The North East has the highest unemployment rate

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Marianne O’Sullivan, policy adviser, latest column for The Journal.

From the latest employment statistics the North East continues to have the highest unemployment rate and the lowest employment rate across the UK. We are the only region to have experienced slight decreases in jobs and employment overall from November 2021 to January 2022.

The North East also remains the region with the highest economic inactivity rate in England – too many people have left our workforce altogether. The North East economic inactivity rate stands at 24.8%. This compares to a national rate of 21.3%. According to the ONS people aged 50 and over have seen the largest increase in economic inactivity out of all age groups. This is having a large impact on the workforce and adding to labour shortages.

In the longer term there needs to be a focus on skills shortages as this is playing a significant role in limiting growth. We need to make the most of talent in the region to allow everyone to access opportunities. The North East is a leader in sustainable energy with the potential for more jobs around a green recovery, the region needs to have the training in place to encourage people into growing sectors in the region.

Apprenticeships are an important route for younger people and for people looking to change careers, they have been highlighted by the Government’s Social Mobility Commission as a key route into employment as well as employers needing to widen their talent pool.  

We are working with employers, education providers and the Government to tackle the skills gap in the North East. Our upcoming linking business with education event in July will help to share best practise from businesses and discuss how they can effectively engage with education providers.

Our Good Work Toolkit has highlighted how employers can offer staff training and progression opportunities in the workplace.  This is complemented by our further toolkit focussed on ensuring women, in particular, can progress in their careers.

We have some work to do to catch up with the rest of the country but it is certainly not down to a lack of determination and tenacity.

There is so much potential in the North East and with the right support for our employers and education providers we can start to narrow this persistent employment gap.

We need every single person in the region to be able to succeed and become part of our success.

Closing the Neurodiversity Employment Gap

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Neurodiversity consultant and coach Mark Charlesworth kicks off our series on neurodiversity by explaining what neurodiversity is and the steps we need to take in order to put an end to the neurodiversity employment gap.

 

What is Neurodiversity?

The term ‘neurodiversity’ was first coined in 1998 by Judy Singer in her contribution to an academic series on disability, human rights, and society. The phrase initially referred to those on the autism spectrum. Autism Spectrum Condition is a neurodevelopmental disorder that affects how a person thinks, recites, recalls, processes, learns, and retains information differently to those not on the autistic spectrum.

‘Neurodiversity’ has since branched into becoming an umbrella term for other neurodevelopmental conditions that handle information differently in the ways described, such as ADHD, Dyslexia, Dyscalculia, Dysgraphia, and Dyspraxia.

Whilst in its purest sense, ‘neurodiversity’ means a diversity of difficulties, styles, and strengths of thinking, recalling, learning, etc., the neurodiversity ‘movement’ focuses on those who handle information differently because of a neurodevelopmental condition.

The conditions have an impact on a person’s social interaction too, but there is no correlation between a person’s intelligence and whether or not they have a neurodevelopmental condition.

 

The Neurodiversity Employment Gap

Despite, in most cases, having good to high intelligence, there is an employment rate disparity between those with the neurodiverse conditions above and their peers. Less than 20% of neurodiverse adults aged 16 to 64 are employed. The next lowest rate of employment is those with epilepsy, at 37%.

Once you know about a condition and how it affects a person in a given situation, then you are in a stronger position to help the candidate and colleague thrive in the process and become a valued member of the team.

Despite legislation and a vast array of information available in the internet age, very well-meaning recruiters and employers are not sure how to close that employment gap, or sure where to turn for help.

Because of the employment rate gap and also being personally excluded from the job market, I, like many other neurodivergents, have turned to being self-employed to help educate employers and recruiters to ensure that we can progress with equal opportunity.

 

How Can We Close the Neurodiversity Employment Gap?

Ok, so if you want to change and close that gap, where can you start?

Firstly, you should understand the basics of neurodiversity, and therefore each condition, so that you have a good grounding to make progress.

Secondly, you should keep the message and understanding of neurodiversity simple. If you complicate matters, then the message becomes confused and less likely to be acted on. Each condition affects everybody differently, so the details are theoretical and hypothetical until you actually meet a candidate with a particular condition. The candidate can then explain the detail of their needs, which you can fine-tune as you progress together.

Thirdly, you should remember that each person has a multiple number of strengths they will bring as part of their condition. To identify what they are, you will need to encourage confidence and trust so that the candidate will open up about a very personal matter. Once you have built that trust, then, and only then, is the candidate likely to open up.

Fourthly, if a person does open up about their condition, you should bear in mind that those with neurodiverse conditions very often hide and underplay their needs.

