Employers urged prepare for unknown impact of COVID-19
The full economic impact of the pandemic will not be known "until the government’s furlough plaster is ripped off", says Rhys Moon, director at outplacement specialist Renovo.
According to the Officer for National Statistics (ONS), 56,000 people in PAYE employment lost their jobs during April 2020.
There were also more than 800,000 fewer payrolled employees in March 2021 than in March 2020.
Combined with the September finish dates of furlough and other government support schemes, Moon warned this employment fall may trigger further, long-awaited labour market challenges that could impact workers and businesses.
In response, Moon has called for businesses to invest in labour force planning and preparation, as it will take another six to 12 months before the effects of the pandemic are fully evident.
“These latest payrolled worker figures illustrate a slow but significant start to the changes we have been expecting in the labour market since the pandemic started.
“Currently, the market is a mixed picture,” explained Moon.
The BBC reported that while job vacancies have increased by 16% and average earnings have risen by 4.5%, 2.7 million people are now applying for job seekers benefits, compared with 1.4 million in March 2020.
Moon said it is difficult to define the long-term impact COVID-19 has had on the labour market, particularly as almost 5 million people are still on furlough, and many are on long-term furlough.
He said: “Employers should take this opportunity to evaluate their current labour situation in a careful manner, preparing for the latter part of 2021.
“Options for workforces include re-skilling, redeploying, restructuring and reducing.”
We are in the calm before a potential storm, said Moon, adding: “Businesses should take this time to be proactive, innovative, and considered in their approach to their workforce’s future.
“Planning is sensible as it’s impossible to tell how large our economic injury is, until furlough is a thing of the past.”
The pandemic’s effect on the UK workforce: