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​Whilst Unemployment Hits Four-Year High in the UK, What is The Outlook For 2021?

Posted-on January 2021 By Amy Bates

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Unemployment in the UK is currently at the highest level in more than four years, according to the new data published by the Office for National Statistics (ONS).

This represents around 1.7 million people, while the rate remained below 4.9 per cent in the three months leading up to October. The dramatic increase was only four per cent at the end of 2019, before the Coronavirus pandemic hitting the United Kingdom.

In its report, the ONS data also noted that redundancies reached new highs during the quarter as businesses struggle with the reality of more long-term closures. However, the weekly figures in the report also noted that the number of redundancies lessened compared to the peak in September of last year, which is a key sign that the jobs market is beginning to stabilise.

James Reed, Chairman of REED, noted that there was a glimmer of hope in this news. “We must all remember how far we’ve come as a nation and know that the UK labour market is recovering against all the odds.

“Last week, the total number of jobs posted on reed.co.uk was four per cent higher than the same period in 2020 – which is particularly impressive considering the pandemic hadn’t started by then,” he said.

So, what can we expect to see from the recruitment sector in 2021?

New research by reed.co.uk, has found that considering the effect of the pandemic on the economy, the majority of people have not been put off looking for jobs this year and remain positive about potential prospects.

In a survey of 1,521 participants, 59% said they were still looking for new opportunities, which led REED Chairman James Reed to forecast that 2021 will be a year of meaningful movement in the UK labour market.

In spite of the current economic chaos, 82% of job-seekers feel hopeful that they will find a new job in 2021, including 52% who feel "very hopeful."

Many are willing to adjust to the changing job market, with more than two-thirds of employees (70%) saying they will take a pay cut or consider working to secure a job in another industry, and more than half (53%) are willing to move to another part of the country to find the right role. In addition, research has shown that almost a third (29%) are already actively looking for new sector jobs.

Women (75%) are more open to changing sector to secure a job compared to men (71%), as are older generations, with 45-54 year olds most likely to agree (76%).

However, men (61%) are more likely than women (38%) to look into moving to a different part of the country to secure the right role, with younger generations agreeing – rising highest among 25-34 year olds (63%).

The study also reveals that men in the new year are more positive about their job prospects, with 84% feeling hopeful compared to 82% of women. 35-44 year-olds were most likely to share this positive outlook for the future, with 86% agreeing, falling among the oldest and youngest generations that were least hopeful – over 55 (78%) and 16-24 year-olds (80 percent ).

This optimism is the outcome of a recovering labour market, with reed.co.uk adding over 169,000 new jobs in November, the highest number since before the February pandemic. Between September and October, and in every area except Scotland, work posts have increased by 15 percent, suggesting a long-term national rebound for the UK labour market.

James Reed, Chairman of REED, commented: “The pandemic has sent shock waves through the UK economy this year. Sectors have been impacted to varying degrees, both positively and negatively, and large sections of the population have made the shift to working remotely. 2021 will be another significant year of change for many businesses and workers as the pandemic continues and the roll-out of the vaccine hopefully restores confidence.

“Despite news of a second strain, I predict a year of movement next year. Lots of jobseekers are now looking for better opportunities and employers have a diverse and talented pool of people to choose from. We are seeing great dynamism, resilience and a willingness to adapt in the labour market and this makes me feel optimistic as we approach 2021.

“Our recent job vacancy figures suggest there is reason to be cheerful. Despite the second national lockdown, vacancies in November continued to increase by 4% over October and we now have nearly 200,000 new jobs listed. To secure the best of these jobs, people must continue to be versatile and enhance their prospects by upskilling and/or reskilling. It’s encouraging to see so many people are willing to try new opportunities in other sectors and other regions.”