The UK unemployment rate has risen to 4.1%, prompting calls for the government and industry to put digital skills at the heart of the UK’s economic recovery.

In the three months to July, the unemployment rate rose to its highest level in the UK in two years, according to data from the Office for National Statistics.

By historic standards, this level remains relatively low. However, there are signs that unemployment is on an upward trajectory, with the rate rising to 4.8% in the final week of July.

Following the 2008 financial crisis, the UK unemployment rate rose to 8.1% in 2011 and had been declining ever since. Economists view an unemployment rate of 3.5% to 4% as the sign of a healthy economy.

Young people were hit the hardest by job losses, particularly 16 to 24-year olds. This is because it is the age group most likely to be working in the sectors hardest hit by the pandemic, such as hospitality.

Tech hiring also took an initial hit when the pandemic first gripped the country. Between March and April, when lockdown measures were first introduced, tech hiring activity among the UK’s top 100 technology companies fell by 31%.

However, as companies have adapted to the new normal there has been a rise in the number of IT-related job postings, as companies accelerate digital transformation projects and turn to technology for business continuity.

In July the Recruitment & Employment Confederation said demand for web designers and developers jumped by 15.% compared to the previous month.

And between June and August, the number of UK tech vacancies rose by 36%, according to data from job website Adzuna.

“As we enter another recession, much like in 2008/2009 businesses will be seeking ways to innovate, improve efficiency and ultimately reduce cost and deliver profit more efficiently,” said Bradley Coombes, co-founder of Collabz, an in-house talent company.

“Most of which will be achieved through tech innovations. So, although we will see a drop in demand in sectors such as brick and mortar retail and hospitality, tech will only go from strength to strength.”

Tech job market can build from solid foundations

This builds on a tech job market that was in good health pre-pandemic. According to a Tech Nation report, jobs across the digital tech sector increased by 40% over the past two years. Pre-pandemic, the sector employed almost three million people – nearly 10% of the entire UK workforce.

“The unemployment figures out today show that the old economy is struggling to support a nation of workers, and with the furlough scheme coming to an end next month, these figures can be expected to get even worse,” said Stephen Kelly, chair of Tech Nation.

“The tech sector has shown resilience through the pandemic and job opportunities in tech have already recovered significantly – between June and August the number of roles in digital tech grew by 36%. Tech is now the UK sector posting the highest number of vacancies after healthcare.”

However, there are fears that the overall UK unemployment rate will rise once the government’s furlough scheme ends on 31 October. Experts believe there will be a period of hardship for many workers as traditional industries struggle to adapt.

A focus on digital skills could be key to the UK’s long term recovery.

“For me the government should be using its resources to promote digital upskilling and put tech jobs at the heart of the country’s recovery,” said Coombes.

Kelly added: “We believe that now is the time to think about tech as core to UK employment, prosperity and productivity. We want to see industry and government coming together to support the essential digital upskilling of the nation through funding channelled into digital academies where employment prospects for the future are strong.”


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