A new report has found that the Government’s Coronavirus Job Retention Scheme (CJRS) has been crucial in keeping UK businesses operational during the pandemic.
And it warns of a significant risk of widespread redundancies when it ends on 30 September 2021.
Researchers at Leeds University Business School used the findings of a survey of 2,000 managers looking at companies practice of workforce furloughing, their experiences of using the CJRS, and workplace change during the Covid-19 pandemic.
Managers reported widespread use of furloughing, using it as an alternative to making staff redundant. Three-quarters of managers supported the introduction of a longer-term version of the CJRS to help ongoing workforce planning.
It is important that the benefits of furloughing and the significant investment of the CJRS are not lost.
The CJRS, which was first introduced in March 2020, allows employers to claim Government support for some of the wages of employees placed on furlough because of Covid-19.
The scheme is credited with keeping unemployment rates down during the pandemic, and has been extended several times, most recently until 30 September 2021.
The Leeds research also showed that there was a small proportion of businesses which chose to support staff retention during the pandemic through self-funding, rather than relying on the CJRS.
Around one fifth of managers reported that they would look to introduce a longer-term, self-funded furlough scheme when CJRS support ends. The report offers evidence that the CJRS and furlough have helped to protect jobs, and there is support amongst managers for some form of job retention beyond the crisis.
Professor Mark Stuart, one of the authors of the report, said: It is important that the benefits of furloughing and the significant investment of the CJRS are not lost. The focus on job retention and the value of this to workers, businesses and the economy should be maintained longer-term. We hope policy makers reflect on the findings of the report and consider its key recommendations.
The report also showed that businesses have been restructuring their operations during the pandemic, including through accelerating investment in new forms of digital technology. This looks set to continue post-pandemic and will further trends in remote and more flexible forms of working.
There is also a warning about the risk of higher redundancies and adverse shifts in employment practices as the economy moves out the pandemic and the CJRS is withdrawn.
Just under half of managers surveyed reported that the CJRS had delayed inevitable redundancies, with workers returning from furlough either likely to lose their jobs or to experience cuts in pay or hours. Just under half of surveyed managers said that the government should provide ongoing support for staff retention or focused support for those workers made redundant.
The report, Furloughing and the Coronavirus Job Retention Scheme (CJRS) in the UK: managers experiences and perspectives, makes three key recommendations:
- A long-term furlough scheme should be introduced, supported through appropriate employment legislation and high level dialogue between key labour market actors. This should be modelled on international examples of best practice, notably long-standing short-time working schemes.
- Businesses should be encouraged to use furloughing as an alternative to redundancy and to adopt job retention as a long-term human resource management (HRM) practice. This should be supported by bodies such as ACAS and the CIPD, through good practice codes and guidance for employers.
- The government should introduce a post-Covid-19 employment recovery plan that not only includes support for education and training, but a comprehensive programme of support for workers made redundant as a direct result of the Covid-19 crisis. A recovery plan should be built on new social partnerships and should allow for a levelling up in labour standards.