And fifthly, if a person tells you about a condition they have, then they may also have a comorbid condition, but not always. This condition may or may not have a diagnosis, and they may not know how to tell you or want to share with you part or all of their neurodiversity that makes them special.

 

Keep an eye out for the next blog in this series in which Mark explains how to attract and recruit neurodiverse talent!

 

To find out more about Mark’s services you can visit him on his website, call him on 07502 464481, or email him at [email protected]

 

Photo by Keenan Beasley on Unsplash

End of furlough- what’s happening?

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The Job Retention Scheme, implemented to support employers with staff costs through the Covid-19 pandemic, is due to close at the end of September. This blog outlines what changes are coming into force and what this could mean for businesses and the local labour market.

What is the Job Retention Scheme and when will it end?

The Job Retention Scheme, also known as furlough, was created by Chancellor Rishi Sunak in March 2020 to prevent employers from having to make redundancies during the Covid-19 pandemic. It enabled employees to remain employed or engaged by a company despite not undertaking any work for them, or only working on a part-time basis. Although it was only expected to last for a few months, it has repeatedly been extended as the second and third waves of the virus arose. For many it has acted as a lifeline by both preserving employee incomes and enabling businesses to retain staff.  At the scheme’s peak in July 2020, more than 190,000 jobs were furloughed in the North East.

Originally, the Government paid 80% of the wages of people placed on the Job Retention Scheme, up to £2500 monthly. However, as the pandemic eases and businesses reopen, the Government has begun the process of winding down the scheme, with the aim to end it fully in September. In July 2021, employers were required to contribute 10% towards the wages of furloughed workers for hours their staff did not work. The Government continued to contribute 70%, keeping the employee’s pay at 80% of their normal wages.

Since the beginning of August 2021, employers have been required to pay 20% of a furloughed staff members’ wages, with the Government contributing 60%. This will continue to be the case until the 30th September.

After that date employers will no longer be able to place employees on furlough leave and will either need to bring employees back into work or begin redundancy processes.

More information can be found here.

What impact will the end of the Job Retention Scheme have on unemployment rates?

The impact that the end of the Scheme will have on unemployment is unclear. The most recent statistics show that 64,000 jobs are currently on furlough in the North East, with the region’s furlough take up rate at 6%, lower than the national average take up rate of 7%. The region’s slightly lower rates of furlough could mean the North East fares better than other areas, like London or the West Midlands which have a higher uptake of the Scheme.

However, the North East suffers from generally high rates of unemployment which could leave it more vulnerable to any national increase. Research conducted by the National Institute of Economic and Social Research has predicted that the close of the Scheme could raise the national unemployment rate from 4.8% to 5.4%.

It is likely that some sectors will be impacted by the end of the scheme more than others. The manufacturing sector has the largest number of employments on furlough in the North East. Manufacturers are also facing other pressures, including climbing inflation, continued challenges in the logistics sector and a shortage of materials which could dampen the sector’s post-lockdown recovery and ability to bring back employees.

Chamber statement on today’s employment stats

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“Employment figures published today are encouraging for the North East, with the labour market showing strong signs of recovery. For the first time since the beginning of the pandemic, the region now has more workers in payrolled employment than it did in February 2020, before Covid-19 had hit.

“However, labour and skills shortages are beginning to emerge, with firms in sectors like hospitality and logistics struggling to recruit the staff they need. In addition, long-term unemployment is an increasingly concerning problem in the labour market, particularly for older and younger workers,

“As the July reopening gets underway, Government should continue to increase investment in adult education so those in unemployment can rapidly retrain and upskill and ensure that jobcentres have the resources they need so that those looking for new opportunities can be fully supported into work. Not only this, but with the impacts of the immigration system beginning to bite, Government will need to assess whether the system is flexible and accessible enough for businesses to recruit the talent they need to grow and, where necessary, make urgent changes.”

Chamber says latest employment stats cause for cautious optimism

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Niamh Corcoran, policy adviser, North East England Chamber of Commerce said:

“Figures released today continue to show the recovery of the labour market with unemployment falling and employment rising in the North East this quarter. Nationally vacancies have returned to pre-pandemic levels and payrolled employment has increased by 197,000 suggesting there has been a surge in recruitment over recent months.

“Whilst the figures should be cause for (cautious) optimism, we are not out of the woods yet. The extension of restrictions and the unwinding of the Job Retention Scheme could pose a threat to this recovery and cause a spike in redundancies later in the year.

“In addition, there are still deep-set issues in the labour market which Government needs to focus on to sustain this recovery. The national figures show that the numbers of people in long-term unemployment has reached the highest levels in five years. Government needs to do more to prevent people falling into long term unemployment and support unemployed workers into good jobs in growing sectors or into upskilling and reskilling programmes if needed.”

