May 2022, what's going on with the UK job market?
It’s been a whirlwind, to say the least. From that first covid lockdown in March 2020 to the start of the war in Ukraine earlier this year, life has felt like a disaster movie. As always, the labour market feels the effects. So what are the haps these days?
Coronavirus chaos two years on
According to the Learning and Work Institute, there would be 1.25 million more people in the labour market had pre-pandemic trends continued. It was inevitable that businesses would close and people would lose their jobs. There have been other repercussions that we didn’t see coming though. For example, the pandemic has directly impacted the size and age of the workforce, not just the amount of jobs. The negative mental health impact has led to the older population taking early retirement. Combine that with the existing trend of the younger generation staying in education for longer as it becomes more accessible. We’ve got a shrinking workforce with less age diversity than before.
In February the Bank of England forecasted a rise in the unemployment rate, to a peak of 5%, for the rest of 2022. At the time of publication the UK unemployment rate was estimated at 3.8%, 0.2 percentage points lower than the previous three-month period, and 0.1 percentage points below pre-coronavirus pandemic levels. However, the market still appears to be unstable and uncertain. The shortage of candidates for roles has led to a competitive market, employers are having to offer hefty packages to get the best talent to join their teams. It’s possible that when businesses can’t keep up with the rising outgoings anymore there will be a wave of redundancies.
Cost of living
Chancellor Rishi Sunak promised £22bn from the government to “cushion the impacts of global price rises” on the cost of living. Although it’s uncertain how this investment is intended to be used. The rising fuel, electricity and food prices could tempt some of the retired population back into the workforce. Everyone became more aware of their work/life balance in the past few years and we had plenty of time to reflect on our choices. We could potentially see more people returning to education to retrain in a different profession as a result.
Next up, who knows?
When The Institute of Grocery Distribution says the UK labour market appears to be behaving “oddly”. Can anyone predict what’s going to happen next? We’ll keep our eyes peeled and update you again next month.