How the pandemic has shaped UK employment trends in 2020

The 2020 Employment Trends Survey (ETS) lands at a unique time in history: a global pandemic has hit the world and impacted how we work, live and interact with others. It’s a one-in-a-hundred-year event that has impacted the labour market with a severity never seen before. But businesses have stepped up by taking all the steps they could to protect as many jobs as possible. The survey shows that half of respondents took steps to protect jobs and reduce redundancies. Within this group, nearly half of firms (46%) have reduced working hours while 43% have reduced bonuses. Meanwhile, a quarter (26%) have reduced overtime and pay premiums. Looking ahead, the same proportion of firms are planning to take steps to protect jobs in the future (50%). Within this group, 37% are considering reducing working hours while 34% are considering reducing bonuses.

However, in light of economic conditions businesses’ hiring expectations for the next 12 months are weaker compared to previous years. Over one in three respondents (35%) expect to grow their workforce in the next 12 months, a lower percentage than in 2019 (43%). Meanwhile, 27% of respondents anticipate that their workforce will be smaller next year – giving a balance of +7%.

In partnership with Pertemps Network Group, the ETS tracks key labour market trends and gathers the views of business on a range of current issues.

The 2020 ETS findings include:

• Of those impacted by the National Living Wage, just over one in three respondent firms (34%) think that the Low Pay Commission should take a cautious approach to increasing the National Living Wage in 2021, with larger firms being more cautious than SMEs (40% and 32% respectively). Over one in four respondents (27%) are calling for a freeze
• Nearly two-thirds of respondent firms (63%) say that the UK labour market has become either a slightly less attractive or a much less attractive place to invest and do business over the past five years, continuing the declining trend from previous years
• Nearly half of respondent firms (47%) don’t fully understand the new points-based immigration system and don’t know how much preparatory work will be required to use it, while one in three (31%) understand it but would have to undertake some preparatory work to use it. Fewer than one in ten firms (8%) understand the new immigration system and are well prepared to use it
• Despite the pandemic, nearly four in ten respondent firms (38%) have either significantly increased or slightly increased their focus on Diversity and Inclusion over the last 12 months, while the rest (62%) reported no change
• Because of the pandemic, employers changed their approach to employee engagement with over 8 in 10 respondents (82%) having increased communication to keep in touch with employees and more than 6 in 10 (64%) having increased flexible working arrangements to prioritise staff’s work-life balance. Over half of respondent firms (54%) have increased their mental health and wellbeing assistance for employees
• Respondent firms expect their top three priorities for the year ahead to be maintaining or achieving high levels of employee engagement (55%), business transformation or restructuring (48%), and retaining talent (40%).

Read more about the key labour market trends affecting your business.