Hospitality Hardest Hit By Pandemic Job Losses

The hospitality and licensed on trade sector has been hit the hardest by pandemic related job losses according to statistics revealed by the Office of National Statistics (ONS).

The United Kingdom’s unemployment rate has increased to 5% in the 3 months to November 2020. Since February 2020, the number of payroll employees has fallen by 828,000; however, the larger falls were seen at the start of the coronavirus (COVID-19) pandemic.

For September to November 2020, an estimated 1.72 million people were unemployed, up 418,000 on the same period the previous year and up 202,000 on the quarter, however, the hospitality sector has been the worst affected. The number of unemployed has increased by 50,000 year on year.

Data from our Labour Force Survey (LFS) show a large increase in the unemployment rate while the employment rate continues to fall. The number of redundancies reached a record high in September to November 2020, although the weekly data show it has dropped from the peak in September.

Although decreasing over the year, total hours worked increased from the low levels in the previous quarter, even with the September to November period covering a time when a number of coronavirus lockdown measures were reintroduced. The number of people temporarily away from work has fallen since its peak in April and May 2020, although it has risen slightly in November. The number of people away from work because of the pandemic and receiving no pay has also fallen since the start of the pandemic but risen slightly over the last month.

The vacancies recovery has slowed in October to December 2020 and these are still below the levels seen before the impact of the coronavirus pandemic.

  • The UK employment rate, in the three months to November 2020, was estimated at 75.2%, 1.1 percentage points lower than a year earlier and 0.4 percentage points lower than the previous quarter.
  • The UK unemployment rate, in the three months to November 2020, was estimated at 5.0%, 1.2 percentage points higher than a year earlier and 0.6 percentage points higher than the previous quarter.
  • In the three months to November 2020, the redundancy rate reached a record high of 14.2 per thousand.
  • Early estimates for December 2020 indicate that the number of payrolled employees fell by 2.7% compared with December 2019, which is a fall of 793,000 employees; since February 2020, 828,000 fewer people were in payrolled employment.
  • The Claimant Count increased slightly in December 2020, to 2.6 million; this includes both those working with low income or hours and those who are not working.
  • There were an estimated 578,000 vacancies in the UK in October to December 2020; this is 224,000 fewer than a year ago and 81,000 more than the previous quarter.
  • Growth in average total pay (including bonuses) among employees for the three months September to November 2020 increased to 3.6%, and growth in regular pay

The report also highlights the effectiveness of the government furlough scheme, which in October 2020 was protecting 2.4 million workers from unemployment down from a peak of almost 9 million (8.9 million) in May 2020.

Neil Pattison, Director at Caterer.com, the UK hospitality industry job board said:

“The latest ONS Labour Market stats highlight the need for dedicated Government support for the hospitality sector as continued business closures force many of our hugely valuable workforce to look elsewhere for work. We come together with the industry in urging the Prime Minister to create a new position in Government that can give hospitality businesses a clear roadmap for reopening to help it get back on its feet.

“It’s clear that there’s significant pent-up customer demand for hospitality services and that, once the sector is able to reopen, it can play a pivotal role in creating future jobs, helping to reboot the economy and in particular address rising youth unemployment.”

Emma McClarkin, Chief Executive of the British Beer & Pub Association, said:

“Rising unemployment and redundancies hitting a record high are extremely concerning. As one of the most devastated sectors by COVID-19, we fear it could get a lot worse unless action is taken.

“The Chancellor must act to get us over this final hurdle in the fight against the virus. A clear roadmap to reopening is needed to save jobs, along with an economic stimulus package so sectors like ours can bounce back and lead the recovery.”