Written by Josh Musominari
As we approach the predicted easing of restrictions that will see many sectors open to operate, we should gain more clarity on the effect of the last 12 months on the labour market in the UK. To recap the restrictions currently recommend/prohibit the operation of non-essential businesses on-premises if it is not reasonable to work remotely meaning numerous businesses have had to suspend operations during this period.
This has presented numerous financial pressures on a variety of sectors despite intervention through grants and economic support packages designed to minimise the effects of this interruption. Consequently, numerous organisations have had to close or consider reductions leading to an employment figure of 75% and a rise in economic inactivity and unemployment.
Despite this, there are good signs of resilience and curbing of those figures. Numerous organisations have adapted their operational procedures and were invited to reopen, meaning the comparative swings seen between the two national lockdowns were less pronounced.
The furlough scheme has been a much-needed lifeline in this period and the recent extension should mean that we continue to maintain this resilience. But as we move into the next stage the focus will be recovery and restoration, with numerous policies aiming towards stimulating the labour market performance. The need to address specific subsets and industries will likely need to be engaged with tailored measures to ensure those most affected can effectively manage the next phase of the national efforts to control the virus.
The tourism and hospitality sectors have been two sectors faced with the most difficult trading restrictions. The evolving nature of the pandemic has meant that airlines and industries linked closest to tourism have been unable to operate in the same fashion. The recent announcements suggest that restrictions on international travel will reduce as the vaccine rollout progresses but questions surrounding how the international community will respond to the UK’s domestic progress will directly affect how quickly full operations can resume. As a consequence, the industries will need support and fiscal measures as restrictions may continue to be in place.
Additionally, with the tiered lockdowns we experienced, there are geographic differences to be considered with some areas experiencing restrictions for the majority of the last 12 months. These areas may find that the effects on their labour market are further impacted than in other areas of the country and need additional stimulation.
Demographically speaking, younger workers have also been affected seriously with the largest rises in unemployment, economic inactivity and redundancies experienced by youth employees. The government has doubled down efforts to address this with the “Kickstart Scheme” for apprenticeships and traineeship incentives in the most recent budgetary announcements. They have also announced extensive increases to the DWP’s careers services and lifelong learning schemes to enable more support for those looking to get back to work.
With all these measures and the vaccination efforts in full swing, economic and consumer confidence are projected to increase and ultimately reduce the time it will take to recover the GDP to pre-pandemic levels. The labour market will need to be supported in specific sectors and time will tell if the measures announced will enable the recovery we all desire. The constraints we have experienced will hopefully advance the desire to spend and enable this recovery. Numerous organisations have expressed their intent to increase hiring in the next financial year and there are good signs to look forward to.
How will the reopening of the economy affect your labour requirements? We are keen to hear your perspective and thoughts on the next 12 months.