With 730,000 fewer people on payroll we must ensure they have the opportunity to get the skills they need to access employment

@ONS estimates of employment, unemployment, economic inactivity and other employment-related statistics for the UK labour market: August 2020 

The ONS figures published today (11 Aug) show a 730,000 drop in workers on payroll from March to July this year. This is why we need to focus on providing skills and training to those most in need, and ensure that this provision matches up with the jobs that are available now. The working world will need to move to a more flexible model with more equal opportunities for everyone.

The Chancellor of the Exchequer, Rishi Sunak, said:

“Today’s labour market stats make it clear that our unprecedented support measures, including the furlough and self-employed support schemes, are working to safeguard millions of jobs and livelihoods that could otherwise have been lost.

“I’ve always been clear that we can’t protect every job, but through our Plan for Jobs we have a clear plan to protect, support and create jobs to ensure that nobody is left without hope.”

Kirstie Donnelly MBE, CEO at City & Guilds Group, commented: 

“The number of employees on UK payroll has dropped 730,000 since March and, with the furlough scheme set to wind down over the next couple of months this figure is likely to rise further. Meanwhile, students are set to receive their GCSE and A-Level results over the next fortnight, meaning a new wave of young people will be looking to enter further or higher education or the world of work. 

 “As the labour market shrinks, it’s crucial that we take immediate action to ensure that people, especially those most in need, have the opportunity to get the training, skills and experience they need to access employment, and that young people leaving education understand what is a viable route into a job. 

 “We are calling on the Government to urgently redirect existing skills funding to ensure that the budgets currently set aside for further education are being allocated in the right way, with the focus on helping people develop the skills that match the jobs that are available right now, both to keep the economy moving and also to ensure we promote social mobility. There is no more time for discussion; we need to act now to avoid leaving a generation behind.”

Stephen Evans, chief executive, Learning and Work Institute, said; 

“There are now 730,000 fewer people in payroll employment than at the start of the crisis, and 3.4 million people who are out of work and who want a job. While the number of vacancies has re-bounded slightly, there remain fewer opportunities than at any point seen in the last recession.

“There are also signs of worse to come. The Coronavirus Job Retention Scheme has helped prevent millions of job losses. But with the scheme coming to an end in October, we risk seeing a second wave of unemployment, with perhaps more than one million furloughed workers unable to return to their jobs.  

“The Government should look again at extending support for jobs in hard-hit sectors, and it must ramp-up employment and training support for those who may lose their jobs.” 

Louise Deverell-Smith, founder of Daisy Chain, said:

“The latest ONS figures confirm what we already know. The pandemic has taken its toll on the economy and, unfortunately, the jobs market often carries much of the burden during a decline. It’s clear we face a challenging road to recovery ahead, but many businesses in the UK have already shown great creativity, flexibility and extraordinary resilience to overcome turbulent months.

“One undeniable fact is that remote and flexible working arrangements have helped to prevent further job losses and could also be a lifeline when rebuilding the economy. Flexible employment platform Daisy Chain saw employer sign-ups triple in June, and the increase in flexible roles being posted continued through July. It demonstrates a clear shift in approach to working arrangements from employers.

“The pandemic has shown that many 9-5, Monday-Friday office roles could be a thing of the past. Many jobs can and are being done remotely, part time, or with compressed hours, alleviating some of the pressure on certain sectors and creating more job opportunities for others. Jobs and the economy are going to look a lot different in 12 months’ time, and now’s the perfect time to for businesses to get creative with how they approach talented individuals who are now, unfortunately, back on the jobs market.”

Kirstie Mackey, Head of LifeSkills created with Barclays said:

“Many businesses are taking advantage of the furlough scheme and so the full impact of Covid-19 on jobs remains to be seen.

“But it is clear that the impact will be significant and so it is essential that everyone, all generations, across the UK has the right support to develop core skills and access to training that can help them to re-enter the workplace or seek new opportunities.

“Recovery from the impacts of Covid-19 will rely on every individual and business’s ability to develop, adapt or transfer skills as we restart industries and create new opportunities for recovery and growth.”

Reform think tank Director, Charlotte Pickles, said:

“Today’s headline data masks the true extent of the unemployment crisis we’re heading towards. The unemployment rate may be stable, but almost three quarters of a million fewer people are on payroll, the number claiming unemployment benefits has more than doubled and economic inactivity is rising – plus millions remain on furlough.

“At the same time, we have a hiring crisis. Many of the jobs disappearing in sectors such as leisure and hospitality won’t come back. While the Government has pledged serious investment to support young people, they have all but ignored the challenge facing older workers, many of whom will have to switch careers and require support to retrain.

“Ministers should also consider a ‘flextension’ to the furlough scheme. The threat of a second wave and further local lockdowns will damage the economic recovery, simultaneously scrapping the furlough scheme risks a jobs bloodbath in the Autumn. Extending the scheme with greater flexibility, only for those sectors hardest hit, could provide a lifeline for millions.”  

Rebecca McDonald, Senior Economist at the Joseph Rowntree Foundation, said:

“Preventing falling levels of employment turning into a surge in poverty must be a national priority. Today’s figures show at least 730,000 fewer people in work since March. This loss in income means many are likely facing constant, grinding pressure and uncertainty about how to pay their rent, put food on the table or find a new job which provides a path to a good livelihood.

“The latest figures cover a period when the full furlough scheme was still in place and millions were protected from the full force of the economic storm. As furlough is wound down, the Government must live up to its commitment to do whatever it takes to support employers create new good jobs and equip jobseekers with the skills they need to access these opportunities. In the meantime, we must ensure  Universal Credit provides enough timely support so people aren’t pulled into poverty.”

JRF is calling for the Government to:

• Invest in Universal Credit to make it a more effective lifeline for families with children who are having to cut back on essentials, turn to foodbanks or take out unaffordable debt.
• Bring forward investments in targeted support, skills, and retraining schemes, to benefit the groups of workers in sectors most at risk of job losses. This should particularly focus on:
  • Adults over 25 with fewer formal qualifications
  • Women
  • BAME communities
• Go further on its job creation programmes so that they better reflect the scale of risk facing many groups of workers.