Over 600,000 employees no longer on payroll during lockdown

The number of employees on UK payroll has fallen by over 600,000 between March and May.

This is according to the Office for National Statistics (ONS) who found that there were 612,000 less people on payroll during these two months.

It was also reported that there were 476,000 vacancies in March to May, which is 342,000 fewer than the previous quarter and 365,000 less than the year before.

James Reed, chairman of REED, said:

What was sadly a health emergency is now rapidly becoming an employment crisis. Millions of jobs are now at risk and what we’re seeing may just be the tip of the iceberg. There’s a real danger that unemployment could go above 15 per cent, and as the clock continues to tick on the Government’s generous Job Retention scheme, jobseekers and businesses face an unforgiving employment landscape.

We need to act now if we’re to ease the economic effects of the lockdown. Existing jobs must be protected, jobseekers need support finding new roles, and furloughed workers should be redeployed or reskilled. We must also find constructive ways to accelerate jobs growth and protect livelihoods – in fact it must become one of the government’s number priorities.

According to Her Majesty’s Revenue and Customs (HMRC), 9.1 million employees are being paid through the Government’s furlough system. However, this has led to more of a muddled employment picture according to Robert Alster, head of investment services at investment management firm Close Brothers Asset Management, who said:

With 9 million furloughed workers not included in the data, the current UK unemployment picture is muddied. This means it’s difficult to compare the situation on either side of the Atlantic but it’s clear that the challenge is substantial. The final day for furlough funding applications passed by last week, and while there is growing confidence that the worst of coronavirus infections is behind us, it is by no means clear that the UK economy is out of the woods.

As global markets show signs of jitters, is it really only in October, when the furlough scheme is due to wind down, that the reality of the UK job market will become apparent? Cash strapped businesses have been able to defer tough staffing decisions with the help of government support, but this will not continue indefinitely. It seems unlikely that all furloughed workers will return to their jobs, and it may be some time before hiring in the hardest hit sectors begins to pick up, sectors that were the engine of employment growth in the wake of the global financial crisis. With heightened social unrest, growing dissatisfaction at the Government’s handling of the crisis, and the prospect of mass unemployment, a new-born baby will surely not be the only thing keeping Boris Johnson up at night.

Claimant unemployment has risen by 1.6 million from March to 2.8 million which is higher compared to the rise of 1 million during the 1929 Wall Street Crash.

Tony Wilson, director of the Institute for Employment Studies (IES), said:

If the public health crisis is just starting to ease, today’s figures show that the unemployment crisis is only just beginning.  There can be no doubt now that we are on course for claimant unemployment of three million by next month, and it may well reach the highest ever recorded.  It’s clear too that this crisis is hitting many poorer areas hardest – with coastal towns and ex-industrial areas seeing particularly big increases in unemployment.

We have seen some tentative signs in the last week that hiring may just be starting to pick up again, but with the Job Retention Scheme beginning to wind down from the end of next month we need urgent measures now to kick-start hiring and encourage employers to keep their current staff on.  Top of the list should be a cut to employer National Insurance.  At the same time, we need to double the size of our employment services so that everyone gets the help that they need to find new work, and we need to guarantee that all young unemployed people will have the opportunity of an education place, apprenticeship or job.





Darius is the editor of HRreview. He has previously worked as a finance reporter for the Daily Express. He studied his journalism masters at Press Association Training and graduated from the University of York with a degree in History.