Firms being forced to consider redundancies to weather Covid storm - Chamber

Many firms are being forced to consider making redundancies in order to weather the economic climate associated with the pandemic, business leaders have said in response to the latest job figures published today.

According to the Office of National Statistics (ONS), between September and November 2020, the employment rate in the West Midlands fell by 0.7 per cent to 73.8 per cent.

Unemployment increased by 1.4 per cent to six per cent, and inactivity fell by 0.6 per cent to 21.2 per cent - both higher than the national average of 0.6 per cent and 0.1 per cent respectively.

Birmingham had the second highest estimated unemployment rate in the country between October 2019 and September 2020, at 7.8 per cent.

Nationally, the number of people reporting that they have been made redundant in the past three months remained at a record high.

Job vacancy recovery also slowed, despite being up by 81,000 between October and December, the number of job vacancies were still well below pre-pandemic levels.

Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce commented that despite unprecedented levels of business support from Government during the pandemic, support “is simply not enough ” to help businesses to stay afloat.

He called for further, urgent aid from Government in order to avoid further job losses.

Mr Faulkner said: “These figures are a grim reflection of what we 're hearing from many local businesses, namely that while the Covid support measures provided to date have been unprecedented, 10 months into the start of the pandemic that support is simply not enough to enable businesses to retain many jobs and to stay afloat.

"More support is now desperately needed if we are to avoid losing more businesses- entirely viable, tax paying local employers - from our economy.

“The sharp rise seen in local unemployment remains subdued by the coronavirus job retention scheme in particular, but with remaining costs of employment and other overheads piling up, many business leaders are being forced to consider redundancies in order to weather the current climate.

“If the Chancellor 's intention is to wait until the March budget to announce further measures we must be absolutely clear: that is not soon enough. Further support, as set out in our Back Our Businesses report, is needed immediately.

“Leaders and managers across the Greater Birmingham business community are currently under an incredible amount of pressure as they try to do the best thing for their people. In many cases, this also includes facing new challenges, such as trying to support parents and carers with increased responsibilities, and employees struggling with increased mental health concerns brought about by the pandemic.

“The Chamber 's annual Growth Through People campaign will be exploring best practice approaches to these challenges and more throughout March, and I highly encourage interested readers to get involved. ”

Saira Demmer, chief executive of Chamber patron SF Recruitment, said: "The true impact of the Covid-19 pandemic on business is starting to becoming apparent now more than nine months into the crisis.

"The jump from 4.6 per cent to 6 per cent unemployment is the largest since the pandemic began and is the result of businesses spending much of the second half of 2020 making permanent changes to the way they operate, which will allow them to operate more efficiently and be able to absorb shocks better in the future.

"In 2021, we are seeing a return to growth as companies rebuild in a different direction and so we would expect this level of unemployment to flatten out, if not improve over the course of 2021.

"Overall, it is still noteworthy that the current rate of unemployment sits well below the level seen in the aftermath of the financial crisis, suggesting a robust underlying economy."

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