Business Research and Analytics PDF

Business Research and Analytics
Words count – 1473
Report title- COVID-19 and UK Labour Market
i

Table of Contents
Executive Summary.......................................................................................................................iii
1. Introduction..................................................................................................................................1
1.1 Background of the Study.......................................................................................................1
1.2 Aim and Objectives of the Study...........................................................................................1
2. Methodology................................................................................................................................2
3. Research Analysis........................................................................................................................3
Coronavirus: Impact on the UK Labour Market..........................................................................3
Crisis on the National Economy and Labour Market..................................................................3
Measuring the UK Labour Market..............................................................................................4
4. Conclusion...................................................................................................................................6
References........................................................................................................................................7
List of Figures
Figure 1: Coronavirus Impact on the UK employees (source: Powell and Francis-Devine, 2021) 3
Figure 2: Comparison of job recoveries following previous crises (source: Cambridge
Econometrics, 2021)........................................................................................................................4
Figure 3: A Quarterly Increment of Employment Rates while Decreasing Unemployment and
Economic Inactivity (source: Office for National Statistics, 2021)................................................5
ii

Executive Summary
The global COVID-19 pandemic and the lockdown laws enacted to counter it have substantially
influenced the labour market. Understanding these impacts necessitates obtaining and analysing
data near-real-time, significantly when regulations change often and implementing regional
lockdowns. This research examines the UK employment market by evaluating data from the
House of Commons Library, Cambridge Econometrics and the Office of National Statistics
(ONS), breaking it down by industry and location topic analysis and geo-inference techniques
being used. I also look at how salaries, contract types, and work modes have altered after the
COVID-19 crisis struck the UK in March. Vacancies dropped between 60 to 70% in the first few
weeks of the lockdown. Even though numbers had increased by the end of the year, overall
employment ad shortfall was projected greater than 40%. Although better domestic job and
nursing positions persisted even throughout the lockdown, tourism and postgraduate employment
possibilities have reduced substantially. Though there is some indication that local lockdowns
impede recovery and that less severely hit places may have had a minor reduction in vacancies,
differences in geography are far less significant than differences in the industry. In a modest but
significant way, the income distribution and completed temporary and permanent employment
have also altered. In addition to the research, this paper provides an open approach for
conducting a quick and thorough employment market survey in uncertain times.
iii

1. Introduction
1.1 Background of the Study
The COVID-19 problem has been portrayed as a double pandemic, posing a serious worldwide
threat to nations' health and prosperity. The Covid-19 problem has had a significant influence on
the UK's economy and labour markets. During their peak in April 2020, 31% of prospective
workers were furloughed (Arthur, 2021). By January 2021, unemployment had risen to 5%, the
highest possible level since 2016, although it was still nowhere near as bad as it might have
become if the government hadn't intervened. The most likely to lose their employment and
become economically inactive are youthful personnel and workers aged 65 and up. Those
between the ages of 25 and 64, but on the other side, have witnessed the most significant rises in
unemployment. According to a recent Cambridge Econometrics estimate, the UK's GVA
(economic production) dropped by an astounding 9.4% (£164 billion) in actual figures in 2020.
Whereas crisis has affected the entire economy, the extent of the damage and the possibility for
recovery differs by industry. Furloughs hit 68 per cent of employment in accommodation and
food, 64 per cent in arts and entertainment, and 52 per cent in shopping, according to early
furlough data again for lockdown that began in January 2021. (Coibion, Gorodnichenko and
Weber, 2020).
On the other hand, other industries have relied less on layoffs, and some have even increased
their staff. Over the next decade, health and governance will add 374,000 positions to help
coordinate and monitor the pandemic response. Real estate, internet retail trade, IT services, and
banking are among the industries that have developed as a consequence of increased demand.
1.2 Aim and Objectives of the Study
The goal of the study is to show how COVID-19 affects the labour market in the United
Kingdom. The primary objective of this report is to find out the situation of the UK labour
market during worldwide pandemic restrictions. There have other secondary purposes to be
followed.
- Analysing the recent trend of UK labour market for the UK employees.
- Assessing and Recommending based on the supplied labour market study in the United
Kingdom.
1

