Disappearing jobs

With every recession comes job cuts, but are some roles lost forever as the creative destruction of economic cycles rolls on?

by Alexander Garrett
Last Updated: 09 Oct 2013

When the Comprehensive Spending Review takes a knife to public spending this autumn, one consequence is likely to be far fewer recruitment ads of the 'Inclusiveness Officer' or 'Putting People First Programme Manager' variety appearing in our newspapers. Such nebulous job titles, tinged with political correctness and often offered by local authorities, have been the butt of Conservative criticism in recent years, and are likely to be among the easiest casualties in the cull of public sector jobs.

Whether they will be the only casualties of the economic slump of the late noughties remains to be seen. The recession and the preceding financial crisis have already resulted in swathes of jobs cut over the past two years. Some 15,000 estate agents were estimated to have lost their jobs by the end of 2008; tens of thousands of jobs have been cut in financial services over the past 12 months; and manufacturing and construction are among sectors that have been savagely hit.

But what long-lasting effects will the recession have on the jobs market? Are there occupations already in long-term decline, for which the downturn will provide the coup de grace? And what about the jobs that sprang up during the spending boom years, the buy-to-let mortgage brokers and overseas property specialists: will they now disappear as quickly as they came?

The consensus among those who study employment patterns is that recessions, through their cyclical nature, don't transform the job market in their own right, but accelerate trends that were already there. Add to this the burst of innovation that often accompanies austere times and conditions are right for the kind of creative destruction that economist Joseph Schumpeter favoured. Job destruction can be a good thing after all, renewing and reinvigorating an economy.

Mark Spilsbury, chief economist of the UK Commission for Employment and Skills, says: 'The labour market is hugely dynamic. Jobs are always changing and being re-invented - it's not something new.'

One effect of recession, he says, is to 'drive out companies that are behind the times'. The long-term forces shaping our labour market are the shift in industrial balance from manufacturing towards services, automation through technology, and globalisation that prompts companies to move employment to countries where workers can be paid less.

But some job losses result directly from the fall in business during a recession and may be only temporary. 'In the case of estate agents, their numbers fell because transactions fell off a cliff,' says Spilsbury. 'The long-term question is whether we will need as many estate agents as we used to.'

A picture of which jobs were declining fastest before the recession is given by Labour Force Survey figures for England from 2001 to 2009. The biggest fallers include industrial and manufacturing jobs such as assemblers of electrical products and vehicles, metal workers, tool makers, sewing machinists and printers. Alongside them are typists, telephonists and a variety of sales roles, from telephone sales to roundsmen and credit agents.

Jim Hillage, director of research at the Institute of Employment Studies, says: 'These can generally be explained by the process having changed, or the jobs having been shipped overseas. In the case of printing or typing, we can often do them for ourselves through our own computers; while garments and textiles is an example where most of the business has moved abroad.'

In the case of sales and distribution, behaviours and buying patterns have simply changed, he says. 'For example, you have far fewer people driving round in trucks and selling to stores, which is the role of the roundsman.'

One of the biggest areas of change has been in the office, where the traditional roles of filing clerks, secretaries, typists and telephonists have all been disappearing over a prolonged period. The typing pool was among the first to go with the arrival of the PC, as managers learned to produce their own documents. By 2001, only 36,000 were left in England, and nine years later that had shrunk to 15,000. Secretarial jobs held out for longer, according to Katy Nicholson of recruitment consultants Reed Executive, but nowadays they are also in short supply. But she points out: 'The actual administrative role has not disappeared; in fact, demand is growing for positions that include many of the roles of a PA or secretary.'

Although the classic executive PA is still clinging on - especially to the more traditional boss who expects to have emails printed out on his desk - new administration roles have emerged requiring the ability to carry out a wide range of tasks from producing presentation slides and spreadsheets to managing IT and even payroll in smaller organisations, Nicholson explains.

Angela Baron, an adviser to the Chartered Institute of Personnel and Development, says this is part of a much bigger change. 'Roles are becoming a lot more dynamic. Organisations are looking to build capacity that is flexible, so they can shift the work around when they need to.'

