Redundancies soar and unemployment rises while millions go back to work – “Tale of two crises”

UK labour market: September 2020 @ONS 

The ONS figures showed a 695,000 drop in workers on payroll from March to August this year. Commenting on today’s (15 Sept) labour market figures,

David Phillips, Managing Director – City & Guilds and ILM, commented: 

“The number of people on the UK payroll has fallen by 695,000 between March and August with many young people noted to have been affected. Government has quite rightly put several interventions in place to support younger people back into the workplace, however, very little has been put into place to support all of the other workers that will also be badly impacted. By the end of the year, many of the newly unemployed are expected to be over the age of 25 with a quarter of a million of over-50s predicted to fall permanently out of work after being made redundant.

“We are calling on the UK Government to provide greater support to workers over the age of 25 to stem unemployment. As the end of the furlough scheme approaches, we need to ensure that we’re taking all the steps possible to help ensure that ALL of those most impacted by the pandemic have opportunities available to them, whether via employment, apprenticeships, careers advice, or training and reskilling“.

Chancellor of the Exchequer, Rishi Sunak, said:

“This is a difficult time for many as the pandemic continues to have a profound impact on people’s jobs and livelihoods. That’s why protecting jobs and helping people back into work continues to be my number one priority.

“We’ve taken decisive action throughout this crisis, introducing the furlough scheme and outlining a comprehensive Plan for Jobs to support, protect and create opportunities. And we’ll continue to do that through the autumn, including by supporting people back to work through policies such as our Job Retention Bonus worth up to £9bn.” 

IES Director Tony Wilson said:

“Today’s figures tell a tale of two crises. On the one hand July saw at least two million people return to work from furlough and vacancies continue to slowly recover.  But at the same time, redundancies have risen by nearly 50% in three months to their highest since 2012, while the number of young people in employment fell by more than at any point since 2009.  Taken together, these figures show that the ending of lockdown has marked really just the beginning of what may be a prolonged labour market shock.  Nonetheless there are some positive signs in today’s data, with employment continuing to hold up overall while the number of people withdrawing from the labour market entirely has fallen back.  Looking ahead though, if we want to avoid a rapid rise in unemployment over the next year or so then it is clear that we will need more measures to support future jobs growth, as well as getting in place quickly the support announced in the Plan for Jobs this summer.”

Kirstie Mackey, Head of LifeSkills created with Barclays said:

“As the end of the furlough scheme draws nearer, we are beginning to see the full impact Covid-19 has had on people’s jobs. It will be essential going forward that people of all ages and abilities have access to training and are able to explore and develop their core skills, in order to get back into meaningful work.”

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

“Behind the headlines, there are clear warning signs of trouble ahead: 695,000 fewer people are in payroll employment than at the start of the crisis, redundancies are now rising, and 3.4 million people are out of work and want a job.”

“We may be in the eye of the storm, with worse to come. The Coronavirus Job Retention Scheme has protected jobs and the partial reopening of the economy and Eat Out To Help Out scheme provided a boost. But with around three million workers still furloughed, the end of the furlough scheme in October could see a second wave of unemployment. 

 “We need targeted support for jobs in hard-hit sectors, and to further ramp-up employment and training support for those out of work.”  

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

“This morning’s ONS figures continue to paint a bleak picture of the UK’s jobs market. With this being the first month of data showing the impact of the government scaling back its Job Retention scheme, it’s clear the world of work has and continues to go through a period of great change that was unimaginable at the start of 2020.

“Businesses and workers have had to be incredibly creative and resilient during this period. The move to flexible working arrangements and working from home has allowed many businesses to survive and many workers remain in employment. As we move into the autumn, flexible working and working from home arrangements are continuing to cement themselves as the norm throughout the UK and will be crucial to maintaining the recent economic recovery.  As a result, Daisy Chain has seen a 40% year-on-year increase in employers signing up to offer such roles.

“With children returning to the classroom, this will have an additional effect on the UK labour market. It’s vital businesses continue to open their doors to working parents who remain an important part of our workforce but who have been among the hardest hit by the pandemic. Offering flexibility and government support will enable many workers, especially those with children, to keep their jobs or return to employment. The jobs market is continuing to change throughout the UK and it’s the businesses that react and adapt to these changes that will succeed.” 

Rob Alder, Head of Business Development at AAT, said:  

“The impact of Covid-19 has acted as an accelerator for important career decisions, with many people across a vast spectrum of industries facing the prospect of losing their jobs, and in some cases seeking employment in more secure sectors.  

“This backs up what we’ve seen recently, with nearly one in three people who’ve contacted AAT about our accounting and bookkeeping qualifications telling us that they were looking for a career change into the finance industry. 

“And while a significant chunk of this is due to people losing their job, with many using their redundancy money to fund their studies, others are viewing accountancy either as a more secure career path, or are hoping to gain new finance skills to improving their chances of employability.” 

 James Reed, Chairman of REED, said:

“In May, I predicted the UK was facing a tsunami of job losses when the furlough scheme ends, and today’s ONS figures suggest the wave is set to crash through the economy this autumn. 

“Although these statistics will cause concern, now is not the time to panic and extend the furlough scheme. It’s time for the country to move on. Businesses need to level with their furloughed staff about their future as soon as they are able to. People are facing uncertainty over whether their jobs will exist once the furlough scheme winds down, and are in need of assurances either way. They must be allowed to move on, learn new skills, and begin searching for a new employer.

“The good news is that job opportunities are remerging. Over 128,000 new jobs were added onto reed.co.uk in August – a 7.5% month-on-month increase – and opportunities increased in nearly all the sectors featured on the site. 

“Business leaders should also remember that this is a fantastic time to hire. There is an abundance of talent available, with many being able to start immediately. Despite these uncertain times, some businesses will see an opportunity to invest in people and take advantage of this situation.  The forward thinking can hire talent that would not normally be available.”

A spokesperson for Impetus, a charity that supports disadvantaged young people, said:

“The huge fall in employment for 16-24 year olds is the latest sign of the jobs crisis facing young people. Young people are 2.5 times more likely to be employed in the ‘shut down’ sectors and, when they do fall out of work and education, 75% are likely to remain disengaged for the long term – which means we must act fast.

“Initiatives announced by the Chancellor, like the Kickstart Scheme, aren’t yet up and running and more are needed. The longer young people are out of the labour market, the more likely they are to experience future challenges. Today’s statistics show that further, bold measures are needed in the Budget and Spending Review to tackle youth unemployment.”

Dave Innes, Head of Economics at the Joseph Rowntree Foundation, said: