AUS
NZ
UK
CA
USA
IND
Summary
- It is the first time since February 2020 that the businesses have been positive on creating jobs
- There are many businesses who have been on a hiring spree, Hermes announced plans to create more than 10 thousand jobs in the UK
- Most of the businesses across the UK have recommenced operations and the outlook for the overall economy has improved
Although the wider job market looks gloomy, businesses in the UK are expected to create more jobs as they gather confidence after seeing through the unprecedented crisis. According to a survey conducted by REC (Recruitment & Employment Confederation), employers are expected to make investments and hiring decisions as lockdown eases. This is the first time since February 2020 that the businesses have been positive in creating jobs.
The employers’ confidence in making investments and hiring decisions rose from a scale of minus 9 in June to a level of 4 (positive) in the first half of July, according to the survey conducted by REC. This can be attributed to the fact that most of the businesses across the UK have recommenced operations and the outlook for the overall economy has improved. However, the IMF (International Monetary Fund) had earlier forecasted a shrinkage of UK’s economy by 3.7 per cent and projected a 10.2 per cent contraction in GDP (gross domestic product) for the fiscal year 2020. There are still some systematic risks involved, with soaring debt levels to an all-time high in relation to GDP across the United Kingdom.
Also read: UK witnesses sharpest contraction in demand for labour during April
Recently, parcel delivery firm, Hermes announced plans to create more than 10 thousand jobs in the UK because of a shift in consumer behaviour during the unprecedented crisis. British retailer, Kingfisher Plc (LON:KGF) announced plans to hire nearly 2 thousand workers in the UK in the upcoming months.
Most of the businesses recommenced operations between June and July. According to REC, businesses in the UK are expected to hire more permanent employees in the upcoming months in comparison to June. There was a slight uptick in the job market during the last week of June, the total number of job postings in the UK was close to 1 million.
Travel & Leisure has been one of the most affected sectors due to the unprecedented crisis. As most of the businesses in the battered sector planned to reopen, there was a surge in demand for Bar staff, waiters, and waitresses. Similarly, a lot of construction sites have recommenced operations with enhanced security guidelines. The sector witnessed increased demand for glaziers, bricklayers, and roofers. According to the release by REC, job postings increased to 1.25 million by mid of July. IT professionals and Graphic designers’ jobs were in demand during the month.
Also read: UK Witnesses Spike in IT Job Advertisements with The Ease in Lockdown
Although, with improvement in overall outlook, the confidence level of employers has been rising month-on-month, some of the employers are still gloomy about the wider outlook of the economy. Several businesses are expected to consolidate and might also collapse into administration due to the economic impact of coronavirus pandemic.
The flip side of the coin is that the businesses which have survived through the unprecedented crisis are now seeking cost reduction measures and restructuring.
For instance, British retailer, Tesco Plc (LON: TSCO) recently axed contract cleaners in nearly 2,000 stores as a cost reduction measure. Store staff would have to take care of the maintenance and store cleaning activities. The engineering firm, Dyson announced nearly 600 job redundancies in the UK due to the economic impact of the novel coronavirus as a cost-cutting measure.
In addition, businesses have been accused of paying lower compensation to the workforce. According to some media reports, Sports Direct has been reportedly found paying less wages than the minimum stipulated wage. The job market and working environment have worsened due to the economic impact of the novel coronavirus. In addition, the working environment has worsened in recent times as the staff are not allowed to leave the premises during breaks.
The outbreak of the novel coronavirus has wreaked havoc on the economic activities in the United Kingdom. The deadly pandemic has not only dented the economy but has also caused severe damage in terms of the human cost. More than 45 thousand people have died in the UK till date due to coronavirus pandemic, according to the World Health Organisation.
Impact of Covid-19 on the job market
When the pandemic was at the peak, the British government announced the imposition of lockdown to curb the spread of the deadly virus. Till date no proven cure of this deadly virus is available, however, according to some media report some of the drug-makers are quite close to making a breakthrough achievement.
In the wake of novel coronavirus, people were asked to stay indoors and were encouraged to work remotely. However, the concept of remote working cannot be implemented in all the sectors. Therefore, the market witnessed a lot of job redundancies and furloughs. The businesses such as pubs, restaurants, bars and other high-street retail were the worst affected sectors as the footfall of the customers declined drastically and were asked to shut shops eventually due to lockdown. The businesses were trying to preserve more and more cash to stay afloat during the coronavirus crisis. The British government though had announced job retention scheme (JRS) along with other stimulus packages to help businesses stay afloat.
Most of the businesses, primarily in the manufacturing, retail, and travel & leisure space furloughed their employees. Nearly 80 per cent of their wages were being paid by the government to the employer to safeguard the job losses. However, the government would gradually discontinue this scheme, given the rising amount of debt in the economy. In addition, there is no surety whether all the furloughed employees would be called back to work, given the prevalent state of the economy.
Also read: Doors open for New Employees as the UK Economy Forges a Path to Recovery
During the lockdown induced by the coronavirus pandemic, British retailers went on a hiring spree. When most of the sectors were witnessing major job redundancies as they came to a screeching halt, Tesco, Sainsbury, Asda, and other major retailers were hiring employees to cater to the unprecedented surge in online orders for essentials.
Nearly 17 per cent of the employers in the UK have laid off employees on the year till date. It has been a sigh of relief for people to see a rise in employer’s confidence as the UK is believed to have passed its peak with respect to the novel coronavirus. The situation is expected to improve in the times to come. The overall outlook for the economy still seems gloomy with respect to the recent surge in coronavirus infections in Leicester and the looming concern of the no-deal Brexit.
There is a ray of hope for the job seekers as some of the businesses intend to hire people. The government is expected to secure a good Brexit trade deal and expedite the FTA negotiations with the United States to boost business and investment confidence in the UK. However, in the present scenario, it is difficult to make an assessment and tell how quickly the economy will recover.
