Will the Government extend furlough again?
The Government’s Job Retention Scheme (JRS) is due to run for four months from March 1, until the end of June. The JRS was announced on March 20, and its aim is to enable employers to continue paying part of their employees’ salaries rather than laying them off in the face of the COVID-19 crisis. This is also known as furlough. Social distancing measures are likely to continue for the next year in order to avoid a second wind of the virus, and this means businesses will be impacted for a long time. Will furlough be extended in June?
What is furlough?
Furlough is supporting firms hit by coronavirus by temporarily helping to pay the wages of people who can’t do their jobs due to the virus.
It allows employees to stay on the payroll, even though they aren’t working.
The Government is offering to pay 80 percent of employees wages, up to a maximum of £2,500 per employee per month before tax.
The company can top up this pay to 100 percent if it chooses, but is under no obligation to do so.
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Will furlough be extended?
The JRS is backdated to March 1, and applications opened on April 20.
The Government initially said the scheme will run until at least the end of June and will be extended if necessary.
Hundreds of British businesses could be forced to make a multitude of redundancies without a second extension, they warned.
During a Parliamentary update on Monday, chancellor Rishi Sunak said the JRS could be extended once more after it expires on June 30.
He said: “I am determined to make sure as many people as possible return to work after this crisis.
“I want to make sure that as we emerge from this crisis, we can bounce back to the lives we once knew.”
Mr Sunak said the JRS “will be extended” if necessary, depending on how employers react to the continuing crisis.
How to furlough staff
A staggering seven out of ten businesses in the UK have furloughed staff so far, and many others are contemplating the idea.
Managing Director of Cartridge Save, Ian Cowley, told Express.co.uk how to furlough staff strategically and empathetically.
He said: “We’re hoping that we’re not going to have to furlough. We’re very fortunate in that we are still doing a lot of orders.
“However, the current uncertainty means that could all change overnight. To that end we’ve got a plan in place.
“We hope we don’t have to use it but if we do it’s because we want to ensure staff have jobs to come back to.
“In terms of accessing the funds, the process looks very simple. It’s based on the PAYE system and will be administered online via a dedicated portal, soon to be launched.
“For anyone who’d like extra guidance, I’d recommend signing up to a HR subscription service where you can access advice at a fixed rate.
“The complication with furloughing though is ensuring a strategic and empathetic approach, in order to protect the business in both the long and short term.”
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Mr Cowley added: “My recommendation is to base your plan on forecasted cash flow. For us, by forecasting the number of orders, we can work out the resources needed in each department.
“Things are so fast moving that we need to forecast on a weekly basis, but by forecasting labour and the need for resources you can make a logical decision.
“Be prepared to implement furlough in waves, reducing resources in line with the needs of the business.
“When it comes to who, I’d recommend a two-tier approach.
“Firstly ask for volunteers, as finding willing people will help manage the process positively. Some employees will welcome the opportunity for health or childcare issues.
“Secondly, if you do not have enough volunteers, it’s time to look at the people whose work has disappeared or who can’t work from home.
“In most businesses your ultimate decision will be based on the skills needed, and ensuring you have the right mix to service demand.
“Furloughing is a brand new concept and there are no precedents to guide best practice.
“As a result, businesses should deal with furloughing in a similar way to redundancy to avoid the potential for any claims in the future.
“Be very careful to document your decision making process, as it’s essential to keep a record showing why you’re doing it and how you’re communicating the decision.
“Additionally, seek advice from a solicitor with HR expertise – the Law Society has a useful database. Investing now will help future-proof this process.”
Mr Cowley emphasised the importance of communicating empathy with your staff when you make the decision to furlough them.
He said: “Clearly explain to everyone why you’re taking this decision and get them to look at the bigger picture with you.
“You’re making this decision to protect their jobs for the future. It’s likely that managers will understand but less senior employees may not have the insight needed to see the wider context.
“For this reason, make yourself available to all staff members, whether they’ve been furloughed or not.
“To make sure we treat all staff with empathy, manage communication through your heads of departments, who have close, personal relationships with their team.
“Get them to deliver the news on a one-to-one basis, telling furloughed staff ahead of their colleagues, and ringfence time to make them available for follow up questions, either by email or on their phones.
“It is important that these heads let furloughed staff know that they can speak to your HR team at any point, and that they share a clear timeline on when the situation will be reviewed.
“Keeping furloughed staff engaged will be very hard. Just do all you can to keep lines of communication open.
“Managing the remaining workforce will also require skill. Some will be very worried that they will be furloughed in a further wave, while others may feel they’ve now got too much work to do.
“That’s why we will only furlough if we really have to, and we will use a cashflow forecast to make the decision for us.”
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