Working hours and UK vacancies have dropped to the lowest level ever since records began.
This is according to the Office for National Statistics (ONS) who reported that the number of weekly working hours has dropped by 16.7 per cent, which is the largest decrease ever since records began in 1971. Also, vacancies in April to June 2020 are also at their lowest levels since the survey began in 2001, currently, there are 333,000 vacancies which is 23 per cent lower than the previous record low in 2009.
The number of employees on payrolls decreased by 649,000 between March and June. The unemployment rate has not changed, however, there are now 47,000 more young people out of a job compared to last year.
As the ONS said:
The estimated number of people unemployed aged 16 to 24 years increased by 47,000 on the year, while other age groups remained steady.
There is a large proportion of young people in sectors hit badly by COVID-19, such as hospitality and retail. There have been 276,000 new young claimants to unemployment benefits between March and June.
The Resolution Foundation, a British think tank, has said a third of 18-24-year-old employees have either lost their job or been furloughed compared to a sixth of adults.
It has been predicted that the full impact on employment levels will not be felt until the Coronavirus Job Retention Scheme (CJRS) ends in October.
Lee Biggins, founder and CEO, of CV-Library, said:
Employment has dropped on the quarter and while it’s only by a small amount, we know that the Government’s Job Retention Scheme has been a saving grace for many. This is echoed by the fact that hours worked has fallen by 23 per cent, which is more indicative of the current state of the job market. Alongside this, the fact that less people are actively looking for work is an interesting one.
However, there has been a significant drop in vacancies, meaning the opportunities haven’t necessarily been there. We are starting to see numbers pick back up and last week was a record week for new jobs. However, the sad truth is that unemployment could, and will most likely, rise sharply in early 2021, unless more businesses are able to create new employment opportunities for everyone – not just young people.
Still, the ONS figures have been questioned as the unemployment rate did not change. People believe that staff on furlough who will be let go once the scheme finishes, are hiding the true extent of unemployment levels in the UK.
Neil Carberry, CEO of the Recruitment and Employment Confederation (REC) seems positive about the various government schemes but states we are far from out of the woods. Mr Carberry said:
Stable unemployment to May and a big drop in hours worked shows that the Job Retention Scheme worked. But the June payroll data shows that 650,000 people have already lost their jobs – a number that will rise as firms make decisions about the amount of staff they now need, given the state of their markets. But we must remember that the British economy is always creating jobs. Our Jobs Recovery Tracker suggests that job ad numbers have been rising since early June.
In the next few months the key will be helping firms retain staff as furlough ends – that’s why the REC has called for a targeted cut in National Insurance – and helping those who do lose their job to find new work quickly. The recruitment industry welcomed the Chancellor’s plans on this last week. Recruiters are ready to help get people into work and keep unemployment down as much as possible.
Kirstie Donnelly MBE, CEO at City & Guilds Group, a global skills developer said:
With unemployment already on the rise, and set to skyrocket to as many as 4 million people by the end of the year, it’s critical that we act now and use all the ammunition available to provide training and jobs lifelines to those most in need.
The interventions outlined by the Chancellor in last week’s Summer Statement are a step in the right direction, but there is still much more that can be done. As well as supporting young people, we need to ensure that people of all ages, particularly those from lower socio-economic groups, or people displaced from industries badly impacted by the pandemic have the opportunities to gain the new skills they need to access meaningful employment.