Unemployment claims jump as vacancies plummet

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More than 2 million people claimed unemployment benefit in April, as the coronavirus lockdown began to take its toll on jobs.

According to the latest figures from the Office for National Statistics, there was a 69.1% increase in Jobseeker’s Allowance claimants and Universal Credit claimants “searching for work” between March and April 2020.

In the three months to March 2020, before the lockdown was put in place, the UK employment rate reached a joint-record high of 76.6% – 0.6 percentage points higher than a year earlier. The unemployment rate was 3.9%.

However, these figures are likely to have changed dramatically since the end of March. Over the weekend, the Bank of England’s chief economist warned that UK unemployment may rise to levels not seen since the recession in the early 1980s.

Matt Weston, managing director at recruitment consultancy Robert Half UK said: “Following the Bank of England’s prediction that unemployment will rise to 9% in 2021, it is likely that the next few months will be a challenging period for many businesses as they attempt to shore up their operations and ensure greater resilience over the remainder of the year.”

CIPD senior labour market adviser Gerwyn Davies said the unemployment figures could have been worse had it not been for the support offered through the Coronavirus Job Retention Scheme.

“It is early days, but it seems that employers’ first response to the pandemic has been to cut pay and recruitment rather than to make large-scale redundancies. Vacancies have been slashed alongside a sharp fall in pay. By contrast, the level of redundancies has not increased significantly yet,” said Davies.

The jobs market has also taken a significant downturn. There were an estimated 637,000 vacancies in February to April, 170,000 fewer than the previous quarter – the largest quarterly fall since 2001, the ONS said.

Compared with last year, vacancies were down by 210,000, which the ONS said was the largest annual decrease since 2009.

Totaljobs CEO Jon Wilson said: “While the ONS labour market figures don’t show the full impact of Covid-19, we know that there are more people looking for work than before the outbreak and we are entering employer-led market for the first time since the financial crisis of 2008.

“It’s clear that Covid-19 will have a long-term ripple effect, not only on the labour market, but also on our working lives, as the dramatically different working world in recent weeks has given people new perspectives.

“Nearly three quarters (70%) of UK workers have increased desire to change industry as a result of Covid-19 and our research indicates that people are placing higher priority on fulfilling jobs that also allow them to develop new skills, strike a better work-life balance, and have more job security.”

The Recruitment and Employment Confederation’s director of policy Tom Hadley said its figures, published earlier this month, showed the quickest drop in permanent and temporary staff placements since the global financial crash.

“Sectors like retail, hospitality and construction have been hit especially hard, while sectors like logistics and healthcare have seen greater demand for staff. The recruitment industry is working with government and other bodies to place staff into key worker roles quickly and help the country through the coronavirus crisis,” he said.

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