This month’s ONS report on the UK job market looks at the months of February to April 2020. The report covers the period of the height of the COVID-19 pandemic. The UK had entered lockdown; the government had announced funding for furloughed staff and, as such, the report features several anomalous points of data.
The information will be incredibly useful for recruiters who are planning their next move. We find a lean jobs market with low order volume, coupled with falling wages and reduced hours worked. At the same time, employment and unemployment levels remain largely unchanged. This mixed picture means many recruiters will have to consider new ways of approaching the job market.
The newest set of figures in the report was also the category which presented the most significant change.
The total number of hours worked per week in Britain fell by 94.2 million, representing the single largest reduction in hours in history. It means that Britons worked, in the three months to April 2020, 8.9 per cent fewer hours than the same period in 2019. The total number of weekly hours worked in the quarter was 959.9 million.
Employment data finds the number of people in work largely unchanged from the previous quarter. Employment stood at 76.4 per cent for the three months to April. This is 0.3 per cent higher than the same period twelve months earlier. It is just 0.1 per cent below the all-time highs of the previous quarter.
The resilience of employment numbers suggests that the government-backed scheme for furloughing staff may have helped to cushion the impact of the virus, at least in one respect.
However, as we saw in the previous data set (hours worked) there has been a significant reduction in duties. So although fewer than anticipated have faced redundancy, many will have experienced reduced hours and earnings (see later section).
Unemployment increased during the period of study. However, the data does not expose the horror story that many might have feared.
Unemployment levels increased by 0.1 per cent compared to a year ago, but remained unchanged from the previous quarter. Official unemployment was recorded at 3.9 per cent for the quarter.
Th single greatest change in this month’s data – and the most significant to recruiters – was in total number of vacancies.
There were 476,000 advertised vacancies in the UK from March to May 2020. This is 342,000 fewer than the previous quarter – a drop of 42 per cent.
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For the first time, the report also includes predictive modelling for future months. The experimental data forecasts a further 60 per cent decrease in vacancies in May 2020, compared to March 2020.
British workers also faced the first real-terms decrease in earnings since January 2018.
Figures for the period of study found that real-terms basic pay continued to grow. However, that growth had shrunk to 0.4 per cent. And there was a net decrease in total earnings (which includes bonus pay) by 0.4 per cent. Data found that industries with higher rates of furloughing had impacted earnings most significantly.
Job market trends
The most significant job market trends outlined in this report are those of falling vacancies and hours worked.
The first of these will impact recruiters’ businesses in a direct fashion. The sharp reduction in new job orders poses a serious challenge to agencies and enterprises in already difficult times.
The reduction in hours worked – in part, due to furlough schemes – may have an indirect impact. With many employers clearly keen to retain staff on limited hours, this emerging trend may impact recruiters in several ways. Are fresh job orders offering full hours or reduced scheduling? Are new hires finding themselves being recruited to roles that are already part-furloughed? Secondly, it may impact the nature of available candidates. The fall in hours and earnings may result in an increase in second-income applicants: those looking for a second job on reduced hours to plug gaps in earnings.
Each trend makes matters more difficult for recruiters attempting to go about their work “the old way”. With so many variables at play in each new job order, matching the ideal candidate to the available role presents a set of new challenges.