PROSPER MAGAZINE: DIGITAL EDITION
FURLOUGH FEAR - TERM COINED FOR BIGGEST WOES IN CORONAVIRUS
Results from a UK survey on so-called ‘furlough fear’ released last month exposed a spectrum of concerns from furloughed staff that extend beyond the financial.
The report, titled ‘Furlough Fear: Understanding the Experience of Furloughed Staff’, was carried out by leadership coach Janine Woodcock FinstLM.
Compelled to develop the research while working with furlough decision-makers from a variety of industries who, while well-intentioned, Woodcock reported were solely focused on the economic impact of their decision to furlough.
90% of workers want ‘flexi-furlough’
“Their assumption was that furloughed staff would find receiving 80% of their salary (capped) without having to work extremely appealing”, said the leadership coach, “Yet, in my conversations with those being, or about to be furloughed I was hearing deep concerns such as loss of connection with teams and colleagues, loss of purpose and, of course, fear of future redundancy”, she said, “This is how I came to coin the phrase ‘furlough fear’ at the beginning of April.”
The report found that nearly 80% of those surveyed expressed significant fears around being furloughed. While naturally, being made redundant is a primary focus, other concerns that register highly with respondents are a loss of connection with the company at 63% and a loss of connection with team and colleagues at 60%.
It also discovered that whilst 8.77% of respondents considered childcare to be a major influence on their anxiety, 17.54% were concerned about their finances and 19.30% considered the damage to their mental health to be considerable, by far the biggest concern to 28.05% of those polled was the concept of future work availability.
Half of employers still anticipate redundancies when furlough ends, survey reveals
Research carried out by People Management, the UK's leading HR media brand, found that the vast majority using the job retention scheme have done so for the 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 survey, employment lawyer and Chamber Board member, Simon Bond from Bond Legal Ltd, said that the findings showed the importance of the government’s Coronavirus Job Retention Scheme (CJRS) but warned that it may have delayed rather than prevented job losses.
Simon said, “Many employers have delayed implementing redundancies on the basis that employees could be put on furlough leave safe in the knowledge that the government would pay a proportion of their wages.
“Indeed, it would be arguably unfair to make redundancies at the moment when a viable alternative (namely furloughing) exists. However, the Chancellor’s announcement that the CJRS will end on 31 October, is bound to focus employers’ minds on whether and when to make redundancies”.
Meanwhile, 59 per cent of employers reported that 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 up to three-quarters of staff redundant.
The Chancellor has announced a number of events which will have the effect of slowly winding down the CJRS. For example, from 1 July 2020 furloughed employees will be able to work part-time (currently furloughed staff can do no work at all). Employer contributions to the cost of CJRS will increase on 1st August 1st September and 1st October.
On these changes, Simon told Prosper, “The Chancellor is trying to wean employers off CJRS and wind down the Scheme in a measured way. This means that many employers will need to make some big decisions in the coming months – whether to reorganise, whether to make redundancies or whether to try to re-establish their business as it was before the CJRS came into effect. Whilst these options might be unsettling, they also present an opportunity for businesses to reshape themselves in readiness for the world after COVID-19”.
Furlough Figures Across the West Midlands
In figures released earlier this month on 11th June, it was reported that 400,000 West Midlands jobs have been supported by Government schemes since the Coronavirus crisis began – around one-quarter of the workforce.
The official figures showed that 413,000 workers in the seven boroughs of the West Midlands Combined Authority (WMCA) area have received wage support, with 330,400 staff furloughed and 82,600 accessing the self-employed assistance scheme.
Published by HM Revenue & Customs they show 142,800 people have been furloughed through the Coronavirus Jobs Retention Scheme in the Black Country, including 40,100 in Sandwell, 39,800 in Dudley, 33,600 in Walsall and 29,300 in Wolverhampton.
Across the four boroughs, a further 35,300 self-employed workers have had their wages supported through the Self-Employment Income Support Scheme, receiving £221.2 million in payments up to May 31.
It means seven out of every 10 self-employed workers have applied for support since the start of the scheme.
Things Can Only Get Better – And They Must
Dr Steven McCabe, Associate Professor at the Institute of Design and Economic Acceleration and a Senior Fellow at the Centre for Brexit Studies, told Prosper, “There’s been much praise for the financial assistance the Chancellor has introduced. These were, at the outset, intended to be more temporary, and less costly, than has proved to be the case.
“According to the Office for Budgetary Responsibility, (OBR), the costs of the furlough – job retention scheme, will cost, by the time it ends on October £60 billion.
“Though less than the £84 billion thought necessary, that’s still a hefty bill to be paid by future tax revenue that can only be achieved through future economic activity.
“The ‘V’ shaped recovery Mr Sunak hoped for seems no longer possible,” said Dr McCabe, “There will be a much slower return to normal economic activity and worryingly, there will be a far greater loss of employment than was projected. Many economic analysts suggest that the end of furlough could produce unemployment up to five million – 15% of the workforce.
“James Reed, chairman of recruitment firm Reed and co-founder of Keep Britain Working, a campaign to reskill workers whose jobs are at risk, believes that we are at risk of a ‘tsunami of job losses’ which, he suggests, would be like nothing seen since the 1930’s ‘Great Depression; a harrowing thought.
In summing up, Dr McCabe told Prosper, “Equally critical, it’s to be sincerely hoped, the widespread job losses and closures of businesses many fear is possible due to Covid-19, will be averted by judicious intervention by the government; one that gained a thumping and surprising majority through its promise to ‘level up’ regions outside of the south-east and London.
“Collectively, we can’t afford failure that could easily lead to levels of unemployment not seen for a generation and would potentially result in a lost generation of young people whose hopes and aspirations are destroyed.
“As D:Ream’s Peter Cunnah proclaimed so joyously in 1993, it is to be hoped that the current crisis is temporary and that from both a health and economic perspective, things really do get better.”