Wave of redundancies looming: 70 per cent of UK employers expect job cuts as furlough scheme ends
Nearly 7 in 10 employers expect to make redundancies within the next year, the majority of which will take place within the coming months, according to new research shared with City PM this morning.
According to the study from Renovo, 69 per cent of all UK employers anticipate job losses, with 46 per cent of organisations expecting to make redundancies within 6 months, while 23 per cent anticipate redundancies within 6-12 months.
The news comes as the Coronavirus Job Retention Scheme, or furlough, is set to end on Thursday, forcing organisations to make decisions regarding the future of furloughed employees. For employers expecting redundancies, 84 per cent have employees on furlough.
However, for employees, concerns over redundancy are not explicitly linked to the end of the furlough scheme.
Fifty-six percent of employees surveyed, who are worried about being made redundant within the next year, are not on furlough.
“Despite positive signs in the UK employment market, there remains a high level of pessimism and uncertainty at both the employer and employee level – the study shows that the perceived threat of redundancy remains incredibly high,” commented Chris Parker, managing director at Renovo.
“In particular, at the employer level, there is a high correlation between those with employees currently on furlough and high levels of expected redundancies in the next year. However, employers must be aware that due to events in the last 18 months, perceptions of job security aren’t only an issue for those on furlough right now,” Parker told City PM
The research showed that both employers and employees hold similar perceptions of the causes behind weakened job security.
In fact, half of employers (50 per cent) and 46 per cent of employees state that the key cause of future redundancies within their organisation is the financial impact of the pandemic on business performance.
However, other factors have contributed to a lack of job security as well: more than a quarter of employers (28 per cent) state that redundancies are anticipated as some jobs are no longer needed due to new technology.
One in eight (12 per cent) also feel that certain roles are no longer necessary because of the move to remote and hybrid working.
Anxiety
Emphasising the current anxieties within the market, the report also reveals that for employees who expect to be made redundant within the next year, 47 per cent think it will take over 3 months to find a new role with 14% believing it will take over six months to do so.
According to Renovo, given these levels of concern, it’s unsurprising that job search and career support is the most sought after form of redundancy support, with over 4 in 10 employees (42 per cent) stating that this would be the most valuable type of assistance from employers.
However, the research found that employers may not be fully attuned to this demand.
Just 28 per cent of employers believe that their people would most value job search and career support post redundancy, with one in four (43%) believing their employees would most value emotional and wellbeing support.
“As we emerge from the furlough period, it seems clear that employers will need to work hard to rebuild a sense of job security for their workforces,” Parker said.
“Many employers have made great strides in improving the provision of emotional and wellbeing support as we have all tried to weather the storm of the pandemic,” he concluded.