Furlough crisis as ‘wrong jobs’ emerge leaving Britons adrift – ‘spells trouble!’
Sunak says There are no plans to extend furlough in August
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Furlough, or the Coronavirus Job Retention Scheme, has protected millions of jobs throughout the COVID-19 pandemic, covering employer’s costs to ensure they could keep workers on the payroll. But the measure was only intended to be a temporary one. Now, as the scheme draws to a close, there are fears about redundancies, and people looking for new jobs. While job vacancies have topped one million between June and August 2021, for the first time since records began 20 years ago, experts remain concerned about employment opportunities. Although an increase in job vacancies may seem like perfect timing for the end of the scheme, some have asserted issues could be uncovered when furlough finishes.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “There are over a million job vacancies washing around the UK, which sounds like exactly the right time to be coming off furlough and plunging back into the jobs market. The trouble is that they’re the wrong jobs, which spells trouble for both jobseekers and businesses.
“There were 1.6 million people on furlough at the end of July, and with the end of furlough looming, this is likely to mean hundreds of thousands of people looking for work.
“Soaring vacancies in the quarter pushed job adverts over a million for the first time on record, and in almost every sector, vacancies hit record levels. On the face of it, this looks like positive news for job hunters.
“The industry with the most new vacancies was the accommodation and food services sector, where they were up 75.4 percent to 57,600. As anyone waiting for a delivery will know, staff shortages in transport and storage mean vacancies here were up 76.3 percent to 20,300 too.
“Part of the problem with both is that the usual employees don’t want to work there any more, and there aren’t enormous numbers of jobs seekers with the skills or the inclination to take the work on.”
Ms Coles has highlighted that shortages in both cases derive from people leaving the sector in droves to work elsewhere. This was either to depart for another sector, or to undertake work in a different country entirely.
But problems have also come to a head as workers are reluctant in many cases to make a return to the workforce. Some do not feel comfortable returning to previous work environments, while others have simply realised their working needs have changed throughout the pandemic.
In the haulier industry, for instance, there is now an ageing workforce. Older workers are now considering taking retirement and leaving the workforce altogether, rather than getting back on the road to their previous roles.
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For younger workers, particularly in the accommodation and food services, Ms Coles attributed some of the issue to higher economic inactivity.
She continued: “There’s also the issues of a skills mismatch. The industries with the highest rates of furlough are air travel, travel and tour operators, photography, creative arts and entertainment, and clothes manufacturers. It’s not clear how many of these people are ready to move into accommodation and food services or logistics.
“For these job hunters, it’s going to come as no comfort to learn that there are still actually fewer jobs in the economy than there were back in December 2019: this isn’t a boom time for jobs it’s a shortage of people to do them.
“It’s also incredibly difficult for businesses trying to operate with so many staff shortages. Transport firms are having to boost wages dramatically overnight to get drivers into the business, and still massive shortages are leaving retailers with gaps on shelves.
“Health and care companies are facing a huge squeeze in filling shifts, and are struggling to keep up services for vulnerable people. And accommodation and food companies are running on empty after one of the hardest periods they’ve ever had to push through.”
Finally, disappointing Gross Domestic Product (GDP) figures can be attributed somewhat to staff shortages, the expert said, only further evidencing the knock on effects for the British economy.
Indeed, the fact this trend is growing leaves many feeling less than optimistic about what the future may hold for the jobs market.
Furlough is scheduled to come to a conclusion on September 30, as the scheme is currently winding down towards its end.
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However, data has shown that around 1.6million people were still furloughed at the end of July, meaning some are still in a precarious position when it comes to employment.
At the time, Chancellor Rishi Sunak commented: “It’s fantastic to see furlough levels at their lowest since the start of the pandemic, with young people in particular getting back to work and kickstarting their careers as the UK gets back to business.
“With furlough naturally unwinding and coming to a close at the end of the month, we are doubling down on our Plan for Jobs – focusing our support on giving people the skills and opportunities they need to succeed in the jobs of tomorrow.”
Data found it was the over-65 age category which is now the most likely to be on furlough, with some eight percent of those who are eligible in the age group still remaining as part of the scheme.
But one thinktank has expressed caution, saying the jobs market is now set for a “bumpy ride” once formal Government support measures finish at the end of the month.
The Resolution Foundation acknowledged furlough as a resounding “success” in its protection of jobs, however, said that with over one million people remaining on the scheme, the labour market remains “far from full health”.
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