ON nearly every measure, these latest jobs figures are horrific, particularly in Scotland. The country’s 4.6 per cent unemployment rate for the period from February to April is the worst of all the UK regions, and it now seems a foregone conclusion that number will in the coming months exceed the 8.8% peak reached in the wake of the 2008 financial crisis.
While England, Northern Ireland and Wales all registered marginal declines, unemployment in Scotland rose by 0.5 percentage points.
What’s particularly worrying is that this is the period before lockdown measures started easing, which means England’s more aggressive re-opening strategy is not the explanation for the numbers we’re seeing today.
READ MORE: Bosses warning as Scotland races ahead of other UK nations in unemployment
Despite unprecedented support through the Government’s Coronavirus Job Retention Scheme, which is currently propping up the incomes of more than 600,000 Scots, the claimant count in Scotland rose by 78% between March and April – the biggest monthly rise on record. On top of that, early data indicates there was a further 10% increase in May.
This has not yet had a significant impact on middle management positions, which is traditionally one of the first areas where companies seek to make savings by streamlining their organisational structure.
It could be that firms are taking a different approach this time around, with an eye to retaining what are often thought of as their “best people”. But it seems more likely that furlough has merely granted these workers a stay of execution as companies have postponed the cost of making more expensive long-serving employees redundant. Time will tell as more data flows through in the coming months.
An alternative option would be to “repurpose” middle managers to more junior roles. This may not be done as aggressively as has been the case at British Airways, but whether within their current organisation or in a new sector, large-scale retraining will be a feature going forward.
The only antidote to this job market slump lies in the rebound of vacancies, and the ability to match up labour market skills with areas of high demand. The one positive note at the moment has been a further increase in hiring demand, with the number of vacancies advertised online across Scotland up by 13% in the first two weeks of June against the previous fortnight.
This is key as May saw the first monthly increase in hiring demand since February, indicating that the market did indeed bottom out in April. This fragile recovery continues to be driven by the need for workers in the health, social care, education, engineering and manufacturing sectors.
The danger is that a poorer jobs market in Scotland leads to essential skills being lost as workers look for better wages south of the Border, which in turn would prolong economic recovery. As furlough is phased out, new programmes to retrain workers and encourage employment – such as a cut in employers’ National Insurance contributions – need to be brought in to stem the drain on talent.
Gavin Mochan is Commercial Director at S1jobs.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here