‘Skills investment must follow furlough to support an evolving workforce’

Ed Rimmer

Following the ONS data released on the effects of furlough on UK workers, Business Leader spoke to Ed Rimmer, CEO of Time Finance to find out what it all means. According to the data, there were still 1.9 million people on furlough by the end of June 2021 and workers in hospitality, construction and recreation were amongst the most likely to be furloughed.

The labour market is going through some considerable fluctuations and this is not simply attributed to furlough. The post-Brexit movement of labour and changes to off-payroll working through IR35 are having a significant impact across the board, not least on the haulage industry. What is concerning in the ONS’ data is what it tells us about the current proportion of the workforce still on furlough, which as of June this year stood at 1.9 million people. The worry of course is that the end of the furlough will result in rising unemployment but I think the future paints a much more nuanced picture. The end of furlough is going to be a catalyst for major shifts in the labour market and there will be a knock on effect on skills investment and recruitment strategies.

Our experience throughout the pandemic is that many businesses adapted in response to the challenges they have faced and recruitment has subsequently been a fundamental part of their strategies to diversify. And this is something we’re seeing even more of; Time Finance’s recent survey found that one in three businesses are planning to invest in new personnel over the next six months. So the real question we should ask of the ONS’ data on the effects of furlough is how it can help address worker shortages in the UK – an arguably better challenge than overcoming widespread unemployment, but a challenge nevertheless.

What is interesting in the ONS’ data is that many of those furloughed cited a desire to undergo skills training in key areas to improve their technical ability, customer service and IT. That to me suggests that there is an available talent pool of people willing to up-skill, re-train and evolve their careers in line with the changing job market. That is extremely encouraging and if tapped into, that talent pool can become a core part of our economic recovery, but it is up to businesses’ to facilitate that step-change.

The end of Furlough will undoubtedly pose some challenges to businesses if they have not yet returned to their full pre-pandemic operations. They will of course be presented with some big decisions on job retention. But what we need to focus our attention on is the major shifts in the job market and how to support a changing workforce. For businesses, remaining competitive is more important than ever and they must invest in training, adapt recruitment strategies and possibly even overhaul their operating models to stay ahead in a changing landscape.