Home Workplace Management HR and coronavirus survey: Recovery or redundancy?

HR and coronavirus survey: Recovery or redundancy?

by Jackson B
gawdo.com

By Mark Crail

As employers survey the economic legacy of the coronavirus (COVID-19) lockdown, XpertHR asked HR practitioners about flexible furloughing, job losses and the new realities of workplace life.

Three months after the Government brought much of the UK economy to a grinding halt when it imposed lockdown measures that left more than 9 million workers on furlough, many businesses are now looking to pick up the pieces. A loosening of social distancing rules, and the lifting of an outright ban on some commercial activities means that – all being well – many more people will be returning to the workplace over the coming weeks.

However, the economic shock of the measures taken by government to control the spread of coronavirus (COVID-19) has plunged the UK into a recession of unprecedented depths, and it is not yet clear what long-term damage has been done. In this, the fifth in our series of coronavirus surveys since the start of April, we asked HR practitioners about their organisations’ continued use of the furlough scheme over the summer of 2020, about their expectations around likely redundancies, and about their thoughts on the post-pandemic workplace.

Workload impact for HR

Over the three months since this survey series began, we have asked respondents to estimate the volume of HR work driven by their organisation’s response to the pandemic. As table 1 shows, at the beginning of April, as the lockdown took effect, HR had time to deal with little else, with many HR professionals spending most, if not all, of their working week solely focused on work driven by their organisation’s response.

Over the past three months, that workload has eased, with our latest survey showing that around a half of all HR work is now driven by organisational responses to the pandemic. This is still an enormous amount of activity that was simply not anticipated by anyone at the start of the year, but it is beginning to make way for other activities that may be affected by, but are not driven by, the pandemic.

Table 1: Volume of work driven by pandemic response

Volume of work % of orgs at 29 June % of orgs at 20 May % of orgs at 30 April % of orgs at 16 April % of orgs at 2 April
80-100% 14.1 18.9 20.8 32.2 42.8
60-79% 24.1 28.7 26.1 23.7 24.8
40-59% 27.7 24.4 25.0 18.6 16.5
20-39% 24.1 20.7 14.8 17.0 11.0
n = 191 organisations at 29 June; 275 at 20 May; 264 at 30 April; 388 at 16 April; 400 at 2 April.

Source: XpertHR.

   
Volume of work % of orgs at 29 June % of orgs at 20 May % of orgs at 30 April % of orgs at 16 April % of orgs at 2 April
0-19% 9.9 7.3 13.3 8.5 5.0
n = 191 organisations at 29 June; 275 at 20 May; 264 at 30 April; 388 at 16 April; 400 at 2 April.

Source: XpertHR.

   

Continued use of furlough

The Government has said that around 1.1 million employers have placed a total of more than 9 million people on furlough under the Coronavirus Job Retention Scheme. Our research has found widespread use of the scheme over recent months, and this continues in our current survey, which shows 71.2% of respondents using it for some or all of their workforce.

Table 2 shows that there is some indication that employers may now be using the scheme to furlough a smaller proportion of their workforce. At the end of April, when use of the scheme was at its peak, 31.8% of employers making use of it reported that more than half of their workforce was on furlough; this has now fallen to 17.6%. At the other end of the spectrum, our 30 April survey found that around one in four organisations using the scheme (26.6%) had furloughed one in 10 of their employees or less; this figure has now risen above one in three (37.5%).

Table 2: Percentage of workforce furloughed or planned to be on furlough

Furloughed employees % of organisations at 29

June

% of organisations at 20

May

% of organisations at 30

April

% of organisations at 16

April

91-100% 2.9 7.1 8.7 7.9
81-90% 7.4 6.6 5.5 4.7
71-80% 3.7 3.8 5.5 4.7
61-70% 0.7 5.5 6.6 4.0
51-60% 2.9 2.2 5.5 8.3
41-50% 6.6 13.2 7.1 7.2
31-40% 8.8 8.8 9.3 10.8
21-30% 17.6 13.2 10.9 10.4
11-20% 11.8 14.3 14.2 13.3
0-10% 37.5 25.3 26.8 28.8
n = 136 organisations at 29 June; 182 at 20 May; 183 at 30 April; 278 at 16 April.

Source: XpertHR.

   

The move to flexible furlough

Since the last survey in this series, the Government has set out the details of changes to the scheme.

These include:

halting employers’ ability to furlough additional employees;

introducing a flexible furlough option under which employees are able to work part-time and receive their pay for the hours worked, while also being furloughed for the remainder of their normal week under the terms of the scheme; and        requiring employers to contribute towards the costs of furlough.

