The pandemic is causing a huge downturn in recruitment and an increase in planned redundancies. Over a fifth of businesses have planned redundancies between April-June 2020, reports the Labour Market Outlook.
Over 50% of HR managers who partook in a recent poll admitted plans to furlough employees, and for those already having made use of the Coronavirus Job Retention Scheme, up to 60% of the workforce are thought to become furloughed.
Employers are halting recruitment plans with just 40% making plans to still recruit throughout the pandemic.
Gerwyn Davies of CIPD states that the furlough scheme is responsible for avoiding mass job cuts. He noted ‘the government has heard consistent calls from the CIPD to extend the job retention scheme and make it more flexible at the same time’ and suggests upcoming challenges for the government will be to work alongside employers to strategise plans to enable furloughed staff to work part-time for their employer, and gradually reduce reliance on the wage subsidy before the scheme ends in October.
He suggested workers should prepare for pay cuts and freezes in the upcoming year as businesses try to save jobs. A third of businesses surveyed have admitted to postponing annual pay reviews in 2020.
In response to the pandemic, many businesses are looking to increase homeworking, it is even thought that it may be advised soon by the government as an alternative to going into the workplace for ‘non-essential’ services.
Halting recruitment is also being implemented, which is bound to have a devastating effect on those who are job-seeking as a result of the pandemic.
Introducing new flexible working arrangements as a result of the pandemic could mean a shift to permanent homeworking, which will be welcomed by some, but certainly comes with its challenges.
The labour market will transform as a result of the pandemic, as we adapt to new ways of working.
Although recruitment has fallen, it is positive to note that intentions to make redundancies only modestly increased in comparison with the previous quarter, and it is hoped that as many businesses as possible will make use of the furlough scheme to retain staff and livelihoods.