Chamber member Saggezza’s business clearly illustrates the statistics. It has offices across the US and India – as well as London and Sunderland – and is recruiting for a range of roles in Birmingham, Edinburgh, London and the North East, having recently exceeded the 100 employee mark in the UK.

The company’s decision to continue increasing its footprint follows a rise in demand for its services during the pandemic, as companies the world-over were forced to suddenly shift their focus to digital transformation and coincides with the company’s bold ambition to double its headcount by 2022.

Martin Williams, managing director at Saggezza UK, said: “Today’s figures are good news for the North East and UK and we’re proud to have played a supporting role in aiding the nation’s economic recovery as we re-emerge from the Covid crisis.

“Over the past 12 months, we’ve created scores of jobs at our offices in London and Sunderland and are delighted to be in a position to continue growing our UK footprint as we prepare for life post-pandemic.

“Ever since we opened our first Saggezza UK office in London, back in 2011, we’ve been blown away by the year-on-year growth the company has charted and the overall contribution our staff have made to the global business.

“Be it delivering complex solutions for global banking giants, or working on joint projects with our teams in India and the US to improve the customer journey for high street retailers, we could never have achieved this had it not been for the dedication of our employees to always deliver for our clients, and the company’s continued commitment to the UK is the perfect testimony of that.

“Through our many digital transformation services, our staff are not only changing the way we do business, but are helping change the world, and I’d encourage anyone seeking to explore a career in tech, or existing tech professionals seeking a new challenge, to get in touch with the team and explore the opportunities on offer. It’s a really exciting time for the business.”

Image: Martin Williams, MD, Saggezza

The Chamber’s comment on employment statistics

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Niamh Corcoran, policy adviser, North East England Chamber of Commerce said:

“Employment statistics released today continue to show the labour market in a relatively stable state, likely due to the support of the Job Retention Scheme. Overall, the region’s employment rate grew, and unemployment rate fell marginally over the quarter.

“With the furlough scheme successfully protecting jobs, it is distorting the true picture. It is likely that the full extent of the pandemic’s impact on the regional labour market will only be clear once the scheme is wound down. It is at that point that Government will need to act quickly to mitigate spikes in regional unemployment.

“Worryingly, today’s national data exposes the significant impact of the pandemic on the employment prospects of young people. In the UK, more than half of those losing their jobs over the last year were below the age of 25, and 78% were under 35. With young people bearing the brunt of the crisis, the Government should urgently extend the Kickstart Scheme and strengthen the apprenticeships system to increase the opportunities for young people.”

Chamber comment on employment statistics

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Niamh Corcoran, policy adviser, North East England Chamber of Commerce said:

“The employment statistics continue to show the impact the Coronavirus pandemic is having on the North East’s labour market. The region’s unemployment rate stands at 6.4%, significantly higher than the UK’s rate of 5%.

“Whilst the rollout of the vaccine offers a glimmer of hope, we remain firmly in the second wave of the pandemic. With many businesses in the hardest hit sectors having been closed since November, the long-term impacts of the second wave of this crisis will be acute. The North East went into this crisis with high levels of existing unemployment, leading the region to be disproportionately vulnerable to any national rise in joblessness.

“The government’s Job Retention Scheme, while acting as a lifeline for businesses, is buffering the impacts of heightened restrictions on the local labour market. With no end to restrictions in sight Government must urgently extend the Job Retention Scheme beyond March. Not only this, but the Chancellor should grasp the opportunity the forthcoming Budget offers and outline stronger business support to help employers retain staff and a comprehensive retraining strategy,in order to minimise the impact of unemployment.”

Chamber comment on today’s employment statistics

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Jonathan Walker, director of policy, North East England Chamber of Commerce said: “This morning’s statistics provide further evidence of the continued disproportionate impact of Covid and the economic crisis on our region. We have the highest unemployment rate in the country and have also seen the largest fall in employment. 

“With our region currently in the top tier of Covid restrictions and  the risk of a disastrous no-deal Brexit on the horizon, the potential for further economic pain is very real. While we look to 2021 with some hope of an improvement in fortunes later in the year, we need to see real large-scale action by Government.  It must make good on its ‘levelling up’ promises to start to undo the damage done to the North East economy. 

“This starts by getting a trade deal with the EU, providing a pathway for our businesses out of Tier 3 and continuing to change Government thinking to support investment in our region.” 

A Closer Look at the Latest Unemployment Figures

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At first glance, the ONS employment statistics released on Tuesday do not seem to correlate with the projections of doom and gloom which have been circulating over the past few months of the Coronavirus crisis.

