A poll, which surveyed more than 300 employers and was conducted by People Management and CIPD, has found that one in four employers expect to make permanent redundancies as a result of Covid-19. This poll was undertaken to understand how HR teams have been responding to the coronavirus outbreak.
It was found that 52 per cent of employers planned to temporarily lay off staff through the government’s job retention scheme and of those, 17 per cent stated that they anticipated having to furlough up to 10 per cent of their workforce – and another 10 per cent of those surveyed forecast that they would have to temporarily lay off up to 24 per cent of the workforce.
Despite the government’s interventions, 15 per cent of those surveyed were expecting to make up to 10 per cent of their existing workforce redundant - 9 per cent of employers anticipated having to lose up to 49 per cent of their workers - and 1 per cent would lose more than 75 per cent.
Firms have been asked - by experts - to consider other options carefully and only make permanent redundancies when all else fails, warning that the staff can still bring tribunal claims if the situations are not handled correctly.
Apart from furloughing and making staff redundant, 35 per cent of respondents cited asking staff to take annual leave; 26 per cent cited temporarily deploying employees to other parts of the business; 25 per cent reducing working hours and 24 per cent freezing or deferring pay rises.
Ben Willmott - head of public policy at the CIPD - said:
“Making redundancies should be a last resort once all other options for reducing workforce costs have been taken. Organisations that are most successful in protecting jobs and supporting their employees will also be those that are most resilient and best able to recover once this crisis is past.”
Paul Holcroft - Associate Director at Croner - said it was not surprising that some businesses felt they had no choice but to make staff redundant, but warned about the usual rules surrounding redundancy continuing to apply.
He stated:
“Employees can still seek to bring tribunal claims if their employers do not handle these situations properly – a process that is likely to drag on for an extended period because of the outbreak.”
Jude Read - Managing Director of Jude Read Consultancy - told People Management that the furlough scheme had been a “godsend” for her clients.
She added:
“We’re not just talking about five or six employees being furloughed – we’re talking about 20 to 50 workers being furloughed at one time. Can you imagine if this was redundancy and having to handle a collective consultation as well?”
However, money from the job retention scheme is not expected to start arriving until the end of April at the earliest, and both Jude Read and Sarah Dowzell - Chief Operating Officer and co-founder of Natural HR - said many employers did not have the cash to bridge this gap.
Sarah Dowzell added a warning:
“How you behave and treat your employees – both those being made redundant and those unaffected – during this time of crisis can have a huge impact on the perception of your company once you’re out the other side. Handling it without the due care and attention such a situation deserves will not only make an already stressful time for your employees that much more difficult, but it could also adversely affect how your business is viewed externally and your ability to attract future talent”.
