An estimated 11.6 million jobs were put on Furlough during 2020 as a result of Covid-19. The most recent figures available show 1.6 million people were still on the scheme at the end of July, the lowest number since it began.
The impact of its withdrawal today will vary from company to company, depending on their trading circumstances.
One poll suggests that nearly seven in 10 employers expect to make redundancies within the next year, the majority of which will take place within the coming months. The findings, from Renovo, came as experts in many fields assessed the implications with worrying results.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, hinted, for example that any hopes that the end of the scheme could solve the supply chain crisis may be “wishful thinking”.
We are likely to be facing a rash of redundancies and the increase in the number of available workers might ease some of the hiring issues
He said: “With long queues at forecourts, gaping holes on shelves, and a million vacancies to fill, the labour crunch risks squeezing the life out of the economic recovery. That’s led to a mini flight out of sterling this week, as worries about slowing growth unfold, amid a sea of rising prices.
“We are likely to be facing a rash of redundancies and the increase in the number of available workers might ease some of the hiring issues, but there is likely to be a big mismatch of skills and experience between those ejected on to the jobseekers heap and the positions available.”
Peggy de Lange, VP of International Expansion at Fiverr, said it would have implications for SMEs and the self-employed. “With Furlough support being withdrawn from this week, and our research revealing 82 per cent of UK SMEs took a financial hit due to the Covid-19 pandemic, it’s likely that the withdrawal of this support will increase pressure on businesses that are already struggling,” she said.
“For the self-employed, on whom insufficient government support throughout the pandemic had a detrimental impact, withdrawing the Furlough scheme this week as we head towards the winter months could be incredibly detrimental.”
Meanwhile, data compiled by cloud payroll specialists, Staffology, gave an indication of how the pandemic affected salaries for various industries.
Reviewing data of the average weekly pay by industries such as hospitality, transport, retail, and the arts, researchers found that the most impacted industry for shrinking salaries was accommodation and food services (hospitality), taking a -3.59 per cent hit between 2019 and 2020.
The industry that noticed a surge in salaries during the pandemic was manufacturing, which includes textiles, leather and clothing, seeing a 4.66 per cent rise from 2019 to 2020, going from £430 per week to £451 per week.
The Office of National Statistics stated that online sales were reaching higher than usual levels over the course of the pandemic, with online purchases representing 28.5 per cent of sales in October, compared to 20.1 per cent in February.
Since 2019, the highest paid industry has consistently been financial and insurance, sitting at an average weekly salary of £1,463 in 2021, 13.5 per cent more than in 2019.
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