Unemployment rose by 50,000 to 1.35 million in the first three months of the year as the current pandemic hit UK businesses hard.
The number of working hours also fell sharply in late March when Lockdown began, and figures for April showed signs of a further fall, according to the Office for National Statistics.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, described this as a “major impact” on the UK labour market. Job vacancies fell significantly with the number of empty posts in the three months to April falling by 170,000 to 637,000, compared to the previous quarter.
Despite heavy investment from the Government in the furlough scheme, employees are anxious and disheartened
The data also showed a spike in the number of people claiming unemployment benefits with the Claimant Count reaching its highest level since 1996 in April at 2.1 million overall.
Peter Meyler, Head of HR Analytics & Consulting at Barnett Waddingham, said: “We are now in an employment landscape that was unthinkable just a few months ago, when employment levels were at a record high and we were worrying about skills shortages.
“Despite heavy investment from the Government in the furlough scheme, employees are anxious and disheartened. Crucially, the issues are not just economic. The current situation is perpetuating, and even worsening, social inequalities, with those living in the lowest income households, BAME and disabled employees hit especially hard.”
Matt Weston, Managing Director, Robert Half UK said: “it is likely that the next few months will be a challenging period for many businesses as they attempt to shore up their operations and ensure greater resilience over the remainder of the year. However, the announcement that the government’s Job Retention Scheme will be extended to the end of October, with increasing flexibility from August, signals continued support for businesses and workers over the longer term.
“Despite the challenging environment, a number of industries remain buoyant and have even experienced growth over the last few months, such as pharmaceuticals and IT services. Across manufacturing, distribution and logistics, investment management and the wider financial services sector, we have seen a rise in demand for IT directors and financial and management accountants.
“Notably, we have seen an increase in appetite for working capital management and collections, finance planning and analysis, and finance managers from businesses looking for temporary or interim support to help ready themselves for the rest of the year.”
The good news is that there is no further bad news, with businesses adapting to life in lockdown as best as they can, but it is hard to avoid the large number still facing the risk of insolvency
One in ten businesses in the wholesale and retail sector say they will not survive another month of the lockdown, according to the latest wave of the Opinium-Cebr Business Distress Tracker.
And the long-term damage to the economy continues to accumulate as the time that businesses anticipate they will need to recover from the crisis is now 28 weeks. This is a three week increase since the last Tracker, just a fortnight ago, and suggests the longer the lockdown persists, the longer it will take for businesses to rebuild.
James Endersby, CEO at Opinium said “We are all going through the most immensely challenging time and all businesses are doing their best to keep their head above water. The good news is that there is no further bad news, with businesses adapting to life in lockdown as best as they can, but it is hard to avoid the large number still facing the risk of insolvency.
“Another ray of hope is that B2C businesses appear to be responding to steadily rising consumer demand by bringing some of their workers back from furlough. However, the incredibly challenging trading conditions across the board means that B2B businesses are yet to see any noticeable improvement in their outlook.”