We asked those respondents currently using the scheme whether or not they planned to make use of the flexible furlough initiative: 8.8% said that they would do so for all those currently on furlough, with an additional 64.7% doing so for some of those on furlough; and 26.5% said they had no plans to do so. This seems to suggest that many employers that have relied on the scheme over recent months now see a way to get at least some people back into work on a part-time basis.

Of course, those workers who are currently furloughed but for whom there are no plans to use greater freedoms of flexible furlough may face one of two futures: either a continuation on full-time furlough until such time as the scheme closes at the end of October 2020 when decisions will have to be made about their jobs; or the prospect of job losses in the months ahead.

Prospects for workers on furlough

We asked respondents currently using the scheme what they thought would happen to those currently on furlough by the end of August. We suggested four possible outcomes, and asked what proportion of those on furlough at present would fall into each category.

Table 3 reports on the overall average for each category. It suggests that, typically, employers expect just under half those currently on furlough (45.6%) to be back working their full contractual hours by the end of the summer. This is good news for employers and employees alike. Our respondents believe that workers still on furlough by 31 August, at which point the scheme will still have two months to run, are likely to be split almost equally between those still furloughed full time (22.5%) and those who have returned to working part time (19%). The findings further suggest that around one in 10 of those currently furloughed may face redundancy before the furlough scheme ends.

Table 3: Likely prospects for workers currently on furlough by 31 August

Outcome % of furloughed workers
Working full contractual hours 45.6
Working part time/furlough part time 19.0
Furlough full contractual hours 22.5
In redundancy consultation/made redundant 9.9
Other 3.0
n = 136 organisations.

Source: XpertHR.

 

Among the small number of organisations saying there would be some other outcome, the two most common were that the individuals were fixed-term workers whose contracts would not be renewed, or that those affected were either shielding and could move to sick/sick leave arrangements or were currently at least 28 weeks pregnant and would be leaving furlough for maternity leave.

Contributing towards salary costs

As the Coronavirus Job Retention Scheme moves towards closure at the end of October, employers will be expected to make a financial contribution on a stepped basis.

From 1 August, the Government will continue to pay 80% of salary costs, but employers will have to pay employer national insurance contributions and employer pension contributions; from 1

September, the government salary contribution will fall to 70% with employers additionally expected to pick up 10% of salary costs; and finally, from 1 October, the government contribution will fall to 60% with employers paying 20% of salary costs.

We asked respondents how confident that they were that their organisation would be able to afford to contribute towards salaries from August.

A surprisingly high number – more than 60 of the 86 who replied – said they were quite confident, confident, very confident, 100% confident or a variant of those phrases. Some indicated that they were already seeing sales begin to pick up, with others hoping to see this during the course of July. A small number said that having asked employees to accept pay reductions, they now had cash in hand to help fund contributions from August.

Among those that were less sure, there were typically caveats about how their market would recover.

One education provider said: “Reasonably confident but not confident we can afford a pay review. This is problematic as many of our staff are aligned to public-sector pay scales and we could run the risk of falling behind the market in our schools.”

Several commented along similar lines to the HR manager who said: “Yes for now but the situation may change if the pandemic has a second wave.”

For some, there is still too much uncertainty to be sure. A respondent in the catering industry said: “We are finding it difficult to forecast for the next few months on what income to expect and what headcount will be required. As a wholesale catering business our company depends upon the hospitality sector. Should it return with kitchens open from 4 July we may be able to bring more back to work and cover furlough wages; however, if we find that customers are not reopening or not opening with full menus we may have to make redundancies in order to protect as many other jobs as we can. There are just too many unknowns at the moment for us to make any accurate predictions.”

Others, however, see little prospect that they will be able to pick up the cost. As the HR manager at one smaller employer noted: “The organisation will not be able to afford to contribute. Only 10% of staff currently on furlough will be offered part-time furlough from August 2020.”

Planning for redundancies

We asked all participants in the survey whether or not they were actively considering making employees redundant. One in three (35.1%) said they were; two in three (64.9%) said they were not.

Of the 67 organisations that said they were actively considering redundancies, 47 expect to make up to 10% of their workforce redundant over the next few months, while 16 expect to cut between 11% and 30%. Tiny numbers expect to lose a larger proportion of their team – but this includes one employer anticipating redundancies for between 91% and 100% of its workforce.

Many employers are, however, investigating measures that they might be able to use in order to avoid or minimise compulsory redundancies. Most commonly these include recruitment freezes, the use of natural wastage, pay freezes and voluntary redundancies. Typically, employers are looking at a combination of measures, as set out in table 4.

