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UK employment at record high before coronavirus, ONS figures find

21 Apr 2020 By Francis Churchill

But experts warn lockdown measures are likely to ‘sharply reverse’ the country’s labour market growth and predict unemployment will ‘soar’

The UK’s employment rate was at a record high the month before the coronavirus outbreak started to take hold, latest official figures have shown.

The Office for National Statistics (ONS) estimated that in the three months to February 2020, employment was at 76.6 per cent. This was 0.4 percentage points higher than a year earlier and 0.2 percentage points up on the previous quarter.

Gerwyn Davies, senior labour market adviser at the CIPD, called the figures a “poignant reminder” of how well the jobs market was performing before lockdown measures were introduced, and warned that the economic effects of the outbreak would likely undo much of this progress.



“Employment rose very sharply in the three months to February, driven by an increase in the number of young people and women in full-time employment, up by 172,000,” said Davies. “However, employment growth will go into reverse sharply in the coming months, which will hit young people especially hard, as the focus for employers switches to preserving jobs rather than creating them.”

The stats coincide with reports of some of the UK’s biggest employers cancelling or delaying recruitment schemes and internships, including Lloyds Banking Group, HSBC, PwC and BDO. More than a quarter of companies said they anticipated hiring fewer graduates because of the pandemic, according to a survey last month by the Institute of Student Employers.

Davies welcomed the government’s decision last week to extend its job retention scheme to the end of June, but called for it to be made more flexible to enable furloughed staff to work reduced hours. “This change would enable employers to bring back workers from furlough gradually, which is likely to be necessary if lockdown measures are phased out over time. This would give the UK labour market a better chance of recovery once the initial phase of the crisis passes," he said.


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The government’s job retention scheme, which opened for applications yesterday (20 April), allows any employer to apply for cash grants from HMRC to cover 80 per cent of workers’ wages, up to £2,500 a month. The scheme received more than 140,000 applications from employers on its first day.

The Treasury said the system can process up to 450,000 applications an hour. Employers should receive the money within six working days of making an application, it said.

Many users, however, reported a range of inconsistencies and technical problems. These included the website crashing, an online calculator returning incorrect results, and the portal not allowing overlapping furlough periods for different staff within the same month. Applicants also reported an incorrect reference to a real time information cut-off date of 16 March rather than 19 March, but this has now been corrected.

Today’s figures from the ONS also revealed that both vacancies and pay had started to drop in the first three months of the year. The three months between January and the start of March saw 52,000 vacancies fewer than the previous year – making it the tenth consecutive annual decrease.

Earnings growth also slowed from a peak of 2 per cent in the three months to June 2019 to 1.2 per cent in the three months to February.

Lee Biggins, founder and CEO of CV-Library, said these statistics showed the UK labour market was “already nervous because of Brexit and the start of Covid-19 social distancing measures”.

"What we will see in the next few months is a real shift, whereby candidates won't hold as much power as they have done in recent years,” said Biggins, adding that he expected unemployment to “soar”. “Our own data shows that vacancies fell by 4.1 per cent in Q1 2020 and this is likely to continue into the next quarter."

Separate figures, released yesterday (20 April) by the Institute for Employment Studies (IES), found job vacancies fell 42 per cent since lockdown started last month.

In a briefing paper, the research centre said that while the hospitality and catering sector had seen the largest fall in vacancies (70 per cent), the impact was not limited to the areas of the economy hardest hit by the shutdown. Vacancies had also fallen by more than 60 per cent in sales, administration, public relations, energy and charity work, among other sectors.

HR and recruitment was listed as one of the areas seeing vacancies drop by more than 60 per cent.

By contrast, vacancies only fell slightly in healthcare, and have risen in social work and cleaning. These three sectors alone now account for a quarter of all vacancies, compared with just one in seven a month ago, the paper said.

Tony Wilson, director of IES, said the figures painted a “stark” picture of how the lockdown had affected the jobs market. “These impacts are far greater than anything we’ve seen before and are affecting all places and nearly all parts of the economy,” he said.

But Wilson added there were still more than half a million job openings, particularly in key areas such as health and social care. “We need to keep working to support those who are out of work and looking for work to find those jobs,” he said.

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