UK suffers largest employment fall in a decade, but tech is resilient

Employment in the tech sector, which helped the country keep working during lockdown, remained above 1.5 million

The total number of people in employment in the UK fell by 730,000 from March - July: the largest quarterly decrease since May - July 2009.

The figures come from the Office for National Statistics, which says there was a net flow of 21,000 people moving from employed to unemployed over the period: the first such change since April-June 2009. 81,000 jobs were lost since June alone, largely as a result of the coronavirus pandemic.

Pay also fell, with regular pay down 0.2 per cent and bonuses down 1.2 per cent: the first negative readings since records began in 2001.

The young (16-24) and old (65+) were most affected by the fall in employment, with 100,000 young people and 161,000 older people losing their jobs - although an increase of 41,000 people in the 25-64 age range partially offset this, overall. The data shows that a significant number of these people became ‘economically inactive', i.e. without a job but not actively seeking work, and so are not included in the official unemployment figures.

Approximately 7.5 million people are temporarily away from work, which includes those on furlough; more than 3 million have been away for three months or more. Again, young and older people were the most likely to be affected.

People in self-employment suffered a sharp fall of 238,000, down to 4.8 million (14.5 per cent of all people in employment). This was a record quarterly decrease, although does include people who are self-employed and temporarily away from work but not getting paid (not eligible for the Self-Employment Income Support Scheme, the self-employment version of the government's furlough scheme).

Despite the negative news, the UK's technology market remained relatively resilient. 33,000 jobs were lost, but employment remained above 1.5 million. IT leaders expect their technology headcount to increase or remain roughly the same over the next 12 months, according to preliminary data from the Harvey Nash/KPMG 2020 CIO Survey, which will be released next month.

Bev White, CEO of Harvey Nash, said:

"Skills that are in most demand are cyber security, architecture, organisational change and cloud.

"The UK's tech leaders are also hiring across the country, with more IT leaders in the North West, in technology hubs such as Manchester, planning to increase their technology headcount over the next year than in London. Both of these cities expect to recruit for more technology roles than the UK average.

"With over a quarter of a million jobs created over the last three years, the UK's tech sector is hugely important to the economy."

The CIO Survey shows that 38 per cent of IT leaders expect to increase their headcount, and 44 per cent expect it to remain the same. This is largely due to the resilience of the sector in the face of the pandemic, as technology has been pivotal in helping to transition the UK workforce to remote working.