As the government’s furlough scheme comes to an end this month, we thought it would be a perfect time to reflect on the Coronavirus Job Retention Scheme, what it did, and how it changed workplaces, perhaps indefinitely.
Has it contributed to helping people get through lockdown? Or has it just prolonged the inevitable at a high cost to the taxpayer? Was it too much too soon, as demonstrated by the new less generous Job Support Scheme?
The Coronavirus Job Retention Scheme is set to come to an end on 31 October 2020, with the Job Support Scheme following it immediately.
Let’s look back…
We remember when the pandemic began, and before the
Coronavirus Job Retention Scheme began. In the course of that week, before we knew what the solution from the Government looked like, we saw lots of inquiries straight away about redundancies, restructures, and layoffs. It was a very difficult and uncertain time for so many employers.
When those employers asked what support was coming from the Government, we weren’t sure, no one was! Our thoughts that the Government would maybe offer an equivalent sum to statutory sick pay, to allow employees to still have some income whilst they weren’t required in the workplace. If we’re honest, we never expected a scheme as generous as the furlough scheme was. We, and our clients, all were surprised as the nature of the scheme became clear and the extensive support available became clear.
Has the Scheme helped?
Overall, we take the view that the furlough scheme has had a positive impact on workers and businesses during the coronavirus pandemic; without the support from the scheme, many people who have been or were put on furlough during lockdown would have simply lost their jobs almost immediately. This would have had enormous repercussions on people’s livelihoods, the economy, the nation’s mental health and so many businesses as they started to reopen without their team in place.
Figures show two-thirds of 67% of furloughed staff were receiving top-up payments to their wages from their employers as well as the 80% contribution from the government whilst being furloughed. Many employers not only took advantage of the scheme to support their workforce but also went over and above to support those employees in their time of need.
Delaying the inevitable?
There is an argument that, perhaps, the furlough period just delayed the inevitable, which is, of course, possible for many.
Redundancies are becoming increasingly common and The Citizens Advice in Scotland reported a 191% increase in requests for redundancy advice since lockdown. People have been paid for four to five months, only to lose their jobs anyway. With the new Job Support Scheme only supporting those roles which are “viable”, we can’t help but wonder what the point was of supporting unviable jobs before? Surely, to some extent, the new Scheme is undoing all the good work the furlough scheme did of supporting those companies who aren’t as profitable or “viable” at the moment but could have a great future post-pandemic.
But, let’s think about the particular industries which were completely shut down before; hospitality, events some retail, tourism; all of these industries can and will hopefully recover, and therefore the furlough scheme, and indeed the Job Support Scheme, should have made it possible for some companies to retain their employees during these recent times of uncertainty.
Ultimately, there have still been wages paid, at least until now, that without the Scheme would not have been paid before, at a time when those employees wouldn’t have been able to find other work if they had been made redundant.
As an incentive for employers to retain furloughed staff once the scheme has ended the government has introduced the furlough bonus scheme which may entice employers to retain staff who would have otherwise been made redundant. However, it remains to be seen if this scheme will work in practice as although it is a great incentive for employers, many businesses have expressed their concern with finding the money to keep staff employed until they receive the payment for the bonus. People can claim the bonus alongside the Job Support Scheme.
We have created a blog that explains the furlough bonus scheme to answer any questions you may have; you can find this blog here.
Problems returning from furlough
We have noticed lately that there is definitely a disconnect and some difficulties with staff returning from furlough. That may be a difficulty to resettle, but we think it also may come from a feeling of expendability and a lack of confidence. If only some staff were furloughed, and others kept on, without good enough communication, those who were furloughed may be concerned about what they contribute and whether their role is, in the long term, at risk in the current financial crisis.
We’ve also seen some internal disconnect and resentment between those who were furloughed and those who were not. Commonly, those who “stayed behind” and worked, sometimes harder than ever, resent those who were furloughed for their “time off”. By the same token, those who were furloughed can sometimes be jealous of those who remained and got an opportunity to be helpful and prove themselves.
All of this means that it is more important than ever to communicate with your employees and make sure that they are unified once again as one team. Communication, but also perhaps (socially distanced!) social events might help with this issue, and will also give employees something to look forward to and a much-needed boost to everyone’s mental health.
So, in our view, the furlough scheme saved employers in their time of need and allowed certain industries to continue to exist and not collapse during the pandemic. It’s helped employees who would have been left with no salary and no income at all, which would have been the case for so many. Whether that support has or will continue with the Job Support Scheme, has yet to be seen.
Let’s talk about the new scheme. The first attempt at the new scheme had so little taken up the government created a new scheme.
We have created a blog here on the details of this new scheme but essentially, due to different tiers of restrictions in different regions, the government has two types of ongoing support.
One for those businesses who are open and one for those who are forced to close due to restrictions.
The issue is that the suppliers and contractors of those businesses who are forced to close miss out on any support too. Not to mention the events and arts industry which has been closed since March, this doesn’t help them as they have no income so cant contribute to keeping their staff going and they have no work to give them so can’t use the open scheme. The closed scheme doesn’t apply to them either as they aren’t closed due to tier three restrictions! Many people in these industries may well lose their jobs. If they haven’t already in the coming days.
Hopefully, those employers and employees can now go on to thrive, but we expect it’s going to be a rocky and long road ahead for many wondering what to do next with the ever-changing restrictions and decreased support as we go into the darker months this is bound to impact on many peoples mental health.
By Alicia Collinson and Jodie Hill