Thousands of workers in the UK face the prospect of being laid off from their current jobs in the near future. This is according to new data from the Office for National Statistics (ONS) that shows one in 50 businesses in the UK expects to make people redundant during the next three months. Here is everything you need to know.
[top_pitch]
Businesses and expected redundancies in the UK: what does the data show?
Businesses have enjoyed a resurgence in recent weeks due to the lifting of lockdown restrictions, as noted by Sarah Coles, personal finance analyst at Hagreaves Lansdown.
Almost nine in ten businesses are trading again, with the percentage of staff on furlough falling to a new low. Additionally, the number of firms saying that they are turning over less cash than usual has also gone down from 65% in June last year to 29%.
However, not all businesses are out of the woods yet. Some service industries have found it hard to bring their staff back. In education, arts and recreation businesses, 11% of the workforce are still on furlough. Other service industries where the level of furlough is still high include beauty, laundry and dry cleaning, and funeral services.
Perhaps more concerning is that one in 50 businesses now say that they plan to make staff redundant in the next three months.
Almost a fifth (19%) of these businesses plan to make staff redundant in the next two weeks to one month. This suggests that tough times may be on the way for some employees sooner rather than later.
Which industries will be most affected?
According to the ONS, the top three industries reporting expected redundancies over the next three months are:
- Transportation and storage at 7% (which has increased from less than 1% in late July 2021)
- Information and communication industry at 4% (which has risen from 2% in late July 2021)
- Manufacturing industry at 3% (which is broadly the same as in late July 2021)
Why do businesses plan to make staff redundant?
The top five reasons given by businesses for making redundancies are:
- Need to reduce staff costs – 41%
- Certain job roles are no longer required – 36%
- Phasing out of the furlough scheme – 28%
- Business is closing or insolvent – 7%
- Relocation of the business – 7%
[middle_pitch]
Is there a silver lining?
If you are currently still on furlough or your employer is struggling, it’s undoubtedly an incredibly worrying time. However, it is not all doom and gloom. There is a crumb of comfort in vacancies data from the ONS.
Though the number of vacancies fell at the beginning of August, the ONS says that it is still significantly higher than before the pandemic. In the transport/logistics/warehouse category, for example, the vacancy rate is currently 332% above its level in February 2020.
Vacancies are particularly high in some regions:
- North East – 176% of the pre-pandemic level
- East Midlands – 161%
- Northern Ireland – 154%
Coles says that this should at least give workers hope that if their jobs are threatened, there could be something else there for them.
What can you do if you’re at risk of redundancy?
Now might be a good time to update your CV just in case you need to use it in the near future.
It might also not hurt to look for a side gig. It could not only supplement your current income but could also act as a cushion if your main job is at risk over the next few months.
Additionally, it is critical to create and adhere to a budget now more than ever. A budget will help you to track your expenses and identify areas where you might be able to save money. Any amount you can squirrel away or add to your emergency fund could make a world of difference.
