New data released by the Office for National Statistics (ONS) reports on COVID-19’s impact on the labour market, specifically the number of redundancies, vacancies and unemployment in the UK. 

A new report released by the ONS finds that the number of redundancies in the UK has hit an all-time high, a testament to the impact of COVID-19 on the labour market. However, the number of vacancies are beginning to recover although are still currently under the level seen prior to the pandemic.

The research shows that since February, the number of payroll employees has fallen by around 819,000. However, the research does acknowledge that this number fell significantly more at the start of the pandemic.

In addition, the number of redundancies made reached a record-high level by reaching 370,000 between August to October – perhaps in anticipation of the Coronavirus Job Retention Scheme coming to an end as was originally planned in November. However, in October, there was a slight decrease in the amount of people made redundant.

Men were significantly impacted by COVID-19’s effect on the labour market. Between August and October 2020, the estimated employment rate for men was 78.4 per cent which was 1.9 percentage points down from the previous year and 1.1 percentage points down on the quarter.

This was in comparison to the employment rate for women during this same time which stood at 72.1 per cent. This decrease was less severe that previous statistics, with it being 0.9 percentage points down on the same period last year.

Promisingly, the number of vacancies has increased in comparison to the previous quarter although it is still down in comparison to pre-pandemic figures. ONS statistics show that there were 547,000 vacancies in the UK in September to November 2020. Although this is 251,000 fewer vacancies than a year ago, it is 110,000 more than the previous quarter.

Gerwyn Davies, Senior Labour Market Adviser for the CIPD, said:

Even the most optimistic forecasters would not have expected the economy to have generated a record high number of full-time employees at this stage of the economic cycle.

This is due to growth in public sector employment and the series of targeted government measures that have helped preserve jobs against the backdrop of a flexible labour market.

At the same time, pain is still being inflicted on significant parts of the workforce, especially young male jobseekers and the self-employed. And the worry is that the record increase in redundancies will add fuel to the rising jobless count in the coming months.

The government should significantly raise public skills investment to help upskill or retrain staff in sectors hardest hit by the pandemic and for those who have been made redundant during this period.

Neil Carberry, Chief Executive of the Recruitment and Employment Confederation said:

Today’s ONS figures confirm what REC research is telling us – 2020 has been a tough year, but there are reasons to be hopeful as we approach 2021. The record increase in total hours worked is a positive and the REC’s Jobs Recovery Tracker measured 1.4 million active job postings at the start of December, a new high for the year. With the vaccine being rolled out, it’s likely a recovery will take place in 2021.

While more jobs are now being advertised, the trend is not yet enough to offset record redundancies, hitting, 370,000 in the three months to October. This is the main driver of rising unemployment at the moment. Action must be taken now to stimulate job creation and retention – for example by reducing employers’ National Insurance contributions, the biggest tax on business. This will help struggling businesses retain staff while encouraging those which need extra capacity to hire more.

We now have just 16 days until the Brexit transition period ends. Without a deal, businesses face barriers to trade and disruption just as they are starting to recover from the pandemic. Every effort must be made now to secure a deal in the final few days so businesses can continue to trade, especially in services which makes up 80 per cent of our economy.

*These ONS statistics were taken from the Labour Market Overview UK: December 2020.