More than half of those furloughed or out of work are not seeking employment, study finds

Figures highlight the mismatch between skills and labour, experts say, and urge employers to do more to attract talent

Just over one in 10 (11 per cent) workers who are on furlough or not working are looking for a job, according to new research, potentially spelling trouble for those employers struggling to recruit in the wake of the pandemic.

A survey by Indeed has found that more than half (56 per cent) of people out of work are not actively seeking a new job, including two-fifths (41 per cent) of those on furlough.

Among all workers, 71 per cent said they weren’t looking because they expected to return to their pre-pandemic job, and a third plan to hold off looking for a job until more opportunities become available. 

Just under a third (30 per cent) of unemployed people who weren’t urgently looking for work said they have a financial cushion, while almost a fifth (17 per cent) said they could manage because their spouse or partner is still employed. A sixth said their reason for not looking for work was due to Covid-19 fears. 

Among those on furlough, 12 per cent said they were not comfortable with returning to work in person.

According to Indeed, the findings suggested that the lack of urgency among jobseekers to find a new role may be contributing to employers struggling to fill vacancies. This is despite the unemployment rate falling to 4.7 per cent and the number of job postings exceeding pre-pandemic levels. 

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Jack Kennedy, UK economist at Indeed, said with many employers “desperate for staff”, a significant proportion of the workforce appeared to be “surprisingly relaxed” about finding work despite the end of the furlough scheme looming.

“Most are feeling optimistic about returning to their workplace and so are in no rush to find a new job,” he added, but warned that with almost two million people still on the coronavirus job retention scheme, “some may soon learn they will not be going back and will therefore need to start actively searching”.

“The financial cushions enjoyed by some unemployed workers will also eventually erode, and will create a greater sense of urgency among those currently out of work but still happy to sit on the sidelines,” Kennedy said.

“For now, amid a backdrop of robust labour demand and a strong sellers’ market, most people seem to feel they can be choosy about their next job move.”  

Neil Carberry, chief executive at the Recruitment and Employment Confederation (REC) said: “These findings back up what recruiters are telling us – many candidates are reluctant to move jobs at the moment due to continuing uncertainty, and the furlough scheme is also having an effect.”

He added that alongside the labour and skills shortages, which have been a problem for years, this is another “hurdle” for employers, who will have to “improve workforce planning, invest in skills and improve their offer to candidates if they want to hire”.

Stephen Evans, chief executive of the Learning and Work Institute, echoed Carberry’s concerns around the “mismatch” of skills and labour, adding that employers need to think about the best ways to find workers, “whether that’s looking at training and apprenticeships, raising pay, or thinking about how flexible working could attract new talent”.

However, Jon Boys, labour market economist at the CIPD, said the research might not be what it seems as “at any given time, five per cent of workers are actively looking for a new or additional job”.

“At 11 per cent, the rate for those on furlough is double this so there is a fair amount of job seeking going on in the furlough population,” he explained. “Furlough was designed precisely to maintain a match between a person and their job. These workers are technically classed as employed and do have jobs to go back to.”

Boys also said there may be “selection bias” in Indeed’s findings as the furlough scheme started almost 18 months ago and “those most likely to look for a new job may have already done so”. 

"It is normal for unemployed people to take their time over finding a new job. Accepting the first thing that comes along is a risky strategy. The average job tenure is about 8.6 years so it’s worth deliberating over," he added.

And Ann Swain, chief executive of the Association of Professional Staffing Companies (APSCo), said the fact that only a small proportion of furloughed workers are actively looking for another job highlights that the scheme is still working “to some degree”, although the end of furlough will provide a more accurate picture. 

“The main aim of the job retention scheme was to do just that – retain jobs for those firms that are still being impacted by the pandemic, so the hope would be that these organisations welcome their staff back, and this is likely the main driving force behind so few furloughed individuals actively job hunting.”