AUS
NZ
UK
CA
USA
IND
Summary
- There was an almost complete freeze in the hiring of white collared jobs during the lockdown, despite some sectors remaining less badly affected by the pandemic.
- Various sectors are witnessing a high job creation in the recent past, who have not been very badly affected by the pandemic, raising the concerns of an asymmetric recovery.
- There are increasing concerns among policymakers and economists in the country, that the employment situation in the country could turn towards the worse when the furloughing scheme is withdrawn.
As per a research conducted by a major carrier networking portal and jobs search engine LinkedIn in the United Kingdom, job creation across several key industries have been asymmetric. The data collated by the portal showed that white-collared job creation in the country has become sluggish after the outbreak of the pandemic. Most of these businesses who provide services to other industry verticals have been witnessing a sluggish uptake of business as their client businesses are also suffering. These businesses who also did not see many redundancies during the lockdown, as they were able to send much of their staff to work from home, are currently struggling to scale up their businesses to full capacity. There are, however, increasing concerns now, that with an increased risk to a spike in infection rates in the winter months and the withdrawal in the furloughing scheme may put further downward pressure on job creation in these industries.
What hiring rate disparity is being observed among different sectors?
The research conducted by LinkedIn showed that industries like software, legal, corporate services, media, and IT are the ones that are experiencing the most sluggish job creation. In comparison, jobs in industries like transport, logistics have seen a steep rise on account of the boom in online retailing in the recent past. As per the social networking portal employment creation in software and IT industries were down nine per cent year on year, finance and legal jobs were down by nearly ten per cent each, while employment creation in the media industry was down by 17 per cent over last year. The worst performing sectors, however, on this front were the entertainment and recreation and travel industries which have seen a shortfall in job creation by 30 per cent and 31 per cent, respectively. On the other hand, transport and logistics have seen a job growth rate of 18 per cent year on year, and healthcare and construction sectors have witnessed a growth of 12 per cent and 9 per cent, respectively. It is worth noting here that most forecasters in the country have predicted that unemployment rates in the country would fall sharply during the fourth quarter of the year to 8.3 per cent compared to 3.9 per cent recorded at the end of the second quarter.
How have some of these sectors performed during the lockdown?
The Online retailing sector was one of the best performer during the lockdown. This sector which saw a growth of nearly a third during this time saw the maximum number of job creation in the country in the past two quarters. Industries who are close associates of online retail, like line delivery service providing companies also saw a similar boom in job creation as they also invested significantly in expanding their capacities to service this increased flow in the business. Companies providing IT support, fintech, and cybersecurity services also saw a significant increase in their business activity levels as online transaction levels increased sharply, and more and more people started to work from their homes.
The housing construction sector, which saw its activity levels plummet during the lockdown saw a sharp increase in its business activity after the reopening. The industry actually went into an expansion mode in the month of June whereas every other industry was trying to claw back to its pre-pandemic levels. On the same time, some of the most affected industries like travel and touring have sounded warning signals that they are facing survivability crisis and require immediate support action to boost business activity and protect existing jobs.
Likely cause of underperformance of these industries and is there any timeline of their recovery?
Most of the industries which are witnessing a slow job creation provide their services to other industries. The uncertain business environment has made most of the industries in the country apprehensive, and they are very conservative in their expansion plans. The sluggish uptake in general business activity levels thus is also having its effect on the service industries.
A rapid improvement in the business environment in the country would also increase the employment creation potential of businesses who create white-collar jobs. It would take some time for the business environment in the country to come back full steam, as people slowly and steadily brave the odds and come out of their houses and join back to work. If the threat of the resurgence of the pandemic during the winter months does not play out as badly as some are predicting, then we could see a much sharper job creation scenario in the near future.
Conclusion
The asymmetric recovery of different sectors is responsible for increasing the risk levels in the entire economy. The threat of an increase in the unemployment rates in the country post the withdrawal of the furloughing scheme could also adversely impact the white-collar job market in the country as it could lead to a deterioration of the economic conditions in the country. The availability of the coronavirus vaccine and the progressive inoculations of more and more people would provide considerable support to the job sector as companies would be willing to hire more people as the social distancing measures ease.
The continuing threat of the pandemic is currently the biggest impediment in the recovery of the economy. The NHS, despite working hard for nearly five months now, is struggling with this healthcare threat. For the job markets to improve in the country, it is important that the confidence of the people regarding their safety and wellbeing be brought back.
