COVID-19 unemployment: what support is needed to get people back to work?
Prior to the COVID-19 pandemic many UK employers struggled to fill job vacancies due to a lack of workers with the right skills. The situation was exacerbated by Brexit, which saw many skilled employees return to their homelands or to other EU member state countries.
Since the pandemic took hold last year unemployment has risen significantly – particularly in the sectors hit hardest by lockdowns, such as retail and hospitality.
According to the Office for National Statistics, the UK unemployment rate for December 2020 to February 2021 during the pandemic – such as the furlough scheme – are removed it is anticipated that the number of people out of work will continue to grow.
Many of these newly unemployed people may need to seek work in other sectors, and this will potentially require training and re-skilling.
So just how acute is the UK’s skills problem? Which sectors are suffering from the biggest shortfall? And what impact is the coronavirus pandemic likely to have on the issue in the short to medium term?
The numbers paint a stark picture about the UK’s lack of skilled workers. Research conducted by recruitment company Search in January this year found that 73% of UK organisations are currently affected by the skills shortage – a third said it was having a significant impact on their business.
According to recent data from The Open University a quarter of organisations have been forced to make redundancies due to COVID-19, with businesses spending £1.2 billion on temporary workers to plug skills gaps.
This is predicted to get worse unless immediate action is taken with the Local Government Association estimating the skills shortage could cost the UK £90 billion a year by 2024.
Though unemployment has worsened due to the pandemic, the crisis of the past year has pushed priorities elsewhere according to Simon Tindall, head of skills and innovation at The Open University.
“There has been a significant rise in both unemployment and underemployment, which coupled with the furloughing of over 11 million people has further widened the ongoing skills gap,” says Tindall.
“For many employers learning and development has simply not been a focus of attention over the last year as businesses fight to survive and adapt to new trading conditions of COVID and Brexit.”
Emma Roberts, head of external affairs at WorldSkills UK, agrees with Tindall’s depressing assessment. “We know that the pandemic has had a massive impact on young people’s education and training, which is why our economic recovery must be skills-led with a real priority on making sure those about to enter the workforce have the high-quality skills that employers need,” she says.
She welcomes the fact that the government has made skills one of its top priorities, but says that to power the recovery, skills supplied by colleges and apprenticeships must match the requirements of expectations of employers.
“Our recent report looking at digital skills in the UK, highlighted a worrying mismatch between supply and demand, with employers stating that their need for advanced digital
skills will grow over the next five years at the same time that the number of young people taking up digital skills courses is on the decline,” says Roberts.
The WorkSkills report she refers to cautioned the UK was hurtling towards a catastrophic digital skills shortage that could have an impact on the growth of the UK’s digital economy.
And it’s not the only sector significant shortage skills appearing in company structures in three to four years’ time, which will be difficult to fill,” adds Lamagat.
This is an issue that the hospitality sector is currently wrestling with. The sector has been one of the worst hit by the pandemic, with more than 350,000 payroll jobs in hotels, restaurants and pubs disappearing since March last year.
“Whilst furlough has helped protect many sector jobs, businesses that have been haemorrhaging cash or accruing debt during enforced enclosures and trading restrictions have been forced to let staff go and were unable to reopen with full teams intact,” says
Kate Nicholls, UKHospitality chief executive. “Some of these workers will have moved to different sectors that have been open and busy over the course of the pandemic.”
Jon Dawson, group director of people development at global hospitality company Lore Group, has also detected this migration of workers to other industry sectors.
“The pandemic has had a significant impact on hospitality and like many HR professionals I speak with on a regular basis within the industry we are all deeply concerned about the longerterm impacts on the industry,” he says.
“It’s anticipated with many hospitality workers having been made redundant and either relocating back to Europe or going into other industries, coupled also with the impacts of Brexit, that the industry will see a significant labour shortage as the country opens up and we will see a ‘war for talent’ within hospitality like we have never seen before.”
Dawson believes that as the UK slowly starts to return to normal and the hospitality sector kicks back into life, there will be an opportunity to attract people who are currently on furlough, or who have been made redundant from other industry sectors and retrain them.
“Those organisations that will prevail will be the ones that have already strong plans in place and a great company culture to not only attract new employees but retain the employees they already have,” he adds.
But while some sectors like hospitality may be well placed to benefit from some workers looking to pivot and shift career direction due to the pandemic, this could have a knock-on effect on the skills shortage in other sectors.
Research published by IT management company NTT Data UK in early May found that 79% of UK employees who are currently on furlough are already considering applying for jobs for which they are over-skilled.
This could see talent drain from one sector to another, which will only serve to exacerbate the nation’s existing skills shortage and will require dramatic intervention by employers and government to arrest the decline.