The number of workers on UK payroll has reduced by more than 612,000 between March and May as impacts of the coronavirus pandemic set in.
New data from the Office for National Statistics (ONS) and HM Revenue and Customs (HMRC) found the number of paid employees fell by 1.7% compared with May 2019 and 2.1% compared with March 2020.
The ONS predicts 163,000 people were no longer on payroll in May, on top of the 449,000 in April.
The UK’s employment rate is currently 76.4%. This is 0.1% lower than the previous quarter but 0.3% higher than the same period in 2019.
Matt Weston, MD of HR consultancy Robert Half UK, said the jobs numbers point to worrying trend in the market. “There are still nearly 8 million people on furlough, while early indicators for May suggest that 600,000 fewer employees are on the payroll, with job vacancies falling to a record low.
“The employment landscape is in a pendulum swing. The ‘war for talent’ is becoming a ‘war for jobs’. But despite the rise in the number of candidates in the market, the skill shortage is still raising its head. Professionals with in-demand skills that will help businesses get through this tough market will still maintain strong career prospects and opportunities to consider.”
The largest quarterly percentage decline in vacancies was in the accommodation and food services activities which reported a 70.7% decrease on the previous quarter.
David Morel, CEO of Tiger Recruitment, said it was likely more job losses are inevitable. “With the furlough scheme due to be phased out in the coming months and many sectors already having reported large-scale redundancies in the UK, it seems likely that more redundancies are on their way – particularly temp and contract staff who are currently on furlough.”
Yet Morel was optimistic that new ways of working can help reduce the number of redundancies and stabilise the job market.
He added: “We expect virtual recruitment to continue an upward trend as employers become used to the processes of remote onboarding and having their teams working remotely. We’ve also seen an uplift in temp-to-perm bookings as employers seek more flexibility while they gauge market performance – this trend is likely to continue as businesses feel their way through the new normal.
Last week, the ONS recorded a drop of 20% in UK GDP month-to-month.