2

2. Methodology
The study techniques will be based on secondary data from the House of Commons Library (UK
Parliament), Cambridge Econometrics Analysis and the Office of National Statistics (ONS).
Also, there are other additions as particular facts and statistics gleaned from online media and
journal publications covering 2015 through 2021. The information gathered will be linked to the
employment data, both as a total and a population percentage depending on demographics. A
larger population may be studied by collecting secondary data, allowing for a clearer
understanding of the UK labour market's current situation and COVID-19 impact on the
economy. Saunders, Lewis, and Thornhill (2019) noted that secondary data offers both benefits
and drawbacks. The advantages of utilising secondary research in this report are that it is simpler
to obtain secondary data due to time limitations. Further analysis may be performed on the data,
and the data gathered is non-biased.
Researchers can acquire secondary data by reading various articles, periodicals, blogs,
newspapers, and journals. As a result, primary data refers to data obtained for the exact first time,
whereas secondary sources are related to information that has already been published for another
study. As a result, this approach connects to quantitative data methodologies that employ visual
representations such as graphs, which may then be analysed using computations to find a
correlation or extrapolation. This research addresses how COVID-19 has recently invaded the
UK labour market and the present situation after the post-pandemic era (Martin and Okolo,
2020). Therefore, the study aims to determine the current position of the United Kingdom's
labour market and how the UK employees have suffered from the COVID-19 pandemic
restrictions.
3

3. Research Analysis
Coronavirus: Impact on the UK Labour Market
The pandemic has had a more significant impact on the labour market condition of specific age
groups. The most likely to lose their employment and become financially unstable are relatively
young employees and professionals aged 65 and up. Those between the ages of 25 and 64, on the
other hand, have witnessed the most significant rises in unemployed (Mayhew and Anand,
2020). Some employees are suffering disproportionately unfavourable economic consequences
as a result of the coronavirus epidemic. Ethnic minorities, women, young employees, low-wage
workers, and disabled workers have been the worst hit economically by the coronavirus.
Figure 1: Coronavirus Impact on the UK employees (source: Powell and Francis-Devine, 2021)
Specific indexes have returned to pre-pandemic levels, indicating that the UK employment
market is recovering. Employment levels have grown in recent months as unemployment rates
have fallen (Arthur, 2021). However, the end of the Coronavirus Employment Retention
initiative in September has thrown the labour market into disarray, and additional unemployment
is likely later this year.
Crisis on the National Economy and Labour Market
Throughout the epidemic, the country's economic success has been a source of concern
(Foundation, 2021). Nonetheless, it obscures Covid-19's uneven regional impacts, which will
have significant long-term consequences for local economies.
4

The year 2020 will see the most significant rate of GVA contraction in the last 100 years,
although employment will be spared owing to the government's policy response. The Covid-19
problem has had a significant influence on the UK's economy and labour markets. At their
maximum in April 2020, 31% of competent personnel were furloughed. By January 2021,
unemployment had risen to 5%, the highest possible level since 2016. However, it was still
nothing near as wrong as it might have been if somehow the government hadn't already
intervened (VOXEU, 2021).
Figure 2: Comparison of job recoveries following previous crises (source: Cambridge Econometrics, 2021)
Employment will recover to pre-recession levels by 2022, thus according to Cambridge
Econometrics, a year before GVA does. It would also signal the most significant post-COVID
labour market recovery ever since the mid-1970s recession recovery.
Measuring the UK Labour Market
Estimates for June to August 2021 suggest that the labour market is still recovering, with a
quarterly gain in employment and unemployment and economic inactivity decreases. The easing
of several coronavirus (COVID-19) limitations increased in total hours worked throughout the
quarter.
The employment rate in the UK was forecasted to be 75.3 per cent, down 1.3 percentage points
from the quarter before the coronavirus outbreak (December 2019 to February 2020), yet up 0.5
5

