Employment crashes by biggest amount in over a decade with more redundancies on the horizon
New official figures released by the Office for National Statistics (ONS) have revealed that employment fell by the largest amount since the height of the financial crisis between April and June 2020.
Fuelled by a record crash in self-employed workers, employment from April to June decreased by 220,000 compared to the previous quarter.
According to analysis of the data, those aged 65 years and over were the hardest hit, with a record 161,000 fewer older workers in employment.
Importantly, the survey revealed that throughout the quarter, employment was weakening, however, unemployment was largely unchanged as people were out of work but not currently looking for work.
This is attributed to the government’s furlough scheme, with millions being made temporarily furloughed – according to the ONS, there were approximately 7.5 million furloughed workers in June with 3 million having been on the scheme 3 months and more.
Analysts have warned, however, that as the furlough scheme starts to wind down and companies are required to contribute to the programme from August onwards, unemployment and redundancies will start to increase.
According to early indications data by the ONS into July, the number of staff on employer’s payrolls had fallen by 730,000 since March 2020.
Reviewing the findings of its latest Labour Market Outlook report for the quarter, the Chartered Institute of Personnel Development (CIPD) also highlighted a 50 per cent increase in the number of organisations expecting to cut jobs compared to the spring report, rising from 22 per cent three months ago to 33% for the three months to the end of September.
In addition, twice as many private-sector employers (38 per cent) expect to make redundancies compared to the public sector (16 per cent).
Gerwyn Davies, Senior Labour Market Adviser at the CIPD, commented: “This is the weakest set of data we’ve seen for several years. Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes.”
Last week, the Bank of England predicted the jobless rate, which currently sits at 3.9 per cent, would hit 7.5 per cent at the end of this year.
As well as mounting employment losses, pay also saw a decline revealed the ONS data.
Pay dropped by its largest amount in a decade between April to June, down 1.2 per cent. This has again been attributed to the furlough scheme, which saw furloughed employees receive 80 per cent of their salary, up to £2,500.https://thiis.co.uk/employment-crashes-by-biggest-amount-in-over-a-decade-as-redundancies-expected-on-the-horizon/https://i2.wp.com/thiis.co.uk/wp-content/uploads/2020/08/unemployment-increase.jpg?fit=900%2C629&ssl=1https://i2.wp.com/thiis.co.uk/wp-content/uploads/2020/08/unemployment-increase.jpg?resize=150%2C150&ssl=1Coronavirus NewsCOVID-19 Sector NewsGovernment & Local AuthoritiesNewsroomReports & ResearchSector NewsBank of England,CIPD,Coronavirus Job Retention Scheme,employment,furlough,furlough scheme,Office for National Statistics,redundancy,unemploymentNew official figures released by the Office for National Statistics (ONS) have revealed that employment fell by the largest amount since the height of the financial crisis between April and June 2020. Fuelled by a record crash in self-employed workers, employment from April to June decreased by 220,000 compared to...Calvin BarnettCalvin Barnettcalvin@thiis.co.ukAdministratorTHIIS Magazine