Table 4: Alternatives to compulsory redundancies

Measures under consideration % of organisations
Freezing recruitment 67.2
Continued use of Coronavirus Job Retention Scheme 64.2
Natural wastage 62.7
Stopping/reducing temporary workers 52.2
Freezing/reducing pay 50.7
Voluntary redundancies 47.8
Stopping/reducing overtime 35.8
Short-time working 29.9
Retraining/redeploying employees 28.4
Inviting early retirements 19.4
Offering career breaks/unpaid leave 14.9
Lay-offs 4.5
Other 4.5
n = 67 organisations.

Source: XpertHR.

Of the small number of organisations that said they were looking at other measures, one was seeking government grants, one was halting commission payments, and the third, a law firm, explained: “We have already introduced freezing recruitment, stopping overtime, stopped temp staff and salary review has been deferred and there may be freezes in some areas. We have realised that we do not need to have as many secretaries or general office staff (need to be there physically) given that working from home will continue and there will be more of this when we return to the office.”

The return to the workplace

Government guidance continues to be that those who can work from home should do so. However, the relaxation of lockdown rules and the reopening of non-essential retail and other premises means that increased numbers of people are now returning to work – and to the workplace. We asked respondents how they would best describe the situation at their organisation’s premises. Their responses are set out in table 5.

Table 5: Current workplace arrangements

Arrangement % of organisations
Arrangement % of organisations
Open for all employees 4.7
Open for some employees – no immediate plans to bring others back 33.0
Open for some employees – furloughed/homeworkers returning 21.5
Closed but reopening for some employees only 18.8
Closed – no plans to reopen 5.8
Other 16.2
n = 191 organisations.

Source: XpertHR.

 

As the table shows, four out of 10 organisations are now either allowing more employees to return to the workplace (21.5%) or reopening so that some employees can come back (18.8%). Just a handful (5.8%) remain closed with no plans to reopen.

Of those who said they had some other approach, most were currently at different stages of planning or implementing an opening up of their premises subject to government guidelines, or were devising different plans for office-based and shopfloor or frontline teams.

One financial services provider told us: “Head office – approx 30% have worked throughout as they are our key workers. The other 70% are working from home. No immediate plans to bring the 70% back into the office. Salesforce – 95% are furloughed. Remaining 5% are working from home. Prior to COVID-19 all salesforce worked from home.”

Finally, we asked respondents what issues their organisation had experienced or was expecting to see as people return to the workplace.

As table 6 shows, two main stumbling blocks emerge very clearly: employees’ inability to return due to child or family care responsibilities, and a general reluctance to return to the workplace. These same issues also topped the table in the fourth survey of this series on 20 May.

Table 6: Workforce issues with a return to the workplace

Issues experienced or anticipated % of organisations
Employees’ reluctance to return to the workplace 72.3
Employees unable to return due to child/family care responsibilities 75.4
Difficulties balancing annual leave requests with business needs 46.1
Employees failing to comply with physical protection/distancing measures 29.8
Fall in employee engagement 26.2
Demand for physical protection measure that exceed what the organisation thinks necessary 19.9
Unsustainable levels of flexible/homeworking requests 14.7

n = 191 organisations.

Source: XpertHR.

Issues experienced or anticipated % of organisations
Staff shortages 7.3
Other 8.4
n = 191 organisations.

Source: XpertHR.

 

Other concerns about the return are similarly unchanged on those identified a month ago, including managerial issues around balancing requests for annual leave against the needs of the business, and a possible fall in employee engagement. However, our current survey also listed two other possible concerns, both of which are anticipated by a significant minority of respondents: the likelihood that employees may fail to comply with physical protections and distancing measures when they return to the workplace (29.8%), and the possibility that, having acquired a taste for homeworking over recent months, too many employees may now wish to make the arrangement permanent (14.7%).

Our research

This report is based on original research carried out in the final week of June 2020. Responses were received from 191 organisations.

The breakdown of respondents by economic sector is as follows:

147 (54.5%) are in private-sector services;

27 (14.1%) are in manufacturing-and-production;

25 (13.1%) are in the public sector; and

35 (18.3%) are not-for-profit.

Broken down by workforce size, the respondent organisations comprise:

116 (60.7%) employing between one and 249 employees; 39 (20.4%) employing between 250 and 999 employees; and 36 (18.8%) employing 1,000 or more.

What should I do now?

Access and drill down into the full data from this survey to benchmark your organisation’s response to the coronavirus pandemic.

Visit our coronavirus resource round-up for guidance, model documents and other helpful information for HR practitioners.

Find out what HR practitioners are doing to promote employee engagement as people return to the workplace.

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