Government data for the UK jobs market shows the impact of lockdown on the economy, with a spike in redundancies and low employment shaping the market. However, there are some signs of recovery, as hours worked and vacancies both continued to rise.
Vacancies have continued the gradual recovery seen in last month’s report. However, sales opportunities for recruiters remain substantially below pre-pandemic levels.
Total vacancies broke half a million at 525,000 between August and October 2020. This works out at 146,000 more than the previous quarter. However, it is also 278,000 fewer than the same period in 2019.
The 34.6 per cent contraction of the jobs market is the key statistic for recruiters this month. It is likely to underpin the short term sales strategies and targeting for many agencies.
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Data projections show an overall decline in employment rates across all population demographics.
The job market data for July to September found that the overall employment rate stood at 75.3 per cent. This represents a 0.6 per cent decrease in employment over the previous quarter. Across a longer period of study, this is also a 0.8 per cent drop on the same period of 2019. The comparison across these time frames would suggest that the current month’s report is the flashpoint for redundancies.
Further evidence of the drop in employment is found in the shrinking payroll reports and PAYE receipts. The UK payroll contracted by 782,000 since March 2020, when the effects of the pandemic were initially felt.
Official estimates find that there were 28.2 million payrolled employees in the period of study. That is a 2.6 fall over the last twelve months. Payroll contracted by 0.1 per cent on the previous quarter – a drop of around 33,000 people.
Unemployment has increased by 318,000 over the last twelve months. The majority of this has occurred within the period of the current report. The November data finds 243,000 additional unemployed individuals compared to the previous quarter.
This puts the overall UK unemployment rate at 4.8 per cent. This is 0.7 per cent higher than the previous quarter, and is the result of record high rates of redundancy. Both net quarterly redundancies (314,000) and the rate of increase (181,000) set new all-time highs for the UK job market.
ONS projections suggest that this figure represents a steady increase in redundancies throughout the full period of study. That is to say, there was no brief window which acted as a flashpoint for redundancies; they increased steadily throughout.
Total unemployment was estimated at 1.62 million people.
• Looking for older data? Find past months’ reports here.
Productivity continued to recover perhaps more rapidly than other job market data sets. Hours worked have returned to levels which are comparable again to recent times. Total hours worked was estimated at 925 million, which rises above output for June 2011. In fact, hours worked increased by 9.9 per cent over the previous quarter.
UK job market conditions remain incredibly tough for the nation’s recruiters. A contraction of sales opportunities – demonstrated by the one-third drop in vacancies – could present a significant obstacle for many firms. The increase in available skills is likewise tempered by the clear aversion to taking on payroll liabilities at present. The quarterly surge in redundancies will present a double challenge for recruiters: more candidates to process, but fewer opportunities to make placements.
With tough times ahead for many in the UK jobs market, eBoss is extending our 20% discount on service rates for recruiters who are starting out or returning to recruitment until the end of 2020. You can read more about our special Restartup offers here.
You can download the complete ONS job market data report as a pdf document here.