Employment in the UK

The Office for National Statistics have released their latest labour market report.

While some have lost their jobs, the biggest response of employers remains cutting hours rather than employment. Lower hours includes putting people onto furlough – though there is some evidence of some people returning to work.

Furloughed workers are often on partial pay, so wages fall in real terms. As people return to normal hours, we might see this unwind.

The most important reason (at the moment) for falling employment seems to be lower numbers starting work. We are not seeing a big rise in people leaving jobs.

The chart shows inflows (new employees) and outflows (leavers) onto payrolls as shown by RTI FPS Statistics– after a rise, in outflows in April, both inflows and outflows have fallen in May and June below their pre-pandemic levels.

While employment is falling, many who are not working are no longer looking for a job and considered ‘economically inactive’.


July 1st saw the introduction of Flexible Furlough enabling much of UK PLC to start to get back to work. Over the next few months, the cost of employment for those furloughed will pass back to business. Realities of economies will start to impact on employment. The government plan for jobs needs to be digested and applied to see if opportunities present. Ways of working will change as we return to a new normal! Will we see rapidly increasing unemployment, or will the furlough bonus and kickstart help elevate mass unemployment?

PAYadvice.UK 17/7/2020

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