Opening on 20th April, the Coronavirus Job Retention Scheme (CJRS) enabled employers to claim for 80% of employee salaries, plus any employer National Insurance and pension contributions. So far, some 8 million workers have been placed on CJRS, providing a lifeline for businesses and employees alike.
Change is coming
Chancellor Rishi Sunak announced that, from August, employers would have to start paying employers’ National Insurance and pension contributions for furloughed employees – amounting to 5% of salary – while the taxpayer continues to pay 80% of the workers’ wages.
Furthermore, from September, employers will have to pay 10%, rising to 20% in October, before the scheme closes on 31st October. Such changes to the furlough scheme have led many to believe that vast numbers of people will face redundancy in the coming days and weeks.
Consumer rights campaigner, Martin Lewis, told viewers of the ITV Martin Lewis Money Show to be prepared: “I’m afraid to say, due to the change in furlough coming on 1st August, I think hundreds of thousands of people – possibly a million – could face redundancy in the next six weeks.”
Options for employers
Employers’ thoughts should now be turning to what happens once the support of the CJRS is reduced and ultimately removed. Many will be exploring a variety of cost-saving measures, including extending furlough on a self-funded basis, reducing hours of pay, designating unpaid leave and, indeed, making some members of the workforce redundant.
While lay-offs are always difficult, the pandemic has meant they are now an unfortunate reality for many businesses. Additionally, employees who were placed on furlough are likely to have spent time worrying about the prospect of redundancy in the near future.
It’s for these reasons that employers must handle any redundancy process in the most sensitive, considerate and professional manner throughout. The right approach during this unprecedented time will make the situation a lot easier for both the business and its employees, even if it doesn’t feel like it at the time.
Doing the right thing
What makes the current situation particularly stressful for employees is the poor labour market and accompanying fear of not being able to find an equivalent job, or indeed one at all. Before COVID-19, only the most progressive employers provided career transition and outplacement services; however, preparing employees for transition is more critical now than ever before.
How well an organisation helps employees handle a major career transition can profoundly impact their reputation with customers, current employees, and prospective future hires. It’s not a box-ticking exercise, but rather about creating real opportunities to find new roles and helping employees with career transitions. Not only will getting this right provide displaced employees with the appropriate support, but it also goes a long way in protecting an employer brand during a time when businesses are facing intense scrutiny over the treatment of workers.
Help is at hand
Our dedicated Talent Transition service operates at the heart of our changing world. With over 20 years’ experience in resourcing and talent management, we help employers connect the dots and workers realise the potential of their transferable skills.
Combining our innovative on-line career hub and our team of specialist consultants, Omni RMS provides cost-effective and personalised career transition support for any number of employees who are impacted by a restructure and change, as well as being a true partner to your HR team.
For more information about our Talent Transition service, please contact firstname.lastname@example.org
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