Unemployment fears at five-year high: HR community reacts

HR must support employees with job security fears, as concerns of a no-deal Brexit and UK recession grow

People in the UK are more worried about losing their jobs today than they have been at any point over the past five and a half years, according to the latest figures from the ONS.

The Personal and economic well-being in the UK: August 2019 report, released yesterday (12 August), found that confidence in job security is low. People’s expectations for increasing joblessness have been climbing, with the net proportion of people expecting rising unemployment rates in the year ahead reaching 23.1% in the first quarter of 2019, the highest level since the second quarter of 2013. These growing fears come despite UK employment currently standing at the joint-highest rate on record (76.1%), according to the latest Labour market overview published today (13 August).

While all economic wellbeing measures improved in the first quarter of 2019, including household income and wealth, “people’s expectations for the economy for the year ahead are that it will worsen”, the ONS reported.

This falling confidence comes as concerns are mounting that the UK will leave the European Union without a deal, with prime minister Boris Johnson vowing to leave “come what may” by 31 October. Meanwhile separate ONS figures last week, showing that the UK has witnessed the first fall in quarterly GDP in six and a half years, have sparked concerns that the UK could be headed for a recession.

Amanda Mackenzie, chief executive of Business in the Community, said that economic and political uncertainty is causing UK employees to fear for their jobs.

“Prescient Brits have been expecting higher unemployment and for the general economic situation to deteriorate and, following last week’s negative GDP number, they may well be proved right,” she said.

“With a no-deal Brexit looming, the UK economy is arguably at its most crucial juncture for a decade and it’s no surprise people feel less secure about their jobs and the broader economic picture. In 10 weeks or so we could be entering the economic and political unknown and this uncertainty is understandably on people’s radars.”

The report also looked at personal wellbeing in the UK. Personal wellbeing showed very little change, with anxiety remaining stable in the year ending March 2019, the ONS said. The data found that almost one in five (19.8%) UK adults continued to report high levels of anxiety.

While people reported slightly higher happiness ratings, rising from 7.52 to 7.56 out of 10 in the last year, about 4.2 million people continued to report “low” levels of happiness.

Gail Kinman, professor of occupational health psychology at the University of Bedfordshire, told HR magazine that fears over employment and the economy are closely linked to personal wellbeing.

“Studies have found that job insecurity is one of the most profound and widespread workplace fears. It can be a major source of stress and anxiety for individuals and their families,” she said.

HR must create an open and honest environment where employees can voice such concerns, Kinman advised.

“Although HR professionals cannot guarantee that individual jobs – or even organisations themselves – are safe under conditions of such uncertainty, it is important to help people feel secure, happy and confident in their roles. Make sure that employees have the opportunity to voice their concerns and have transparent conversations,” she said.

“Transparent communication is vital, so ensure that people are kept up to date about change and why this has occurred – also ensure that they have some input into the management of change. Job insecurity can make people feel powerless, so consider what you can do to increase their sense of control as much as possible. Also consider what can be done to help them develop – and if necessary update – their skills and improve their employability. It is important to also offer a range of evidence-based initiatives to help people manage stress.”

Kinman said that HR leaders must try to spot the signs of employees’ unemployment fears: “Under conditions of job insecurity staff can often try to show their commitment by working longer and harder. It is important to discourage this and ensure they have sufficient opportunities to recover from work demands, otherwise their health and job performance will suffer – and this is likely to compound their sense of insecurity.”

However, despite the workforce's growing unemployment fears, the UK job outlook appears largely positive, according to Jon Boys, labour market economist at the CIPD.

“Given that economic status is important for wellbeing, and unemployment is at a record low, it’s unsurprising that happiness is higher now than this time last year. Despite a perception of a rise in insecure work, such as zero-hours contracts, the majority of new jobs created have been good quality, full-time roles as our recent report on insecurity made clear,” he told HR magazine.

Yet, Boys said this is not enough to dispel employee concerns.

“The bad news is that people’s expectations for the general economic situation have been trending downward. Experience tells us that a recession comes along about once every decade and last week’s news that GDP fell in the last quarter will have done little to change people’s minds,” he said.

“With people spending the majority of their lives in work, it can have a significant impact on their health and wellbeing. HR teams need to ensure line managers are trained to support and manage people properly, providing as much flexibility as possible to improve employees’ work/life balance and help prevent stress.”

Rebekah Wallis, director of people and corporate responsibility at Ricoh, said that the ONS report highlights the important role HR must play in supporting its workforce with job-related stress.

“It is crucial for HR to reassure and empower employees about their job security in the organisation. One way in which HR can do this is by advocating and executing the communication of the business strategy on an ongoing basis. This helps to engage employees and gives them the foresight and confidence that the business has a robust plan in place for the short, medium and long term,” she told HR magazine.

Wallis explained that there are several ways HR can support employee wellbeing and increase confidence in job security.

“One way… is by facilitating an open management style within the business and two-way communication, in order to help prevent fear and unanswered questions. Listening to your staff empowers them, and if they feel that their point of view is being taken into consideration, they are far more likely to feel valued, secure and happy in their position,” she said.

Creating the right culture is also key, Wallis added: “A positive working culture is critical to success and culture is fundamental to motivation as well as overall satisfaction. But culture change is difficult and time consuming. Creating a culture of optimism cannot be turned on overnight – it takes as much work to implement as any working business strategy.”