Home News Long-Term Furlough and Unemployment ‘Scarring’ Workers

Long-Term Furlough and Unemployment ‘Scarring’ Workers

Long-Term Furlough and Unemployment ‘Scarring’ Workers

Workers who have been on furlough or unemployed for long periods due to the pandemic need greater financial and job-seeking support from the government, according to a report from the Resolution Foundation.

Almost two million workers have been out of work or receiving furlough for six months, it said.

The think tank found that 700,000 workers had been unemployed for at least six months in January, and a further 500,000 had been fully furloughed for the same period.

Adding in the number that had moved between a full furlough and losing their job over that time increases that figure to 1.9 million.

The Resolution Foundation found that the January lockdown has not had as stark an impact on the labor market as the initial shock of new restrictions in Spring 2020.

Official figures show that the number of workers claiming Coronavirus Job Retention Scheme support during the current lockdown is around 4.5 million, half of the 9 million peak last year. They also show that employment and unemployment rates – despite a sharp rise in redundancies last autumn – have not changed drastically over the winter months.

However, the Resolution Foundation warns that despite some economic green shoots, there could still be severe consequences for those who have been on furlough long-term.

The think tank’s report, Long COVID in the labor market, says that while people on long-term furlough have had financial support and can potentially get back into work through their current employer, they still face challenges as they have missed out in terms of skills development and earnings growth.

They are also more likely to fear for their job security, it found. Around 8% of workers who are still in employment either expect to lose their jobs in the next three months or have been told they will be made redundant, the Resolution Foundation said. This figure rises to 21% of those who have been furloughed for at least six months.

Job insecurity remains high, particularly among those who have spent long periods not working, or who are currently furloughed” – Nye Cominetti, Resolution Foundation

It added that there could be a ‘scarring effect’ of long-term unemployment, in that potential employers may perceive people negatively. One in seven of those in employment are already looking for new work, and a further 10% is expected to do so in the next three months. Only 14% are confident of finding work within the next month, while 37% worry that they won’t find a new job in the next year.

The Resolution Foundation is urging the chancellor to set out a gradual roadmap to come out of furlough, by phasing support out in a way that reflects specific challenges faced by certain sectors and is sensitive to public health restrictions.

It wants the Treasury to keep full furlough in place for “several months” after public health restrictions have been lifted so employers can bring staff back gradually, and remain in place longer for sectors subject to ongoing restrictions, such as hospitality. The government should then slowly increase the minimum hours required of workers for support to be provided, it recommends.

The Foundation has also called for the government to extend the Kickstart Scheme, which incentivizes businesses to take on 16 to 24 year-olds, into the next year, and for employers to take long periods of furlough into account when deciding who to take on such schemes.

This week the Institute for Fiscal Studies warned against a blanket extension of furlough beyond the end of April, claiming it could “choke” economic recovery.

It said the chancellor needed to “strike a balance between continuing support for jobs and businesses harmed by lockdowns and weaning the economy off blanket support”.

Nye Cominetti, senior economist at the Resolution Foundation, said: “While the UK’s economic prospects are finally looking up, job insecurity remains high, particularly among those who have spent long periods not working, or who are currently furloughed.

“The chancellor must use his Budget to set out his own roadmap for phasing out the furlough scheme gradually and in a way that acknowledges where the risks of rising unemployment are highest – in sectors like hospitality.

“This would keep a lid on rising unemployment and encourage firms to bring back existing workers, while tax breaks on hiring could help more people to move jobs too.”

Eskalera, a Startup Led by Goldman Sachs’ Former HR Head Has Launched a Diversity and Inclusion Index

Eskalera, a technology startup led by Goldman Sachs former human resources head Dane Holmes, has launched an index to measure corporate diversity and inclusiveness,...

HSBC to Remove 35,000 Jobs Amidst Covid-19 Crises

HSBC Holdings Plc has restarted cutting as many as 35,000 jobs, three months after the coronavirus outbreak forced it to pause a long-awaited overhaul...

Genpact Offers Its Internal Skill Training Program Globally for Everyone

Genpact has announced Adapt and Rise, a role-based online learning platform that leverages Genpact's expertise honed from delivering real-world change for hundreds of clients....

San-Francisco Based Learning Platform Degreed Has Raised $32 Million in New Funding

The upskilling platform, Degreed, has announced $32 million in new funding in direct response to overwhelming demand for better skill insights, talent mobility, and...

Research Shows the Implications of Workplace Layouts on Employee Productivity and Overall Performance

As some workplaces prepare for the gradual return of employees and overhaul office layouts and seating plans, research has shown this could also have...

Employee Concierge ‘Back Technologies’ Integrates Automation Into Internal HR and Other Support Tasks

Companies are under increasing pressure to automate workflows and digitally service their employees, particularly in light of trends toward remote work. It takes an...

HR Strategies to Help Your Business Navigate the New ‘Normal’

No business is immune to the massive changes resulting from the health crisis. Organizations have proven themselves to be agile, and employees have demonstrated...

The Importance Of Diversity And Inclusion In HR, Hiring, Talent Management: Thoughts From A Top Expert

Michael C. Hyter is one of today’s best-known experts on inclusion and diversity and the author of The Power of Choice: Embracing Efficacy to Drive Your Career and The...

HR Expert Highlights Actionable Steps to ‘Make Real Change’ Against Racism in Your Workplace

Kyra Leigh Sutton, Ph.D., is a faculty member at the Rutgers University School of Management and Labor Relations, where she teaches human resources courses...

Adidas Employees Want Company to Investigate HR Chief for Response to Racial Issues

A group of Adidas employees from around the globe is asking the company to investigate its chief human resources officer, as part of a...