Redundancy and Restructuring

The furlough scheme has supported some 11.2 million jobs since it was introduced in March 2020, with an estimated 41% of employers using it. With the Chancellor announcing in his recent budget that it will be extended for the sixth time, both employers and employees are breathing a collective sigh of relief that government support remains in place until the end of September.

Businesses in the UK have endured a long and bumpy ride over the last year. For many, the furlough scheme has been vital in ensuring their survival. Its extension beyond 21 June, the earliest that the Government will lift all limits on social contact, gives businesses both the time and support to scale up as the economy reopens. The flexibility it provides in bringing staff back from furlough as demand for goods and services increase means that, if all goes to plan, when the furlough scheme finishes at the end of September, businesses will be able to stand by themselves again, without the need for government support.

It seems like a sensible strategy. After all, when an athlete sustains an injury and has a long layoff, they need time and support to rebuild their fitness to become “race ready”. Likewise, the furlough scheme is providing businesses both the time and financial support to gradually get back to full strength.

However, no matter how good the analogy, or the thinking behind the approach, some businesses are unlikely to be “race ready” when the furlough scheme ends. For them, the injury the pandemic has inflicted on them has been deep. No matter how much time and support they receive, they are unlikely to rediscover their “pre-pandemic” form and difficult decisions will need to be made.

Many businesses will, naturally, delay any decisions on staffing until the furlough scheme comes to an end. At K Bater HR we understand this approach, as businesses feel a responsibility towards their staff and hope that restructuring and redundancy might be avoided.

Nonetheless, the extension to the furlough scheme does provides an opportunity for employers to consider what they might need to do and, importantly, to engage with employees to understand their hopes and expectations for work going forward.

Afterall, whilst the last year has changed the business landscape dramatically, life for employees has also changed. It is possible that employees may want to work differently in the future, including ongoing remote working, more flexibility or reduced hours. After a year in which people have had time to reflect on what is important to them, the role they did before the pandemic may no longer be what they want going forward. However, without engaging with employees, it is impossible for a business to plan effectively for how its workforce will look when the furlough scheme ends, and life begins to return to normal. At K Bater HR, we are experts in helping businesses effectively manage their human resource function and, if difficult decisions are ultimately required, supporting, and guiding our clients through them. Whilst we cannot predict whether the economy will bounce back as hoped, that the removal of COVID-19 restrictions will run smoothly or if a business will be “race ready” come September 30, we are here to help business by ensuring that HR is one less thing they need to worry about.