Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

CoronavirusEconomics, government & businessLatest NewsJob creation and lossesLabour market

‘Years not months’ for labour market to recover – IES

by Rob Moss 8 Apr 2020
by Rob Moss 8 Apr 2020 An almost entirely empty Liverpool Street Station during coronavirus lockdown. Photo: L8NEK / Shutterstock
An almost entirely empty Liverpool Street Station during coronavirus lockdown. Photo: L8NEK / Shutterstock

The Institute for Employment Studies (IES) has said it expects it will take years rather than months for the labour market to fully recover from the economic impact of the coronavirus.

In a research report setting out the institute’s assessment of the economic challenges that the UK will face from the Covid-19 crisis, it says it expects that unemployment has already risen to “at least” 2.5 million – from 3.9% to around 7.5% of the workforce.

If the lockdown continues into the summer, then it is plausible that viable businesses will start to run out of cash reserves and loan options and we will see a ‘second wave’ of large scale job losses” – IES report

“This will be a far quicker rise than in any of our last three recessions, and would put the unemployment rate slightly higher already than the highest point it reached in the last recession,” say the authors.

It predicts that in the first month of the coronavirus crisis employment has fallen by 1.5-2 million, equivalent to 5% of all of those in work. This would be more than double the decline in employment in the financial crisis (740,000).

IES director Tony Wilson said: “In order to be ready to act in the months ahead, we need to act now. However the sheer scale of the challenge means that government will not be able to do this by itself.

Coronavirus and the economy

Recruitment falls at fastest rate since 2009

Furlough scheme could cost up to £40 billion

Furlough: what the updated guidance clarifies, and what it doesn’t

Furlough: employers may re-employ staff who left after 28 February

“We recommend that government brings together a ‘Cobra’ for jobs, to work together on designing, co-ordinating and mobilising this response, and convening a wide range of partners including government departments and agencies, local government, sector bodies, trusts and foundations and key stakeholders.”

He added that the IES’s proposals would help ensure that as the economy recovers we can keep people in work, help them find better work and minimise the ‘scars’ from being out of work.

“With a cost of around £4.7 billion over the next three years, the evidence from previous programmes tells us that this investment would more than pay for itself in the future; while the evidence from previous recessions tells us that the costs of inaction would be far higher,” said Wilson.

The IES said there is clear evidence that prolonged spells of unemployment, particularly while young, can cause long-lasting ‘scars’ on an individual’s future earnings, employment prospects and health and wellbeing.

Early analysis suggests that the young and the lowest paid are at particular risk in this recession, with women more adversely affected than men. Older people are also likely to be particularly at risk.

The authors write: “What is less clear at this point is whether unemployment will continue to rise steeply in the coming months, and how fast the recovery will be. If we can leave the ‘lockdown’ smoothly by late spring, then there seems a reasonable chance that unemployment will peak quite quickly, and more or less where it reached after the 2008/9 recession.

“However if the lockdown continues into the summer, then it is plausible that viable businesses will start to run out of cash reserves and loan options and we will see a ‘second wave’ of large scale job losses.

“Overall, we think that it is highly unlikely that we will see a steep recovery in employment or unemployment in the near future, and we expect that it will take years rather than months for the labour market to fully recover.”

The report proposes five priorities for action:

  • investment in new active labour programmes for those out of work
  • skills and training to support the recovery
  • an integrated and coherent offer for young people
  • an orderly withdrawal from the Coronavirus Job Retention Scheme
  • a new, partnership-based, back-to-work campaign.

Latest HR job opportunities on Personnel Today

Browse more human resources jobs

Rob Moss
Rob Moss

Rob Moss is a business journalist with more than 25 years' experience. He has been editor of Personnel Today since 2010. He joined the publication in 2006 as online editor of the award-winning website. Rob specialises in labour market economics, gender diversity and family-friendly working. He has hosted hundreds of webinar and podcasts. Before writing about HR and employment he ran news and feature desks on publications serving the global optical and eyewear market, the UK electrical industry, and energy markets in Asia and the Middle East.

previous post
Liz Earle Beauty Company adopted discriminatory redundancy process for pregnant worker
next post
Coronavirus: nearly nine in 10 fear for their health

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

Government responds to umbrella company call for evidence

6 Jun 2023

Government under pressure to publish NHS workforce plan

1 Jun 2023

How to attract and engage older workers (webinar)

30 May 2023

Black and ethnic minority workers twice as likely...

26 May 2023

Collaboration and problem-solving identified among future work skills

25 May 2023

One in 10 young people not in education,...

25 May 2023

Net migration rises to new record

25 May 2023

Half of UK workers seeking a new job

24 May 2023

Record number out of work due to long-term...

16 May 2023

Public sector pay awards set to rise at...

15 May 2023

  • The HR Bundle: Your one-stop guide to building a successful global HR Department PROMOTED | Get your hands on Deel’s free HR bundle...Read more
  • The Benefits of an Employee Assistance Programme PROMOTED | EAPs support employees in a range of ways...Read more
  • Intergenerational working and how to manage up and down the generations PROMOTED | The benefits and challenges of intergenerational workplaces...Read more
  • Bereavement in the workplace: How training can help HR get it right PROMOTED | HR professionals play an essential role...Read more
  • UK workforce mental wellbeing needs PROMOTED | The mental wellbeing support employers are providing misses the mark...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2023

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2023 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+