Nationally the unemployment rate sits at 3.9%, a rise of only 0.1% when compared with last year. In the North East unemployment fell by 14,000 over the quarter. However, when looking closer it becomes clear that it is, unfortunately, not the case that the economic downturn, predicted to be the deepest in modern history, has dissipated. Arguably the true labour market picture is being masked by both lags in Government data and the success of the Job Retention Scheme in protecting jobs at the height of the crisis. Headline figures aside, other indicators suggest that the UK may be on the brink of an unemployment crisis similar to that of the 1980s.

In normal times the ONS employment figures can tell us a great deal about the health of the labour market and indicate the health of the economy. However, the speed at which this crisis has unfurled has meant that the quarterly statistics released by the ONS have been unable to keep up. The headline unemployment/employment rates released yesterday only include data for the three months ending April 2020, and not the extended lockdown. Therefore, this seemingly positive news needs to be taken with a pinch of salt. In the months to come, ONS data that includes the months of May and June will likely offer a clearer picture of COVID’s impacts, not only on national but also regional employment.

Whilst the usual measures of unemployment have not yet caught up with the true effects of the economic crisis, other more up-to-date official data offer an insight. Between March and May, there was a 600,000 fall in the number of people on payroll in the UK. In other words, 600,000 people have lost their jobs in the past two months. Furthermore, between March and May, the number of vacancies available in the UK fell by a record 436,000, or 60%, far more than at any point during the 2008 financial crisis. In addition, the claimant count – that is the number of people claiming benefits, most often due to unemployment- has soared both nationally and in the North East. Between March and May, the North East’s claimant count rose to 10 per cent, an increase of 77 per cent when compared to last year.Some of this increase could be accounted for by adjustments to the Universal Credit system in response to COVID-19. However, the extremely large rise in the count is nonetheless deeply concerning.

Undoubtedly, the Government’s Job Retention scheme is likely to have postponed the worst of the crisis’ job losses. In the scheme, the Government pays 80 per cent of the wages of any worker who would otherwise have been made redundant. The scheme’s uptake has been phenomenally high, with one in four workers nationally having been placed on the scheme. In the North East, 282,500 workers have been furloughed, and their fate, like others in the country, remains uncertain.

What is unclear is how many will return to their jobs after the scheme ends, and whether the scheme will have mitigated mass unemployment, or merely delayed it. According to a YouGov poll, 51 per cent of businesses are intending to make redundancies within three months of the end of the Job Retention Scheme, whilst only 34 per cent were confident all their staff would be kept on. It seems likely that in the coming months we will see an uptick in the unemployment rate, both when the data catches up with the current situation and when the Government’s various income support streams are wound down.

NE youth must not be left behind following Covid-19

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As lockdown is relaxed, attention is turning towards the long-term economic impacts of COVID-19.

Whilst the future is unclear, one thing is certain; the fallout, whatever that may be, will not be felt equally. Previous recessions have taught us that it is young people, alongside women and the lowest paid, who will bear the brunt.

Unlike previous recessions, however, this crisis has particularly impacted sectors of the economy which employ many young people, for example hospitality and retail. According to the Resolution Foundation, these sectors often represent the first rung on the employment ladder, with one-in-five graduates and one-in-three non-graduates working in these industries within the first year of leaving education.

In the short-term, many workers in shutdown sectors have been placed on the Government’s Job Retention Scheme. However, the unwinding of this programme, and the uncertain future of these sectors, presents a worrying prospect for youth employment. Indeed, The Resolution Foundation predicts that an additional 640,000 18-24-year olds could be unemployed this year.

It is not only concerning that young people are at the epicentre of the current economic downturn, but that it could cause them long-term ‘scarring’. Resolution Foundation research into the impacts of the 2008/2009 financial crisis, found that pay levels, for example, for those who left education in 2009, remained lower than for those who left in 2013 for six years. Worryingly, the Foundation anticipate that the current downturn could prove more scarring for young people than previous recessions.

Whilst there are no easy solutions to these problems, what is clear is that policymakers must focus on young people when responding to this crisis. Ensuring young people can enter high-quality jobs, apprenticeships or training must be at the top of their agenda. Not only will this safeguard opportunities for individuals, it will lay the groundwork for the country’s economic recovery.

At the same time, the Government should also commit to its levelling-up agenda. The North East’s already high NEET (not in education, employment or training) and youth unemployment rate leaves our region more vulnerable in a recession. The Government must ensure that no region is left behind, and that all young people, regardless of where they are from, are given the opportunities to succeed.

The Chamber will continue to be a strong voice for the North East and is working hard with our members to press for the measures we, and our future generations, need to recover from this crisis.