The extent to which all these trends have been accelerated by the latest recession is in any case questionable. The pattern of job losses during this recession has been quite different from that of previous recessions, many observers agree. Steve Overell, associate director of the Work Foundation, says: 'The interesting thing about this recession has been that output fell very fast - by 6% at the bottom - but employment didn't fall at the same rate.' The reason, he believes, is that 'employers have learned the lesson of previous recessions: that if you cut too quickly, you are in a poor position to recover when demand comes back'. During the recession of the early 1990s, whole layers of middle management were cut out from companies; the role of general manager was particularly targeted.

Nicholson at Reed says: 'We've seen employers be far more innovative in trying to keep people during this recession, through cuts in hours, cuts in salaries, sabbaticals and so on. What it's really proved is that people's skills are often very specific to the organisation: if you've nurtured and developed people, you can't afford to get rid of them lightly.'

This time, says Overell, employees themselves were more willing to make sacrifices such as pay cuts to keep their jobs. And although that may not have saved those at the sharpest end of the downturn, nor in the longer term those whose jobs are at the mercy of the much greater forces of technological and economic structural change, it has spelt a reprieve for many in less exposed positions.

A number of the occupations that were predicted to be in mortal danger have proved surprisingly resilient. Take intermediaries, such as travel agents, insurance brokers and even estate agents (present travails aside). A decade ago, when ecommerce took off, it was widely forecast that these roles would be made redundant as people booked services for themselves via the internet. But Jim Hillage of IES says: 'Broadly speaking, that group has expanded in numbers over the past 10 years. If you take travel services, what's happened is that the volume of activity has expanded far faster than expected. You may have fewer travel agents, but you have people involved in new occupations such as flight bookers; the numbers have remained broadly static, although they have a smaller share of the market.'

But while employment in the private sector operates as a market, following the dynamics of supply and demand, and re-inventing roles to meet changing needs, the public sector is different. The jobs market is determined by a variety of factors including political choices and a degree of occupation engineering, as well as the basic needs of the population.

Nobody can doubt that public services are about to take the brunt of job losses in the coming months, but where the axe will fall is less predictable. 'The middle-tier skills may be the ones that disappear most,' says Baron. 'They will want to protect the front line and you always need strategic leadership. I think bodies will be looking to increase use of shared services such as record-keeping and payroll; everything that isn't front-line will be up for grabs.'

And some of the frontline jobs that have grown the most during the public spending boom may also be under threat. Teaching assistants doubled in number over 10 years; however, Steve Overell of the Work Foundation says: 'We've got used to having a teacher plus an assistant in every class, but will that continue?'

Most public sector roles such as doctors, nurses, teachers, refuse collectors or social workers are protected as they provide essential services, but we could find ourselves with fewer police and members of the armed forces; and non-essential services like street cleaning could be cut back drastically if things get bad enough.

On the whole, the changing nature of the jobs market could be seen broadly as a positive development, says Overell. 'It's easy to worry about crap jobs taking over from good ones, but in reality highly skilled jobs are growing fastest,' he points out. The highest job growth in recent years has been among high-skilled occupations classed as professionals, managers and associate professionals.

'The drive must be to create more "value adding" jobs, where value is created through innovation or creativity,' says Baron. Roles like assemblers, on the other hand, are exactly the kind of positions that can be easily offshored.

There are concerns, though, that Britain's jobs market could become polarised between a minority of highly skilled jobs at the top and a large number of low-skilled people at the bottom, providing the services needed by the elite. In such an 'hourglass' scenario, it is the middle-ranking, middle-skilled jobs that would be mainly lost, as overseas competitors make ever greater inroads into our employment market.

However, Andrew Curry, a director at trends and futures consultancy the Futures Company, takes a more contrarian perspective. 'We take a strong view that there will be energy shortages and higher prices over the next decade and this will have a number of consequences, one of which will be that companies will start to think what they can do closer to home. So there may actually be more assembly done locally. We could also see more food produced closer to home, which would mean more people working in agriculture after years of decline.'

As the dust settles from the recession, what does all this mean for tomorrow's job hunter? Two simple conclusions are that tomorrow's jobs will be different from today's; and that the more highly qualified you are, the more options will be open to you. And selling buy-to-let mortgages or pinning your future on becoming a social inclusion officer might not be such a bright idea.

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