2021: The Outlook?
The United Kingdom appears to be facing a repeat of the COVID-19 crisis and tragedy that first began in March last year. So it’s currently rather difficult to view the New Year of 2021 in a more positive light than its predecessor.
Yet there is an importance difference this time. The national vaccination programme begins in earnest this month, and that provides the promise of a potential end point to the crisis. So how long until the worst of the pandemic is under control and some form of normality returns for businesses?
The end of the crisis?
At the time of writing it is impossible to predict an actual end date, as so much is dependent on the speed of the vaccination programme, which is in turn reliant on production and supply of the vaccine(s), the availability of a workforce to safely deliver the injections, and indeed the willingness of the population to actually take part in the programme.
Yet the Chancellor’s recent extension of the Job Retention Scheme until the end of April suggests that government now at least hopes for a partial return to normality before the 2021 Mayday bank holiday is reached.
And what then?
Experts suggest that once the vaccination programme is providing protection for the majority of the most vulnerable in the population, then much of the UKs day-to-day business and personal activity will be able to resume – albeit with now largely accepted measures such as social distancing and mask-wearing still playing a major role.
And only once this milestone is finally reached will employers finally be able to take a long hard look at what damage the last year has done to their business finances and recruitment plans.
What about jobs?
Many commentators are already assuming that the number of UK workers made redundant will significantly increase once the national safety net of the Job Retention Scheme is finally removed.
This will sadly be true in so many cases, but does overlook the possibility of further support for jobs from the government. The Chancellor might well opt to re-introduce policies such as the Job Support Scheme and Job Retention Bonus (both of which were put on ice when the Job Retention Scheme was unexpectedly extended at the end of October last year). Such measures might well significantly reduce the numbers being made redundant across the nation.
And then there is also the possibility of a short spending boom from individuals and business once COVID-19 restrictions are finally curtailed. Many months of lockdown have inevitably led to much pent-up demand from both groupings, and this should help boost economic activity. This in turn may persuade employers to avoid making at least some redundancy decisions too.
Our survey says…
And interestingly Howden’s recent research also supports this view.
In December we surveyed almost 200 senior HR and Finance professionals from a wide range of employers (including Private, Public and Third Sector organisations). The below question and response is particularly enlightening:
In 2021 do you expect your organisation to:
- Significantly increase employee numbers: 5%
- Slightly increase employee numbers: 39%
- Experience no change to employee numbers: 28%
- Slightly decrease employee numbers: 21%
- Significantly decrease employee numbers: 1%
- I’m not sure: 6%
The key finding here is that twice as many employers are expecting to increase (44%) headcount rather than decrease (22%) employee numbers in the calendar year of 2021.
Given the scale of the economic challenges the nation has faced in recent months, the above is a surprisingly robust finding and provides some much needed positivity amidst all the negative headlines of the moment.
Of course the nation, its employers, and their employees, all have a long way to go yet. But it’s important to look ahead now that an end to the crisis appears to be finally in sight.
For more information on any of the above topics, please speak to your usual Howden Consultant in the first instance, or visit our website for other contact options. For the latest details on COVID-19 & Employee Benefits provision please visit our coronavirus hub.
Steve is Head of Benefits Strategy, Howden Employee Benefits & Wellbeing, and is an award-winning thought leader on Pensions, Employee Benefits, and Human Resources issues. He is occasionally accused of making Employee Benefits interesting.
More insights from the Employee Benefits and Wellbeing team
This article is one of many insightful opinion pieces.