Employers want to see the Government’s Coronavirus Job Retention Scheme (JRS) made more flexible to allow furloughed staff to work reduced hours and for the scheme to be extended to at least the end of September.
This is according to a new survey of more than 1,000 employers commissioned by the CIPD, the professional body for HR and people development. The CIPD is warning that without these changes, the current JRS could prove to be a waiting room for unemployment and fail to protect significant numbers of the jobs it set out to save.
The CIPD’s survey shows that almost half (46%) of employers have already furloughed staff, while another 10% plan to do so. However more than three quarters of employers that have already furloughed staff (76%) or plan to furlough staff (78%) said that making the scheme more flexible to enable furloughed staff to work reduced hours would be useful.
Seven in ten employers (70%) that have already used or are considering using the furlough scheme, said that up to half of furloughed staff could potentially work reduced hours, while 16% of these organisations reported that more than 50% of furloughed staff could work reduced hours. The CIPD says that changes to the scheme to allow short-time working would enable hundreds of thousands of furloughed staff to work in some capacity, helping to protect jobs, support businesses and reduce the burden on public finances, as many employers would require a lower wage subsidy from the Government.
In addition to greater flexibility, employers would also like the JRS extended by three months, to the end of September, with 60% identifying this as the most important labour market policy change that would help them deal with the impact of COVID-19. This is crucial given that the CIPD’s survey suggests that the JRS has played a vital role in protecting jobs to-date, with just 7% of employers having already made redundancies in response to Covid-19 to-date, with a further 12% planning to.
CIPD Chief Executive, Peter Cheese, commented:
“The Government has worked hard to get the job retention scheme up and running so quickly. However, urgent decisions must now be taken to make it more flexible and to extend it so employers can continue to protect jobs.
“Letting furloughed staff work some hours, where possible, will enable organisations to bring back workers from furlough gradually while rebuilding their business. This will be vital as lockdown measures are eased over a number of weeks or months, and will reduce the risk of large-scale redundancies in this next phase of the crisis.
“The Government must also consider extending the scheme to at least the end of September. This will provide more certainty for employers and ensure that there is no ‘cliff edge’ exit from furlough straight to redundancy for hundreds of thousands of workers at the end of June.
“The Government has shown its prepared to adapt and improve its rescue packages for businesses and workers as this crisis develops. It needs to do so again here. Equally, businesses must play their part. We need to see employers weigh up the ethical, legal and financial considerations of using the scheme, to act openly and responsibly to ensure that a more flexible system is not abused, and that public money goes to the businesses that need it the most.”