Job market momentum fuels optimism for 2021

by | Dec 16, 2020 | News

The impact of a second UK Lockdown has failed to damage the UK jobs market’s recovery, according to the latest Keep Britain Working Job Index.

The early shoots of a recovery in the jobs market has been maintained through November as job listings – a key indicator of a positive economic outlook – have continued to increase, with a 4% jump from October and are currently at 73% of the level seen in January, according to the data.

If these early signs of a jobs market bounce back continue, it is anticipated that by Spring 2021, levels will have returned to those expected in a ‘typical year.

With the current UK unemployment rate standing at 4.8% according to ONS figures, prospective job seekers will be heartened to see both jobs market and business confidence returning. With so many jobseekers in the market, which is likely to increase come the New Year and furlough ending in March, candidates should be mindful of using their time wisely in not only applying for jobs, but finding ways to keep up to date with their industry or train in new skills to widen their opportunities. The welcome news of vaccine approval and roll out is also expected to further boost confidence levels for the longer term as businesses can, once more, plan for the future.

Locked down, but not out

The impact of the national November lockdown on the jobs market appears to have been slight – unlike the previous country-wide shutdowns of March and April when the jobs market fell by up to 53%. In contrast, the most recent lockdown saw the job market grow by 4% month on month.

Sectors on the up

Job opportunities for those looking for work or at risk in their current position continues to be seen in several sectors. There has been large month-on-month increases in listings for Customer Services (now at 92% of pre-COVID levels) roles as well as those in Leisure & Tourism, which saw a dramatic 107% month on month increase.  And manufacturing has seen an overall 4% year on year increase despite the difficulties of 2020, while Transport & Logistics roles continue to experience growing demand after the initial push for workers in October.

Sectors suffering

The retail and hospitality sectors continue to bear the brunt of the decline, at a time when they should be at peak trading, with retail job listings falling back to 66% of the levels seen in January – down 30% year on year.  Likewise, hospitality is also suffering with roles 6% down month on month and 74% down when compared to November 2019. 

Application rates per job declining

The average number of applications has dropped to 16 – the lowest levels since January – across all sectors tracked by the Keep Britain Working Index. A combination of an increased number of jobs to apply for, the Government’s support packages such as the Kickstart Scheme, and the extension of furlough until March next year are some of the key reasons driving this data.

Despite the worrying headlines we have all seen about significant job losses, REED’s job data for November tells a different story when it comes to the overall state of the UK jobs market.  When the pandemic first erupted in the early spring and Lockdown 1.0 followed in its wake, the impact on the labour market was seismic. The shock waves were even harder and faster than those experienced in the financial crisis of 2008/9 and job vacancies advertised on fell by 72%.

“Following this experience, when Lockdown 2.0 was announced for the month of November, industry expectations were that we would see another big decline in job numbers. However, this did not happen. Instead, job numbers rose in November by 4% over October. And the year on year position has recovered markedly since the spring with numbers down only 20%, as opposed to 72% earlier this year. 

“This is a much more encouraging picture and we may even be able to leave the recession we found ourselves in behind as we move into 2021.

“Sectors like transport and logistics, education, technology, social care and health and medicine will continue to be busy.  Other sectors such as accountancy, business administration, hospitality and leisure will open up and these sectors will boost new job numbers significantly.

James Reed, Chairman of Reed and co-founder of Keep Britain Working

While hospitality, leisure and travel face ongoing challenges, white collar workers have become so used to working at home that productivity in professional services, media and IT & telecoms is growing – albeit steadily. Meanwhile, the significant amount of industries which simply cannot function without on-site workforces – manufacturing, engineering, logistics, infrastructure and transport – are actively buoyant with clear growth maps and increasing vacancy creation.

“This growth, in part, is due to major Government investments into these sectors to encourage continuous growth despite the challenging conditions Covid-19 inflicted on us all. Yet, we are still to see the long-term impact of those announcements. Spending in defence and cyber industries, and for major projects like HS2 and highways programmes, has been ringfenced, which is fantastic news as they will prove major catalysts for growth and job creation across the UK for the next decade and beyond. We also expect to see more commitment to both new build and maintenance projects, with the Government expected to prioritise the building of small nuclear reactors alongside the maintenance of current assets to lengthen their lifespan. 

However, we must look at how we can pivot talent in industries that are suffering, transitioning complementary skillsets into other areas and upskilling where necessary to ensure talent supply is available to meet demand. 

“The Government’s 10-year National Infrastructure and Construction Pipeline, forecasted at £600bn of investment over the next decade, was supplemented by an additional £100bn investment by the Chancellor in the November Spending Review. But the challenges of resourcing the increased demand affect multiple sectors and are set against a backdrop of people and skills trends that include an ageing workforce with changing skills requirements, difficulties in attracting young talent, poor diversity and equality, and a lack of joined-up approach across different sub-sectors.

“As such, organisations need to begin strategically planning when it comes to skills forecasts and the requirement for future talent to identify what routes to market and talent pools they can capitalise on to source the current and future skills they need. Apprenticeships and training will remain a vital lifeline to many sectors to prevent a retirement cliff edge, and businesses should look at ways in which they can attract currently underutilised talent from other sectors to fill this gap to ensure those in-demand industries can continue to deliver.”

Ged Mason, CEO of the Morson Group and co-founder of Keep Britain Working
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