The Office For National Statistics has released its latest set of employment figures and although we braced ourselves for bad news.
They certainly make for grim reading. Initial findings show 600,000 fewer employees in the UK on the payroll in May compared to March and the number of claims for Universal Credit is also on the rise. For those looking to get back into employment the outlook is bleak, with the number of vacancies falling to a record low in May.
Certain sectors are going to be hit particularly hard and we are likely to experience this more here in Dorset where our local economy relies heavily on tourism and leisure. The ONS cites the accommodation and food service industries to have suffered a particular decline in total pay. The bigger picture shows that for the first time since January 2018, total pay fell in real terms (in the three months to April).
The reality is, the situation is likely to get much worse. So far in this country we’ve benefitted from a range of government initiatives, including Small Business Rate Relief, self-employed grants and of course, the Coronavirus Job Retention Scheme. Yet whilst the nation has been scooping out the water, the ship is still sinking. Deferral payments and bounce back loans will come due. No matter how well businesses will have tried to reduce risk and forecast ahead, inevitable decisions will only have been delayed.
The first phase of the furlough scheme will be coming to an end in late July, with the next phase requiring company contributions gradually scaling up between August and October. Consequently, many businesses will need to look at ways to cut costs in order to survive, with redundancy planning sadly becoming a more common task for HR departments and outsourced agencies like Purple HR.
The greatest barrier we face is uncertainty – we just don’t know. Will there be a second wave? When will there be a vaccine? Will children be able to go back to school after summer? It seems more and more likely that it won’t be ‘school as usual’ come September and given this latest announcement, it certainly isn’t likely to be ‘business as usual’ any time soon either.