Making employees redundant
Unfortunately, not everyone will be able to return to work when furlough ends – not even on a part-time basis. In this instance, the options are unpaid leave or – more likely – redundancy. Between September and December 2020, the redundancy rate was 12.3 people per 1,000 employees. It is likely this will increase following the end of furlough. This is no doubt the worst-case scenario for employers and employees alike, but in industries where recovery is likely to be slower, it could be the only option for the survival of businesses.
Preparing for the end of the furlough scheme
Whatever the final result of the furlough scheme is, it is crucial for both employees and employers to prepare. For employees, this could mean applying for jobs at financially stable companies (though the unemployment rate currently far exceeds the number of vacancies), or saving money where possible to cover essential bills should the worst happen. If a return to work is likely, getting back into a working routine will help employees settle back in more easily.
For employers, now is the time to be thinking about what is likely to happen over the next few months. Will the business break-even or even cut a profit prior to September, or is it more likely to remain stagnant for a period of time after furlough ends? Are there areas where money can be saved to accommodate bringing back employees who were previously on furlough? Exploring Paydata’s pay review and analysis service is a good first step for businesses looking to prepare for the end of furlough.