Employment Background
Last updated: April 2023
The UK economy in recent years has undergone a series of large shocks driven by the Covid-19 pandemic, the war in Ukraine and Britain's exit from the European Union.
The Office of Budget Responsibility has recently forecast that UK households are set to suffer a 7.1 per cent decline in living standards over the next two years. This represents the largest decline in living standards since records began, in 19561. As a result, per-person income will remain below its pre-pandemic level even by the end of 2027-281 and in fact average real wages - that is, wages after accounting for inflation - will not regain 2008 levels until 20272.
Further analysis by the Financial Times and the Resolution Foundation indicates that UK workers are forecast to endure the longest period of wage stagnation for almost 200 years2 and that typical households will experience a permanent reduction in incomes of up to 3.7%3.
It is important to note that government support is expected to limit the scale of the recession the UK faces over the next two years while a healthy labour market means unemployment is set to rise less than is typical in a recession1.
Given these developments, it is important that the Jamat is prepared for significant challenges and stresses to household incomes and wages in the near future.
Practical steps to address these challenges
The first step for all working murids is to take stock of your current situation. As an employee, you should consider the following questions:-
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Has your employer been open about their ability to withstand the recession, or about any alterations to their recruitment and progression plans?
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Have you honestly assessed how secure your future is with your employer?
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Do you have enough savings or an alternative income to carry you through a period of unemployment, should that situation arise?
Now is the time to prepare yourself, not only for potential redundancy, but for advancing your career prospects in an environment of higher inflation, higher taxes and greater job competition. As such, all employed murids should at least do the following:-
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Ensure your CV is up to date, presentable and in a format acceptable to your particular industry. Check out AKEPB’s guide here
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Establish at least a good, professional presence on LinkedIn which includes a sizeable & relevant network. Review AKEPB’s three-part guide for assistance: Part 1, Part 2, Part 3
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Practise your interview technique to ensure you are prepared, even at the last minute. Click here for AKEPB’s guide
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Familiarise yourself with the online portals relevant to your industry as they can vary greatly in terms of quality and usability
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Reach out to your personal and professional network; get to know people and make connections through friends, colleagues and family who might be able to connect you to people they know and point you in the right direction
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Honestly assess your skills, both hard and soft. Are your skills up to date and in demand? Are you prepared to upgrade your skillsets if needed? Do you know how to?
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Be prepared to consider alternative roles or adjacent sectors should the need arise. Certain roles and sectors can continue to grow, even in a recession. You should make yourself aware of these niche resilient & growth-oriented areas
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Are you ready and able to climb the ladder in your company? This may be the only realistic way to increase your household income and thereby protect it in inflation-adjusted terms. Do you have the skills, knowledge, network and mindset to take your career to the next step? Is a defined pathway open to you in your current company?
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Consider an additional household income. Are there others in the household who could contribute, without giving up their important responsibilities? Are you or others able to take on additional side incomes from other sources of work?
Specific strategies based on your stage of career
Aside from these general strategies, there are a number of things murids can do in specific situations, such as the following:-
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Unemployed: Often the first step is to do whatever you can to get your foot in the door of an employer. This means you should consider
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Internships and work experience
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Upskilling and reskilling, often via government-backed training or apprenticeship programmes which provide an income while you learn new vocational skills
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Part time, temporary or freelance work
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Different sectors and roles to those initially targeted and which may not be the long term goal
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Young and recent graduates: employers are now demanding more experience when applying for positions and therefore the competition is tougher. You should consider
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Work experience and internship opportunities during your studies, not just after studies are completed
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Apprenticeship opportunities
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Certain sectors will likely be more resilient during an economic downturn such as green energy, healthcare and certain areas of technology
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Mid-career: your industry and job search skills may have fallen behind and your professional relationships may have atrophied. You should consider
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Taking advantage of any training, re-skilling and upskilling opportunities both inside and outside your current employer
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Using opportunities to build and re-invigorate your professional network including online such as LinkedIn and offline such as face-to-face events
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Make it clear to your existing company you’re willing to progress within the firm and to undertake training and additional responsibilities for this purpose
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End-of-Career and Seniors: while government pensions will rise in line with inflation, we cannot be certain of this for the long term. We also may need to provide for unexpected future costs such as private healthcare and carers. Finally, our life expectancy is expected to keep increasing, putting a further strain on savings and pensions. As such, murids at this stage of their careers should consider:
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Extending their retirement age for as long as possible and is comfortable
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Consider re-entering the workforce, perhaps on a part time basis
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Consider low-investment side incomes such as online selling or renting spare rooms in the house
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Self-employed and Consultants: there have been multiple changes announced regarding IR35, during both the mini-Budget under Chancellor Kwasi Kwarteng and via background documents in the autumn statement under Jeremy Hunt. While it would appear that pre-existing IR35 rules remain in place, self-employed murids should seek professional advice on this issue if it affects them.
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Employers: any employers facing the prospect of having to reduce staff, should be aware of the legal requirements related to redundancies and should consider the potential goodwill and loyalty derived from treating staff well during a downturn. Employers should also be aware of the changes to the National Living Wage from April 2023 onwards.
Where you can go for support
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Network through joining IPNBA (ipnba.co.uk) and find other Ismailis in your industries
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Learn about your skills and match them to potential careers
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Speak to a careers advisor through the National Careers Service: 0800 100 900
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Find training including government funded or subsidised courses - https://skillsforlife.campaign.gov.uk
As a reminder, AKEPB offers confidential one-to-one support for Jamati members. If you or anyone you know requires assistance, please reach out to us in confidence at [email protected] or contact any of our Board members.
Thank you and Ya Ali Madad.
AKEPB
References