percentage points out from the previous quarter (March to May 2021). The UK unemployment
rate was expected to be 4.5 per cent, up 0.5 percentage points even before the epidemic and
down 0.4 percentage points again from the preceding quarter. The rate of economic inactivity in
the United Kingdom was forecasted to be 21.1 per cent, up 0.9 per cent from before the
pandemic but down 0.2 per cent from the previous quarter (Forsythe, Kahn, Lange and Wiczer,
2020).
Seasonally adjusted employment, unemployment, and financial inactivity rates in the United
Kingdom from June to August 2006 through June to August 2021 are given below.
Figure 3: A Quarterly Increment of Employment Rates while Decreasing Unemployment and Economic Inactivity (source: Office
for National Statistics, 2021)
Throughout the coronavirus pandemic, there was a decrease in work and increased business
instability and unemployment for men and women. However, employment rates have increased
for both men and women, and unemployment rates have decreased during the previous quarter.
The inaction rate for males has quarterly reduced, but it remains higher than pre-pandemic levels,
while the inaction rate among women has reverted to pre-pandemic levels.
6

4. Conclusion
The Covid-19 epidemic impacted several businesses and industries particularly severely. A
crucial concern when economies recover is whether the rebound will re-employ many of the
employees laid off during the crisis and because they will return to equal employment. The
COVID-19 crisis's first shock was felt across vast swaths of the economy, as substantial
limitations on social closeness and dread of contagion placed significant portions of the economy
on pause throughout OECD nations. The COVID-19 problem has had devastating economic
consequences. Between March and May, unemployment numbers in the United Kingdom surged
at 125.9%, while vacancies decreased by 58%. The rate of unemployment did not immediately
rise but was on a noticeable upward trend by the end of last year, peaking at 4.9 per cent in
December 2020. To assist at this period, the UK government adopted exceptional measures,
including the Coronavirus Work Engagement (furlough) Programme, which also tries to reduce
unemployment by providing businesses with subsidies covering up to 80% of employee pay. The
Covid-19 problem has had a significant influence on the UK's economy and labour markets. At
their pinnacle in April 2020, 31% of eligible employees were furloughed. By January 2021,
unemployment had risen to 5%, the highest level as of 2016, although it was still nowhere near
as bad as it might have been in the administration hadn't intervened.
7

References
Arthur, R., 2021. Studying the UK job market during the COVID-19 crisis with online job
ads. PLOS ONE, 16(5), p.e0251431.
Cambridge Econometrics, 2021. Coronavirus: how we can help - Cambridge Econometrics.
[online]. Available at: <https://www.camecon.com/coronavirus/> [Accessed 17 October 2021].
Coibion, O., Gorodnichenko, Y. and Weber, M., 2020. Labor Markets During the COVID-19
Crisis: A Preliminary View. SSRN Electronic Journal, 56(2), pp.89-156.
Forsythe, E., Kahn, L., Lange, F. and Wiczer, D., 2020. Labor demand in the time of COVID-19:
Evidence from vacancy postings and UI claims. Journal of Public Economics, 189, p.104238.
Foundation, W., 2021. Impact of Covid-19 on the UK labour market: The case for a place-based
recovery. [online] Lancaster.ac.uk. Available at: <https://www.lancaster.ac.uk/work-
foundation/news/blog/impact-of-covid-19-on-the-uk-labour-market-the-case-for-a-place-based-
recovery> [Accessed 17 October 2021].
Martin, C. and Okolo, M., 2020. Modelling the Differing Impacts of COVID-19 in the UK
Labour Market. SSRN Electronic Journal,.
Mayhew, K. and Anand, P., 2020. COVID-19 and the UK labour market. Oxford Review of
Economic Policy, 36(Supplement_1), pp.S215-S224.
Office for National Statistics, 2021. Employment in the UK - Office for National Statistics.
[online] Ons.gov.uk. Available at:
<https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeet
ypes/bulletins/employmentintheuk/latest> [Accessed 17 October 2021].
Powell, A. and Francis-Devine, B., 2021. Coronavirus: Impact on the labour market. [online]
House of Commons Library. Available at: <https://commonslibrary.parliament.uk/research-
briefings/cbp-8898/> [Accessed 17 October 2021].
VOXEU, 2021. Labour market reallocation in the wake of Covid-19 | VOX, CEPR Policy Portal.
[online] Voxeu.org. Available at: <https://voxeu.org/article/labour-market-reallocation-wake-
covid-19> [Accessed 17 October 2021].
8