Half of employers still anticipate redundancies when furlough ends, survey reveals

27 May 2020 By Francis Churchill

People Management research also finds vast majority using the job retention scheme have done so for staff they would otherwise have had to let go

Nearly half of employers that have furloughed staff still anticipate having to make redundancies when the government’s job retention scheme comes to an end, a poll of HR professionals has found. 

In the survey of more than 500 People Management readers about their plans to return people to work, 42 per cent expected to make a limited number of redundancies when the furlough scheme ended – on top of any redundancies they had already made.

A further 8 per cent said they expected to make a large number of redundancies.

Commenting on the findings, Rachel Suff, senior policy adviser at the CIPD, said the scheme had been “an absolute lifeline” for protecting jobs, but it was inevitable some redundancies would have to be made when the scheme came to an end in October. 

Employers needed to start thinking now about what they were going to do with their workforces when the scheme finished, Suff said, warning about the impact uncertainty around this was likely to have for staff. “That is really worrying in terms of mental health and wellbeing for our nation. It’s going to have just as big an impact, if not bigger, as worries and anxiety directly about the pandemic,” she said, adding: “October really isn’t that far away.”

The People Management poll, which surveyed 512 HR professionals, found the vast majority of employers that have used the job retention scheme have furloughed staff they would otherwise have had to make redundant.

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More than half (59 per cent) said they would have made up to a quarter of their currently furloughed staff redundant if it hadn’t been for the scheme, while 31 per cent said they would have made between one quarter and three-quarters redundant. Meanwhile, 12 per cent said more than 75 per cent of staff currently on the scheme would have otherwise been let go.

Suff emphasised the importance of the furlough scheme being made more flexible, warning of job losses if support for employers was “turned off like a tap”. Chancellor Rishi Sunak is expected to announce the details of his earlier pledge to make the scheme more flexible later this week – which could include wage subsidies for workers coming back part time or on a reduced hours basis.

Of those responding to People Management’s survey, half (50 per cent) said they would take advantage of new flexibilities allowing staff to work part time while furloughed for some or most employees already on the scheme. An additional 5 per cent said they would use the scheme for the first time if this flexibility was added.

However, 45 per cent of respondents said they would not take advantage of any additional flexibility.

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