New figures estimate that, at the furlough scheme’s end, around one million people are still set to be on the scheme.
Recent research published by think tank The Resolution Foundation suggests the end of the furlough scheme will prompt a “testing period” in the labour market over the coming months.
Since the start of the scheme, a total of 11.6 million jobs have been put on furlough for at least part of the duration of the scheme.
However, the latest ONS data shows that the number of employees on the furlough scheme fell to around 1.4 million in late-August, with 40 per cent of these (around 600,000) fully furloughed.
As such, if figures continue to fall at the same pace, the think tank suggests around one million people could still be on the scheme when it ends this week (at the close of September).
While the majority of these workers will return to their previous jobs, especially people on partial furlough, hundreds of thousands of people could be needing to find new roles from October.
Despite this, the think tank warns that some staff – such as older workers – will be hit particularly hard by this mass search of work to come. In specific, this group face the risk of an early retirement if unable to find work, a trend which has already been growing during the crisis.
In a separate survey, a small sample of over 250 HR professionals analysed by Renovo showed that almost seven in 10 employers (69 per cent) expect to make redundancies over the next year.
Of these companies expecting to make redundancies, over four in five (84 per cent) have employees on furlough.
Chris Parker, Managing Director at Renovo, spoke of the “high correlation between those with employees currently on furlough and high levels of expected redundancies in the next year”.
Dan Tomlinson, Senior Economist at the Resolution Foundation, also reacted to these findings:
After 18 months in which it has supported over 12 million jobs across the UK, the Government’s Job Retention Scheme is finally set to close.
The furlough scheme has been a living standards lifeline during the pandemic. The fact that 1.4 million employees were still on the scheme just one month before it closes shows that our labour market is still far from full-health.
The end of furlough is set to prompt a testing period in the labour market as even more people, particularly older workers, look for new jobs.