UK Markets open in 1 hr 45 mins

Jobs drought unlikely to end as companies plan to stop hiring

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
Theatre workers protest outside the National Theatre, against the mass redundancies of low-paid art jobs due to the Coronavirus outbreak, in London, Saturday, Aug. 1, 2020. Prime Minister Boris Johnson put some planned measures to ease the U.K.'s lockdown on hold Friday, saying the number of new coronavirus cases in the country is on the rise for the first time since May. He called off plans to allow venues, including casinos, bowling alleys and skating rinks, to open from Saturday, Aug. 1. (AP Photo/Alberto Pezzali)
Theatre workers protest outside the National Theatre, against the mass redundancies of low-paid art jobs due to the Coronavirus outbreak, in London, on 1 August. Photo: AP Photo/Alberto Pezzali

Britain’s COVID-19 jobs slowdown looks set to continue for at least another year, with almost half of all businesses planning to either reduce hiring or stop recruitment altogether over the next 12 months.

A survey of almost 250 businesses by the Confederation of British Industry and recruiter Pertemps found that 46% of businesses plan to either reduce or halt recruitment over the next year.

51% of companies said they planned to continue or increase hiring activity, according to the 23rd annual Employment Trends Survey.

READ MORE: UK employers have cut 695,000 jobs since March as unemployment rate rises

On balance, hiring activity across the economy was +5%. However, that marked a sharp slowdown compared with last year when the same survey returned a balance of +56%.

The findings suggest Britain’s jobs drought is unlikely to improve much in the next 12 months. Job vacancies have collapsed since the COVID-19 pandemic struck and remain around 50% below where they were a year ago, according to the Office for National Statistics.

“The UK labour market has been under heavy stress since the outset of the COVID-19 crisis and, although the economy has started to re-open, pressure on firms remains acute,” said Matthew Fell, the CBI’s chief UK policy director.

“With ongoing social distancing, higher costs, lower demand, local lockdowns and fears of a second wave, firms are tempering their recruitment plans.”

READ MORE: UK chancellor says 'job done' on furlough despite rising unemployment

The job squeeze is bad news for the hundreds of thousands of Brits who have been laid off since the pandemic began. Data published by the ONS earlier this week showed 695,000 people have lost their jobs since March.

Graduates and young people are also facing “one of the most difficult jobs market in decades,” Fell said.

“Supporting them through this difficult time and ensuring they have access to opportunities will be crucial,” he said. “It’s encouraging to see one in ten firms looking to use the Kickstart Scheme.”

Fell said the UK economy would see a “two-speed recovery.” Face-to-face businesses such as retail and hospitality are “in survival mode,” while some industries such as digital retail and food delivery are thriving.

READ MORE: UK faces 450,000 job cuts and soaring foodbank use by Christmas

“The government support schemes have been lifesaving for businesses, but firms have reached a fork in the road,” Fell said. “As the Job Retention Scheme unwinds, it’s crucial another lifeline is found.”

Chancellor Rishi Sunak said this week he would look at “creative” ways to keep people in work when the furlough scheme comes to an end in October.