Q1 employment trends in the Manufacturing, Engineering, and Office Services sectors

As we step further and further away from the worst of the pandemic and its effects on the UK labour market, positivity in hiring, both across temp and perm recruitment, is rising.

Q1 has been a challenging, almost contradictory quarter – our 2nd full national lock down has coincided with a resolute jobs market with confidence in hiring in the healthcare and tech sectors, employer confidence rising in the South West and North West, and a sharp reduction in redundancy intentions.

This could, of course, be attributed, in part, to the extension to the furlough scheme until Autumn 2021 (source), however the effects of Brexit and the ongoing effects of the lockdown have been keenly felt in some sectors.

Q1 Overview

 January 2021

  • Much of the positive work done between October and November 2020 in employer confidence, job vacancies recovery and wage increasing continued, and was still markedly higher than the last quarter of 2020: “in Jan 2021, 83,000 more people were in employment when compared with December 2020; this is the second consecutive monthly increase”.


  • However, this should be contrasted with claimant counts increasing as the 2nd national lockdown came into play: “2.6 million people, including both those working with low income or hours, and those who are not working”. (Source).


  • As of January 31, 2021, over 4.7 million jobs were still on furlough. (Source).


February 2021

  • February 2021 showed small decreases in the amount of migrant workers and a general slowing of payrolled employee increases. “68,000 more people were in payrolled employment in February 2021, when compared with January 2021; this is the third consecutive monthly increase”. (Source).


March 2021

  • As we’ve moved into March, employment figures have been slightly plateauing across the working population, with a slight increase in unemployment, inactive workers and workers claiming some assistance from the government furlough scheme. However, reports state the worst of the pandemic – now a year old – have been felt by the under 25s.


The Industrial & Manufacturing Industries

  • The bounceback has begun, say certain parts of the manufacturing industry. Manufacturers have upped the re-skilling rate, opened the doors to new customers, diversified offerings and of course, guaranteed a supported workforce via the furlough scheme. However the dual effect of Brexit and another lockdown put paid to a V-shaped recovery, despite the Budget.


  • January showed the largest bounce back for temp hires, which will have sharply improved the chances of construction and unskilled and skilled labour to return to profit. However there are short to medium term manufacturing uncertainties, as factored in a report saying “over a third of businesses (36%) are still expecting to make further cuts to their workforce within the next six months”. (Source).


  • After social distancing measures forced layoffs in labor-intensive factories, manufacturers turned to automation, despite the high cost. Factories digitised controls on their machines so they could be remotely operated by workers working from home or another location. Many manufacturers have successfully adapted to this automation and intend to adopt it permanently.


  • Brexit is still the great unknown – nearly half the UK’s imported and exported manufactured goods are to the EU, and manufacturing “accounts for a disproportionate share of total exports (45%)” (Source). For all the proposed benefits of Brexit, we’re currently fighting delays and disruption.


The Trades & Engineering Industries

  • With the inclusion of many trades into the “key workers” sector of the new lock down rules, plumbers, electricians, carpenters, cleaners and gardeners were all able to return to work from January 2021. The trend in engineering still follows the positive moves in 2020 to enmesh agility, technology and sustainability into every factor of the industry. (Source).


  • Engineering roles in the essential services necessary to sustain life are seen as recession-proof, such as power generation, water supply, medical equipment, food processing, sewerage, waste disposal and recycling.


  • Roles growing in demand include data analysts and scientists, AI and machine learning specialists, robotics engineers, software and application developers, and digital transformation specialists.


  • From April, the government is offering almost 400 different free courses worth the equivalent of an A-level qualification, in subjects within trades & engineering


  • Research commissioned by BAE Systems respondents found engineering as the fifth best industry for long-term career opportunities, selected by 13%, compared to healthcare (31%) and education (20%). Nearly two thirds (63%) said they have or would consider an apprenticeship, of which four in ten (41%) cited gaining experience in the working world as a key driver.



The Office Services Industries

  • The pandemic continues to keep workforces remote and hybrid furlough-work schemes are still necessary, and the extension to the furlough scheme until September has helped many  industries stay afloat. Whilst many companies are returning to the office, many employers are offering flexible working to ease those back into office-based working, and it’s predicted that this flexible schedule will become a permanent fixture for many organisations.


  • Employers are urged to undertake a basic home working risk assessment and consider whether there are any risks which arise from the type of work which is being undertaken from home, whether it can be done safely and whether any measures ought to be put in place to protect employees from any risks identified.


  • Employers have developed systems to allow employees to take equipment from the office to satisfy this shorter-term need. Some employers are providing a (generally fixed sum) budget to employees to buy necessary work equipment for working at home, so long as receipts are provided.


  • Home working has impacted employee benefits, for example, subsidised or on-site childcare, gym membership, food and commuter season tickets aren’t being utilised which has led to some employers introduced new benefits for their employees.


  • It’s worth noting that the predicted services industries to return to revenue growth in 2021 and 2022 are, in order: Safely equipment wholesaling; Online food ordering platforms; Bicycle retailing; Online alcohol retailing and E-commerce and online auctions.



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