UK jobs | Record fall in hiring as COVID-19 'wreaks havoc'

Record fall in hiring as COVID-19 'wreaks havoc'

Hiring activity has fallen to a record low as many employers have imposed recruitment freezes in response to the COVID-19 pandemic, new research has found.

KPMG and REC’s UK Report on Jobs pointed towards a fall in the number of permanent staff appointments and temp billings. This is the sharpest fall recorded in the survey’s 22-year history.

James Stewart, Vice Chair at KPMG, said the survey results illustrate how the coronavirus pandemic is continuing to “wreak havoc on the UK jobs market with a record drop in vacancies and recruitment plans frozen”.

“The uncertainty over the outlook is weighing heavily on the nation – we estimate that as many as 13million jobs are highly affected by the lockdown, representing just over a third of all jobs in the UK.

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“It’s an unprecedented situation for UK business and resilience, then recovery is key to navigating through the crisis. All eyes will also be on the Government’s forthcoming announcement on easing current restrictions so confidence in the jobs market can start to rebuild.”

As the UK grappled to contain the spread of the virus, Prime Minister Boris Johnson enforced a nationwide lockdown which caused the temporary closure of many businesses.

Some businesses furloughed staff under the Government’s Coronavirus Job Retention Scheme (CJRS) due to a lack of work, while others were sadly let go from their roles. These closures contributed to a record fall in overall vacancies.

While there was weaker demand for staff, the survey unearthed that the availability of talent rose at the steepest rate since 2009 amid widespread redundancies.

White Stuff, Airbnb and Uber are just some of the firms that have reportedly laid staff off due to the pandemic.

A recent study by the Institute for Social and Economic Research at the University of Essex warned that more than 6.5million jobs could be lost due to the economic fallout from the UK’s COVID-19 lockdown measures.

The Independent reported that the accommodation and food services sectors are expected to be the worst affected by job losses, while the study indicated that a significant number of jobs in the transport and storage sectors could be at risk too.

While fighting the virus is a top priority, Neil Carberry, Chief Executive of the REC, said that “the strain the lockdown is placing the economy under cannot be sustained indefinitely without very significant and long-lasting effects on unemployment and job creation.

“The good news is that the capacity for our economy to recover quickly is definitely there – but we won’t get back to strong growth instantly when the lockdown eases.

“[The] Government needs to work with businesses to ensure that the support they have offered tapers out as the economy returns to normal, rather than leaving firms facing a cliff-edge and having to cut costs quickly through things like higher redundancies.

“This approach will also allow firms to invest in the future – creating new jobs to drive the economy and help the UK bounce back,” he added.

Pay

KPMG and REC’s study also noted a fall in pay as the current demand for staff weakens.

Permanent starting salaries plummeted at the fastest rate since March 2009, while pay given to temporary staff members slumped to the greatest level since July 2009.

Regions and sector differences

When staff appointments were broken down into regions, permanent staff placement figures fell at record rates, particularly in the North of England.

In addition, the research found that all four English regions witnessed the sharpest drop in the number of temporary billings since the data started to be compiled in October 1997.

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The biggest falls in demand for staff were for temporary and permanent staff in the private sector, yet the public sector also witnessed record declines for both permanent and short-term roles.

Nursing, medical and care work were the only sectors to see high demand for temporary staff during April, while huge falls in demand were recorded for secretarial and clerical roles, as well as within the hotel and catering sectors.

The report was compiled by IHS Markit based on survey responses from 400 UK recruitment and employment consultancies.



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