How has the pandemic changed who works in the UK?

One year after the UK went into lockdown, with whole sectors shut as people stayed at home to stop the spread of coronavirus, data now shows some of the impact on the UK economy and labour market. While lockdown is set to continue for several more months, schools have now reopened and Office for National Statistics data shows more than half of workers travelled into their workplace at least once a week in mid-March. In the three months to February, the number of people on payrolls rose steadily and unemployment slightly fell – but the ONS has warned that the brunt of the job losses in the past year have fallen on the young, frequently employed in sectors badly hit by the pandemic.

The past year has been a time of upheaval, not just due to the pandemic, but also because the UK ended 2020 in a new relationship with the European Union, after striking the trade and cooperation agreement that came into force as the post-Brexit transition period ended on 31 December.

Some analysts had suggested a significant fall in the working population born outside the UK during 2020, particularly those from the EU. However, with the collection of official migration data significantly disrupted by the pandemic, estimates have varied – the latest ONS data suggest the number of non-UK-born employees fell by the end of 2020, with EU nationals more likely to have left employment than UK-born workers or non-EU nationals.

The LinkedIn Workforce Report shows that between January 2020 to March 2021 there was a shift in who was working in the UK, with more people leaving for the EU than arriving from there. It also shows how hiring has fluctuated, particularly in those industries closed for much of 2020.

Taken together, LinkedIn hiring data and analysis of the movement of workers in and out of the UK shows that those industries hit most by Covid-19 restrictions – particularly recreation and travel – have seen higher net outflows of workers and have not yet seen hiring recover as much as other sectors.

Optimism on the hiring front?

In the first two months of the year, hiring overall appears to be on the up. While still below 2019 levels, hiring in February 2021 was up 2.4% on January’s figure, per LinkedIn data. And, according to the ONS, vacancies have remained stable throughout the most recent lockdown from November and are slightly up on the quarter – though still significantly below pre-pandemic levels, particularly in arts, recreation and accommodation.

According to LinkedIn data, recreation and travel hiring remains significantly down year on year, though the industry has seen one of the biggest spikes in month-on-month hiring growth in February, up 34%. Other sectors that have not yet recovered to pre-pandemic hiring levels include retail and entertainment – down 14.7% and 12.2% year on year, respectively. However, in an indication of how Covid has shaped the UK labour market, hiring in healthcare, public administration and transportation and logistics is up year on year.

Another sign of the impact of lockdown on the leisure sector is the slower recovery of London: of the 700,000 drop in employees on payrolls since the start of the pandemic, more than half worked in hospitality and over a third of losses were in London, according to the ONS. This so-called “London lag” has been visible since at least November, with Matthew Mee, director of workforce intelligence at research firm Emsi telling the BBC that the high take-up of furlough in London and rise in claimant count suggests the “restrictions since March may well have had a greater proportionate impact on the capital than on other regions of the country.”

Migration in and out of UK

LinkedIn data from January 2020 to March 2021 that looks at members changing their profile locations suggests some shift in net migration patterns over the period. This data is explored in aggregate and expresses the ratio of people changing their location to the UK from elsewhere to those going from the UK to specific destination countries.

Over the course of the year, more people were leaving for EU countries than were coming to the UK from the EU, and that has accelerated in 2021, with net migration from the EU to UK down 24% in January 2021 year on year. In contrast, migration to the UK from non-EU countries was a net positive over the same period.

Notably, from March 2020, when Covid restrictions started to be introduced, the net outflow to EU countries increased, with France and Germany becoming the top two destinations for people leaving the UK.

When it comes to why people tend to move, “in general, if you look at migration research, the economic drivers and family networks, those types of things tend to be more important than political issues, which tend to be lower down the list of things people cite when they talk about why they move,” Madeleine Sumption, director of the Migration Observatory at Oxford University, tells LinkedIn. “My expectation would be that if EU citizens were leaving in the last year and a half, it's likely to be because of the economy and Covid.”

Over the past year, migration from the UK to countries outside the EU has shifted slightly. In January 2020, Australia was top of the net outflow list, with more people going from the UK to Australia than vice versa. However, by January 2021, Germany had become the top destination, and other European countries had also risen up the list of countries where the UK saw a net outflow of professionals. Globally, Covid started having a major impact on international travel from March last year – notably, Australia closed its borders to all but its citizens and permanent residents and eventually restricted the number of arrivals each week.

What about crossing the pond? In Jan 2020, more people moved from the UK to the US than the other way around – but since last March, the flow has reversed, making the US the fourth highest net-gain country for UK migration, behind India (consistently the largest net inflow for the UK), Nigeria and South Africa.

The sector-specific impact of Covid-19 in the UK

Looking at changes by sector, the data shows most industries saw a net outflow of professionals to the EU from January 2020 to March 2021. However, there were some sectors that saw an increase in workers entering the UK workforce from non-EU countries, particularly software and IT, finance and corporate services.

Over the past decade two sectors that have been particularly important in terms of migration to the UK from outside the EU are “the IT sector, particularly from India, and in the last two or three years, the health sector,” says Sumption. “EU citizens are distributed across the skills spectrum, but they're over represented in lower wage jobs… and retail and hospitality employ a lot of EU citizens. In London, EU citizens are heavily represented in construction as well and we also see quite a lot in research too.”

While LinkedIn migration data does not tell us where people had been prior to their latest job – for example, whether people are moving abroad or are EU-born workers returning – there is some alignment with estimates put forward by the Economic Statistics Centre of Excellence, which found that job losses in sectors with non-UK workers may have “manifested itself in return migration rather than unemployment.”

LinkedIn data shows that some of the industries that saw a net outflow to the EU grow the most include those particularly hit by the pandemic, such retail and recreation and travel, which also includes hospitality. These sectors are likely to have had relatively higher proportions of EU citizens in the workforce, Migration Observatory indicates.

Hospitality was one of the worst-hit sectors in job losses in 2020, with the UK’s lockdown measures only allowing for some reopening from July. And according to the data, the UK saw a net loss of workers from the recreation and travel sector globally until August, and a continued net outflow to the EU since.

Permanent pandemic shift?

While it’s clear that the UK’s workforce has seen a short-term change due to the impact of the pandemic, in some ways it has accelerated shifts that were happening, in remote work, automation and ecommerce. Hiring data indicates that transport and logistics have seen faster hiring recovery, likely in part due to the rapid rise in online shopping in the past year – a trend likely to continue as more people work from home more often. Equally, those areas of the economy that remain closed are likely to see shifts as lockdown relaxation measures progress.

When it comes to migration, researchers await clearer data to see the impacts of the past year of change. “In non-Covid times, we generally see the impact of a policy change in the next year's data, or the next six months of data,” says Sumption – but with Covid’s economic impact, getting the fuller picture of the UK labour market is likely to take longer.

Methodology

The LinkedIn Hiring Rate (LHR) is the count of hires (LinkedIn members in each industry who added a new employer to their profile in the same month the new job began), divided by the total number of LinkedIn members in the UK. By only analysing the timeliest data, we can make accurate month-to-month comparisons and account for any potential lags in members updating their profiles.

A migration instance is defined as a member changing their location on their LinkedIn profile. This analysis calculates the inflow-outflow ratio (number of inflows to a country for every outflow) for countries. Countries are then ranked by magnitude of the net loss or gain between 16 March 2020 to 16 March 2021, and compared with a baseline month of January 2020.