Published Monday 13th July 2020
Slowly but surely, the UK economy is waking from its forced hibernation into a new reality. While some of us look forward to a hopeful future, many are still left looking back at the damage left behind.
There are increasing hopes that the UK will recover from the recession caused by COVID-19 at a quicker rate than seen in 2008. However, there are growing questions around its impact on employment, as jobs are lost and new opportunities need to be created.
Looming UK Employment Concerns
When the coronavirus pandemic forced widespread lockdown in March, the UK government was quick to lend its support to businesses who tried to keep hold of staff.
Initially, the UK Government paid 80% of monthly wages for furloughed staff up to a limit of £2,500. Up to the end of June, the furlough scheme cost the UK Government over £25 billion. However, throughout this summer, the rules are changing slightly, as they seek to keep control of spiralling economic costs.
While the furlough scheme has been resoundingly well-received, many analysts have highlighted the short-term nature of the solution. As the project begins its wind-down towards closure in October, the businesses that are still unable to fully open and recover in this COVID-19 landscape are struggling to retain staff.
Unemployment has already sharply increased this year. However, there are fears that as the furlough scheme closes, the number of unemployed could rise further. Some estimates state that total unemployment could surpass the 3.3 million peak hit in the 1980s under Margaret Thatcher.
There are also huge concerns about the demographics impacted, with notable questions surrounding Generation Z; those at the end of the educational system, preparing to move into careers that could transform during this unprecedented crisis.
Fresh Thinking for New Employment Problems
Many economists believe that, along with a second coronavirus wave, a surge in long-term unemployment is one of the highest risks to economic recovery. In these remarkable times, a new, more dynamic approach may be required to fixing this part of the COVID puzzle.
Much was made last year about UK education’s need to close the skills gap. Given the disproportionate impact of COVID-19 on low-skilled work, that education upgrade is needed now more than ever.
The UK Government has recently announced a £111 million training scheme, designed to mitigate the impact of this pandemic on young people by allowing them to re-train in a new sector.
The problem in the UK goes beyond merely having many people out of work, however. Reports suggest that actual job vacancies are falling at the same time as employment levels, while hiring intentions in many sectors are also hitting record lows.
To improve the UK’s employment prospects, the government need to kick the broader labour market back into action. This requirement is perhaps the reason why Chancellor Rishi Sunak is looking to get creative with the economy as a whole.
Ideas such as £500 spending vouchers and VAT cuts have been reported, as the government seeks to jump-start the UK economy, hoping everything else will fall into place. Broader economic ambitions, such as those geared towards creating a greener economy, may also support the creation of new job markets.
However, the employment picture going forward is hugely uncertain, and more specific plans must be created to ensure the issue doesn’t hold any potential recovery back.
Creating a Long-Term Employment Strategy
For businesses across various industries, managing all aspects of the everyday running of companies is increasingly difficult in these uncertain times. Here at Expense Reduction Analysts, we can help create corporate cost savings for your business through effective, long-term supply chain optimisation. Our specialists have experience in all areas of business management, including professional services, and can help to save you money going forward.
If you would like to see how we can help your business manage these uncertain times, why not get in contact with our professional team today?