How Might A Recession Affect The Jobs Market?

The passing of the Queen and the royal succession might have knocked the grim economic news off the top of the news agenda for a short time, but the fact remains that the UK still faces high inflation and the Bank of England has predicted a recession, starting late this year and running through 2023.

That raises the question of what the prospects may be for those seeking Web 3.0 jobs in the months ahead. Will there be a large increase in unemployment, including a lot of existing employees in the digital sector losing their jobs? Will there be far fewer vacancies in the sector? Will the two factors combine to make getting a job far harder?  

On the other hand, more optimistic questions might be asked: Will skill shortages mean there are still many opportunities? Might the recession impact much more on other areas of the economy? Could post-Brexit labour shortages ensure skills in some areas remain scarce and thus limit the competition for certain roles?

The first thing to note is where we start: The latest official figures revealed 75.4 per cent of the UK population aged 16-64 is in work, which by the standards of comparable statistics kept since 1971 is still towards the top end, if not a record. 

While this level of employment dipped by 0.2 per cent between July and September and is still a little below pre-pandemic levels, the actual number of unemployed also fell by 0.2 per cent. 

That reflects a reduction in the size of the workforce alongside the fact that, at 29.7 million, payroll employment is at a new record high while the unemployment rate, at 3.6 per cent, is at its lowest since 1974.

This means at present the job market is tight and unemployment is low, so while the Bank of England forecast is for unemployment to start rising from 2023, any impact a recession will have will need to be very large to flood the job market with lots of candidates seeking a new role after redundancy.

If unemployment were to rise sharply, that still does not mean people should put their job ambitions on hold. Even in a recession there will be lots of vacancies out there, because not everyone who leaves a job will do so because of redundancy; there will also be retirements, sackings, career change decisions, death and illness, while some firms will defy the downturn to grow.

The other factor to consider is that some sectors are far more vulnerable to recession than others. IT and tech jobs are among the safer ones because people need a fully-functioning digital realm to be able to operate their businesses and even carry out a lot of functions in the home. 

Indeed, the transformative effect that the web and technology has had on life has become more and more evident in recent years and that is likely to go on growing as areas like artificial intelligence and cryptocurrency become a growing part of normal life and business.

So if the UK does indeed slide into recession this autumn that is no cause for despair. There will still be lots of potential jobs out there and every reason to keep up your search.