Why the end of furlough may not solve the jobs crisis like some expect

One million people may be facing an uncertain future as furlough ends, with many asking what next?

Those who are made redundant face an uncertain future that could mean getting on the job hunt, early retirement, switching to self-employment, or signing on to universal credit, which is about to be hit with a £20 per week cut. 

It’s unclear how many of those who were on furlough will remain in their jobs from October 1, but 70 per cent of UK employers are expecting to make redundancies within the next year, the majority of which will likely take place in the coming months, according to research from Renovo Employment Group.

This is good news – apparently – for the recruitment crisis that has seen job vacancies surging past one million, the most since records began in 2001. 

The hospitality sector has been particularly hit, with nearly one in 10 hospitality roles vacant, suggesting a shortage of more than 180,000 workers in August, according to trade association UKHospitality. 

This has seen employers launch desperate recruitment and retention campaigns to attract, and keep, staff in jobs which are known for long hours, no breaks and chaotic shift patterns.

“There will be some job losses but there are also these one million vacancies in the labour market for people to move towards,” Chief Secretary to the Treasury Simon Clarke told Sky News, suggesting those who find themselves out of a job can simply fill the vacancies that already exist.

But it’s not quite that simple for many who have been on furlough for some or all of the past 18 months.

Older workers, who are the most likely to have been on furlough as it ended, are at the greatest risk of unemployment, and face having to retrain and return to the world of work which has changed enormously in the last 18 months. 

“Some (older workers) will be lucky and able to resume where they left off earlier in the pandemic, but many others are likely to find that furlough was only a temporary reprieve and that their old jobs are gone for good,” said Caroline Abrahams, Charity Director at Age UK.

The pandemic has seen an extra 300,000 workers retire early, according to estimates by The Institute for Employment Studies. 

While some of those may well have been lifestyle choices, older workers forced to leave long careers in the same industry may conclude that they will never be able to work again. 

As emphasised by the backlash to the government’s 2020 campaign that suggested ballerinas retrain to work in cyber, those who have spent years building specialised careers may not think it’s as simple as “Rethink. Reskill. Reboot.” 

Equally, they may not be able to. 

“Ageism is rampant in the labour market and for older workers who lack digital and other skills, or who have been working in a niche area, finding a fulfilling, well paid job can be a pretty tough ask,” said Abrahams. 

On the positive side, “youth unemployment is down, it is a positive picture, it is recovering” Steve Haines, director of public affairs at youth charity Impetus told The Big Issue.

But he stressed, “You’ve got a lot of young people who have been deeply affected by the pandemic in terms of their mental health” so for them, re-entering the workplace is incredibly daunting. 

“For young people who are at the start of their careers, who have been on furlough and not working for up to 18 months, there hasn’t been the opportunity to gain work experience in a meaningful way.

“In West London there are loads of restaurants advertising for staff, for sure, but that’s not the same if you’re a young person in Great Yarmouth or Blackburn.”

There are promising opportunities available for training and reskilling, however.

Chancellor Rishi Sunak has announced a £500m plan for jobs to target jobs support to furlough-leavers and people claiming universal credit.

The government’s kickstarter to fund six-month work placements for young people on universal credit, will be extended until March 2022. Money is also being diverted to training courses for in-demand jobs such as HGV drivers. 

Yet this takes time. So those one million vacancies aren’t likely to be filled by Christmas.