Recruiters praise furlough lifeline as job losses spike
By Dawn Gibson
Recruitment industry leaders have praised the government’s extended furlough as a vital lifeline to UK businesses as new job market data shows redundancies have reached a record high.
However, despite widespread expectation that job losses will continue to climb dramatically, recruiters see a glimmer of optimism ahead due to a hiring resurgence.
Unemployment in the UK rose to 4.8% in the three months to September, according to the latest update from the Office for National Statistics, with young people among the worst affected.
Redundancies soared to a record 314,000, an increase of a record 181,000 on the quarter, reflecting how many companies made employees redundant as they prepared for the end of the furlough scheme, originally slated to finish at the end of October.
The government’s decision to extend furlough until the end of March, announced as England went into its second lockdown, is clearly too late for many workers. However, industry bodies have widely backed the extension as a necessary initiative to support workers trying to hang on to their jobs in the worst employment market for decades.
Andrew Hunter, Co-founder of Adzuna, comments: “Since lockdown 2.0 was announced, we’ve already seen a stalling in the hiring recovery across the UK. Weekly job ads have stayed broadly flat, ending seven weeks of steady improvements throughout the autumn.
“We welcome the recent extension to furlough, particularly to protect workers in sectors like hospitality and catering that will now be closed down entirely for the coming weeks. But there is a danger that the prolonged period of support has allowed some failing businesses to limp through and that...redundancies will spike when this support is removed. This may cause a surge in competition for jobs. As much as possible, clear policies and timelines from the government are still needed to restore employer confidence and help stimulate hiring.”
REED Chairman James Reed spoke publicly in September against extending the furlough. However, the second lockdown has changed his stance. “Given the latest lockdown restrictions, it’s clear support from the government was needed to stave off mass redundancies – the extension of the furlough scheme to March is welcome and will help companies and individuals manage this transition,” he says.
Despite the gloomy picture painted by the latest ONS data, Reed believes there are signs the UK economy is turning a corner towards job growth, pointing to the posting of 162,000 new jobs on the employment agency’s website in October, a 15% increase on September.
“The strong GDP resurgence reported in Q3 translated into jobs over autumn and the second lockdown hasn’t yet had the same negative effect as the first,” he notes. “On the REED website last week, we saw the second highest number of new jobs posted since the pandemic began in March, aided by a rise in seasonal job vacancies.
“The jobs market over the past nine months has gone through a storm of biblical proportions, but the outlook for the new year is sunny. I expect a rapid recovery in the labour market in 2021 driven by improved testing, improved treatment and potentially a new vaccine which would make future lockdowns unnecessary.”
Paul Naha-Biswas, CEO and Founder at recruitment tech platform Sixley, also saw some positive signs. “The UK economy bounced back from the first lockdown with significant growth in Q3 and there’s hope it can do so again in December, especially with further government support thanks to the extension of the furlough scheme,” he says.
“We must be ready to approach recruitment in different ways when restrictions ease and businesses reopen. We should take collective responsibility by looking out for job opportunities and sharing them with our network. Recommending contacts for roles can help them stand out in a crowded space and can reduce the investment of time and money for businesses.
“Never before has the pool of talent available to businesses been so strong and diverse, and those businesses who show the most dynamism in recruitment will benefit the most in the short and long term.”
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