Almost two million people in the UK have not worked for at least six months, new research has shown.
The Resolution Foundation said drastic measures need to be taken by Chancellor Rishi Sunak in the upcoming Budget to address the damage to the UK's labour force because of the pandemic.
The think tank's study showed the number of people on the Job Retention Scheme (JRS) is around 4.5 million during the current lockdown, half the nine million peak during the first lockdown, showing that its impact on the labour market has been less severe as firms have adapted to operating through the pandemic.
However, the cumulative impact of the crisis is causing the biggest challenges in the labour market, the report said.
The foundation said that around 700,000 workers had been unemployed for at least six months in January, while a further 500,000 workers had been fully furloughed (not working any hours).
Because some people have moved between unemployment and full furlough in recent months, the total number who were unemployed or fully furloughed in January, and had been so for at least six months, was 1.9 million, said the report.
While those on long-term furlough have had greater financial support, and have an easier route back into work than those who have lost their jobs, they face many of the same challenges in terms of a loss of skills and missing out on earnings growth, it was warned.
While the outlook for the economy has improved, many workers remain concerned about their own job prospects, said the think tank.
The report calls for the full JRS to remain in place for several months after public health restrictions have been lifted to give firms time to bring staff back.
Nye Cominetti, senior economist at the Resolution Foundation, said: “Ten months into the crisis, almost two million people have now been affected by long Covid in the labour market, having not worked for at least six months.
“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 road map 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.”
Anneliese Dodds, shadow chancellor, said: “With the UK suffering the worst economic crisis of any major economy, it’s vital that the Chancellor acts before the Budget to protect jobs, secure our economy and get Britain back on the road to recovery.
“Labour has called for a smart extension to the furlough scheme that includes training to help the long-term furloughed build new skills while they are unable to work.
“We’ve called for an overhaul of the Government’s failing Kickstart youth jobs scheme to help our young people back into employment, and we’re urging the Chancellor to bring forward £30 billion in capital investment over the next 18 months to support the creation of 400,000 new jobs of the future.”
Lost your job? Here's some top tips
Finding a new career
Hannah Salton, a career coach and consultant, recommends the first thing people do is reflect on what they've enjoyed from previous roles.
"Think about the type of activities they've enjoyed doing," she recommends.
Identifying transferable skills
Ms Salton suggests using previous job descriptions or online searches to identify the key skills involved in a typical career that you have done to help articulate what skills you may have built up."There are a lot of key skills that are quite general, such as team working or communication, but what can be helpful is if you really think about delving into the specifics," she says.
"Having a good CV and a good LinkedIn profile these days is not enough," Ms Salton says.
She adds that to improve your chances on the jobs market, job seekers must also focus on networking. 'Bridge jobs’
However, for those who want to stay on their career path, but know it may not be viable for the next year or so, Salton recommends searching for a temporary job change, AKA a 'bridge job'. "A bridge job can be really useful because it can provide you the time and mental space to really work out what it is you want to do, they can also be very useful in terms of keeping you in the workforce and maintaining your skillset," she says.
Struggling with your mental health after losing your job? Here are some tips to help get you back on track
Millions of people around the world have lost their jobs due to coronavirus, so its important to remember you're not alone.
You shouldn't blame anyone for your situation, but that may be of little comfort if you're stressed about paying bills or putting food on the table.
Allow yourself to grieve
Grief is a natural response to loss, and that includes the loss of a job. As well as the loss of income, being out of work also comes with other major losses, some of which may be just as difficult to face.
Develop new relationships
When we lose our jobs, many of us also lose the friendships and social networks that were built in the workplace. But it’s never too late to expand your social network outside of work. It can be crucial in both helping you cope with the stress of job loss—as well as finding a new job, says HelpGuide.
Involve your family for support
Unemployment affects the whole family, so don’t try to shoulder your problems alone. Keeping your job loss a secret will only make the situation worse. Your family’s support can help you survive and thrive, even during this difficult time.
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