightening the state’s belt and stabilizing spending following the tumultuous COVID-19 pandemic, all while preserving key ongoing investments.

Under the Governor’s proposal, the state is projected to achieve a positive operating reserve balance not only in this budget year but also in the next. This “budget year, plus one” proposal is designed to bring longer-term stability to state finances without delay and create an operating surplus in the 2025-26 budget year.

In the years leading up to this May Revision, the Newsom Administration recognized the threats of an uncertain stock market and federal tax deadline delays – setting aside $38 billion in reserves that could be utilized for shortfalls. That has put California in a strong position to maintain fiscal stability.

“Even when revenues were booming, we were preparing for possible downturns by investing in reserves and paying down debts – that’s put us in a position to close budget gaps while protecting core services that Californians depend on. Without raising taxes on Californians, we’re delivering a balanced budget over two years that continues the progress we’ve fought so hard to achieve, from getting folks off the streets to addressing the climate crisis to keeping our communities safe.” – Governor Gavin Newsom

Below are the key takeaways from Governor Newsom’s proposed budget:

A BALANCED BUDGET OVER TWO YEARS.  The Governor is solving two years of budget problems in a single budget, tightening the state’s belt to get the budget back to normal after the tumultuous years of the COVID-19 pandemic. By addressing the shortfall for this budget year — and next year — the Governor is eliminating the 2024-25 deficit and eliminating a projected deficit for the 2025-26 budget year that is $27.6 billion (after taking an early budget action) and $28.4 billion respectively.

CUTTING SPENDING, MAKING GOVERNMENT LEANER.  Governor Newsom’s revised balanced state budget cuts one-time spending by $19.1 billion and ongoing spending by $13.7 billion through 2025-26. This includes a nearly 8% cut to state operations and a targeted elimination of 10,000 unfilled state positions, improving government efficiency and reducing non-essential spending — without raising taxes on individuals or proposing state worker furloughs. The budget makes California government more efficient, leaner, and modern — saving costs by streamlining procurement, cutting bureaucratic red tape, and reducing redundancies.

PRESERVING CORE SERVICES & SAFETY NETS.  The budget maintains service levels for key housing, food, health care, and other assistance programs that Californians rely on while addressing the deficit by pausing the expansion of certain programs and decreasing numerous recent one-time and ongoing investments.

NO NEW TAXES & MORE RAINY DAY SAVINGS.  Governor Newsom is balancing the budget by getting state spending under control — cutting costs, not proposing new taxes on hardworking Californians and small businesses — and reducing the reliance on the state’s “Rainy Day” reserves this year.

HOW WE GOT HERE:  California’s budget shortfall is rooted in two separate but related developments over the past two years.

• First, the state’s revenue, heavily reliant on personal income taxes including capital gains, surged in 2021 due to a robust stock market but plummeted in 2022 following a market downturn. While the market bounced back by late 2023, the state continued to collect less tax revenue than projected in part due to something called “capital loss carryover,” which allows losses from previous years to reduce how much an individual is taxed.
• Second, the IRS extended the tax filing deadline for most California taxpayers in 2023 following severe winter storms, delaying the revelation of reduced tax receipts. When these receipts were able to eventually be processed, they were 22% below expectations. Without the filing delay, the revenue drop would have been incorporated into last year’s budget and the shortfall this year would be significantly smaller.

CALIFORNIA’S ECONOMY REMAINS STRONG:  The Governor’s revised balanced budget sets the state up for continued economic success. California’s economy remains the 5th largest economy in the world and for the first time in years, the state’s population is increasing and tourism spending recently experienced a record high. California is #1 in the nation for new business starts , #1 for access to venture capital funding , and the #1 state for manufacturing , high-tech , and agriculture .

Additional details on the May Revise proposal can be found in this fact sheet and at www.ebudget.ca.gov .

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Losing It (HBR Case Study and Commentary)

By: Diane L. Coutu, Kay Redfield Jamison, David E. Meen, Norman Pearlstine, Richard Primus

"It's worse than I thought....She's completely lost her mind," says Harry Beecham, the CEO of blue chip management consultancy Pierce and Co. The perplexed executive was in a hotel suite with his…

• Length: 9 page(s)
• Publication Date: Apr 1, 2004
• Discipline: Human Resource Management
• Product #: R0404A-HCB-ENG

What's included:

• Educator Copy

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• Included Materials

"It's worse than I thought....She's completely lost her mind," says Harry Beecham, the CEO of blue chip management consultancy Pierce and Co. The perplexed executive was in a hotel suite with his wife in Amsterdam, the latest stop on his regular trek to dozens of Pierce offices worldwide. In his hand was a sheaf of paper--the same message sent over and over again by his star employee and protegee Katharina Waldburg. The end of the world is coming, she warned. "Someone is going to die." Harry wouldn't have expected this sort of behavior from Katharina. After graduating with distinction from Oxford, she made a name for herself by single-handedly building Pierce's organizational behavior practice. At 27, she's poised to become the youngest partner ever elected at the firm. But Harry can't ignore the faxes in his hand. Or the stream of consciousness e-mails Katharina's been sending to one of the directors in Pierce's Berlin office--mostly gibberish but potentially disastrous to Katharina's reputation if they ever got out. Harry also can't dismiss reports from Roland Fuoroli, manager of the Berlin office, of a vicious verbal exchange Katharina had with him, or of an "over the top" lunch date Katharina had with one of Pierce's clients in which she was explaining the alphabet's role in the creation of the universe. Harry is planning to talk to Katharina when he gets to Berlin. What should he say? And will it be too late? In R0404A and R0404Z, four commentators offer their advice on this fictional case study. They are Kay Redfield Jamison, a professor of psychiatry and a co-author of Manic-Depressive Illness; David E. Meen, a former director at McKinsey & Co.; Norman Pearlstine, the editor-in-chief at Time Inc.; and Richard Primus, an assistant law professor at the University of Michigan.

THIS HBR CASE STUDY INCLUDES BOTH THE CASE AND THE COMMENTARY. FOR TEACHING PURPOSES, THE REPRINT IS ALSO AVAILABLE IN TWO OTHER VERSIONS: CASE STUDY ONLY, REPRINT R0404X, AND COMMENTARY ONLY, REPRINT R0404Z.

Learning Objectives

In this case, a managing director of a consulting firm must decide what to do about a high-performing employee who is suffering a psychotic breakdown. The reader considers the legal and other implications of several possible responses, including firing the person and encouraging her to take a medical leave. The reader also encounters strategies for educating workers about the symptoms and treatment of mental illness, accommodating an ill employee's limitations through job design, and ensuring the safety of the employee and his or her colleagues.

Apr 1, 2004

Discipline:

Human Resource Management

Harvard Business Review Digital Article

R0404A-HCB-ENG

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