It’s no surprise that the coronavirus pandemic is having a brutal impact on the UK’s job market — but as fears of a second national lockdown grow and the government winds back the financial support it offers to businesses, it’s the most vulnerable workers who are being hardest hit.
The latest figures from the Office for National Statistics (ONS) show that unemployment in the UK grew by 62,000 to 1.4m people in the three months to July, a rate of 4.1%.
However, some groups have been impacted more than others. Those already on low incomes prior to the pandemic, those working insecure hours and younger workers have all been disproportionately affected, due to being more at risk of reduced hours, furlough and redundancy.
For example, the unemployment rate amongst those aged 16-24 was 13.4% in May and June this year, with 156,000 fewer young people in work compared to the previous quarter.
Why is this? Young people are more likely to work in some of the hardest hit sectors, such as hospitality (where 80% of jobs have been furloughed) and retail (1.6m jobs furloughed). They are also more likely to have had their pay cut during the pandemic, with 35% earning less than they did at the beginning of the crisis, according to research by thinktank the Resolution Foundation.
It’s not just young people struggling, but also those on low incomes and in the gig economy. A person earning less than £151 per week in February was three times more likely to be furloughed or have their hours cut than someone earning more than £600 per week, according to a study by the London School of Economics. The financial impact of reduced work and lower income means many of the most at risk in society are struggling to budget for housing, bills and food.
So how can the Sifted community help the most vulnerable employees in our workforce through the pandemic and build on the government’s ‘digital Dunkirk’ plea?
Covid-19 has created a huge economic shock. Millions face severe threats to their job security and household finances.
The opportunity for innovators
As millions of workers face up to a prolonged period of unemployment, navigating the labour market is about to become even more challenging. Some online job marketplaces are becoming more specialised — think UpWork for freelancers or Honeypot for developers — but for workers with a more eclectic skill set, finding a good fit remains hard.
This also extends to edtech platforms. Automation and the mismatch between the skills people have and the skills organisations need has long been an issue for business leaders, but the pandemic has thrown this into sharp focus. In a saturated marketplace, identifying and matching skills to jobs is becoming an integral part of the employment journey. Platforms that define and match skills, provide vocational training or challenge traditional classroom-based learning are likely to be in demand, both from employers and employees.
The economic uncertainty caused by the pandemic means more people are struggling to control their finances. The success of startups in digital banking (Monzo), financial planning (Squirrel) and mobile payments (SumUp) shows there is high demand for new ways of managing money, but how many fintechs are able to scale and meet the challenge of a new, mass audience which needs faster access to their finances?
The Rapid Recovery Challenge
It’s against this backdrop that global innovation foundation Nesta is launching a £2.8m scheme to encourage innovative startups to support vulnerable workers through the financial challenges of the pandemic.
Up to £475,000 is available to successful applicants.
The Rapid Recovery Challenge is a 12-month programme looking for companies and charities from anywhere in the world — global or hyper-local — which can provide innovative tools to help those worst hit by the pandemic in the UK access jobs and financial support. Through this challenge prize, up to £475,000 is available to successful applicants, culminating with two winning projects being announced in September 2021. Organisations are supported throughout the challenge with a blend of funding incentives alongside workshops and one-to-one mentoring.
To mark the launch of the challenge, Nesta revealed the results of a survey of 2,500 people across the UK. It found that young people, low income workers and those in the gig economy were twice as likely to have reduced hours compared to stable workers, with 32% saying a second lockdown would send them over the edge financially.
“Covid-19 has created a huge economic shock. Millions face severe threats to their job security and household finances, and we know that low-paid workers, people in insecure roles and those under 25 will be hit hardest. I’m looking forward to seeing the range of solutions innovators develop to address these issues and support those whose jobs and finances have been most impacted by the pandemic,” says Ravi Gurumurthy, Nesta chief executive.
Applicants must have a working prototype that has been pilot tested with at least 1,000 users. Entries are open now, closing on October 26.
Find out more about Nesta’s Rapid Recovery Challenge and apply here.