The end of furlough: what does HR need to know?

With just one day before the job retention scheme ends, People Management asked experts what next steps businesses should be taking 

Over a year and a half after it was first announced, the Coronavirus Job Retention Scheme is finally coming to an end. Tomorrow (30 September) will be the last day employers can claim financial support to pay the wages of staff who are not working.

The number of people on furlough has been steadily declining as restrictions have dropped and the economy picks up. But at the end of July figures from the Office for National Statistics showed there were still 1.6 million on either full or partial furlough, and one think tank has warned that there could still be a million on the scheme when it finally closes.

People Management spoke to people professionals and employment lawyers about what firms need to think about as the scheme draws to a close. 

Will the end of the furlough scheme lead to higher unemployment?

Ben Willmott, head of public policy at the CIPD, said there should be far fewer job losses than originally feared. 

“As the scheme comes to an end, we have record levels of job vacancies paired with difficulty finding labour in some sectors,” he explained, adding that some employers will need to work on their recruitment and retention strategies to address skills or labour shortages.

Kate Palmer, HR advice and consultancy director at Peninsula, added that some businesses have already taken steps to deal with employees remaining on the scheme including through redundancies, reorganisations and consolidation of changes made since the start of the pandemic.

She said that furlough had “fundamentally changed the way jobs are supported in the UK, and adjusting to life without will take some getting used to” but said she had observed measures to re-introduce those who have been out of the business for some time and updates on Covid-safe measures and new working practices.

Should HR offer workers coming back off furlough extra support?

Gemma Bullivant, an HR coach and consultant, said that, whether employers are bringing furloughed employees back or encouraging workers back to the office, they will need support to “reintegrate, refresh or retrain” to meet the needs of a very different environment. 

Bullivant suggested that firms need to be self-reflective and ask themselves whether managers have become more accustomed to managing outcomes rather than time employees spend at their desk. They should also consider if team size can be adjusted, what is it that employees want, whether they can enable employees to move between home and office in a way that suits them and their team, or whether there is a talent pool they could access if they changed working hours, or if they could adopt a more hybrid working pattern.

How should businesses handle post-furlough redundancies? 

Richardson advised that businesses must ensure they fully consult with staff and follow a fair process, clarifying the reason why redundancies have to be made and ensuring that staff are fairly selected.

“Businesses could consider whether pay cuts, altering hours and working arrangements may obviate the need for having to make redundancies, but for many this may not be an option,” he explained. 

It’s crucial that in any redundancy process the criteria are as objective as possible when looking at performance of staff and their contribution to the business. 

“Firms must also be conscious of ensuring that there is no bias in any scoring which could lead to claims,” Richardson also pointed out. 

Willmott agreed that if there are no viable options, as a last resort some businesses might have to make redundancies and considering all alternatives with employees will be important.

However, he did advise that businesses could consider options such as new working patterns, short-time working, unpaid sabbaticals or career breaks, which will allow firms to retain skills and secure jobs. 

No matter the outcome, he said, clear communication and meaningful consultation, as well as considering all alternatives with employees will be important.

What alternatives are there to redundancies if furloughed staff are still not needed? 

Philip Richardson, partner and head of employment law at Stephensons, said that retraining was a “good option” for businesses to adapt employee roles or responsibilities. 

“Consider whether efficiencies can be made elsewhere by looking at other costs – can people work remotely so money can be saved on premises, for instance? Can the business adapt to survive?” he explained.  

Meanwhile, alongside traditional means of temporarily managing workloads, such as layoffs, short-time working, career breaks, or using any built-up annual leave, Palmer also suggested some businesses may even go so far as to consider creating their own furlough scheme, on their own terms and internally funded.

“Staff are much more adept at working remotely, and organising themselves, than they were 18 months ago,” she explained. However, she did warn that those who have continued working where others have been on furlough will likely also have had to be more flexible in the duties they perform, because they have picked up any work not being done. 

Read the CIPD’s top 10 tips for firms considering redundancies after furlough on the CIPD website.