Business groups are sounding the alarm on jobs, warning that huge swathes of the population could be laid off or furloughed in the coming weeks due to the coronavirus pandemic.
The British Chamber of Commerce (BCC) and the Chartered Institute of Personnel and Development (CIPD) both issued warnings on Thursday, saying millions of people could be fired or furloughed as COVID-19 brings the economy to a halt.
CIPD, the professional body for the HR industry, said a survey of 301 companies found almost a quarter expect to lay off at least some staff in the coming weeks.
“Many businesses are already considering redundancies, rather than utilising the government's Job Retention Scheme,” said Ben Willmott, head of public policy at the CIPD. “Making redundancies should be a last resort once all other options for reducing workforce costs have been taken.”
Half a million additional people applied for job seekers allowance in just nine days last month, suggesting redundancies have already begun en masse.
Both the CIPD and BCC also found many businesses plan to use the government’s Job Retention Scheme, which allows employers to furlough staff and have the state pay 80% of their wages.
CIPD said 52% of businesses surveyed planned to use the furlough scheme. The BCC’s survey of 600 businesses found 44% were planning to furlough at least 50% of staff in the next week.
The findings suggest huge swathes of the population will soon be out of work. Bank of America earlier this week said that a survey of UK consumers found 34% had left work over the seven days, either due to being furloughed, made redundant, or the closure of their employer.
It comes as the world economy grinds to a halt due to the COVID-19 pandemic. The impact has been felt particularly sharply in the UK over the last two weeks, after prime minister Boris Johnson ordered all non-essential businesses to shut and told the population to stay at home as much as possible.
“The Coronavirus pandemic has taken a heavy toll on business and economic activity across the UK,” said BCC director general Adam Marshall.
Marshall warned that companies across the country could start collapsing in large numbers unless government support reaches them quickly. 62% of businesses surveyed only had enough cash to survive for a maximum of three months.
“While businesses have welcomed the unprecedented size and scope of the government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible,” Marshall said. “The majority of firms cannot wait weeks or months for help to arrive.”
The Corporate Finance Network said on Wednesday that almost a fifth of small companies could run out of cash by the beginning of May, putting 4 million jobs at risk.