The UK Government’s Job Retention Scheme was set up urgently to support employers and protect employees during lockdown.
The scheme offered short and much-needed respite to distressed businesses, preventing hundreds of thousands of employees being made redundant. It has also boosted businesses which were less directly impacted by the crisis. This is important, as economic recovery needs to be driven by those thriving, not just those surviving.
But furloughing staff is not without risks. First, there is the impact on wellbeing. This is true for both employees on furlough, and those that remained in work and may feel anxious about their workload, potentially creating tensions between colleagues. Those whose government paid salary was not topped up by their employer may also worry about their financial situation.
Settling back into working life might not be as easy as it seems either, for those who spent several months developing a new routine. Some may have lost skills, or confidence in their ability. There is also a risk of losing top employees who may have used their time on furlough to seek new opportunities.
To mitigate these negative effects, businesses should consider the furlough scheme not just as a financial aid, but as a unique opportunity to optimise the way they operate. Many have already reshaped their business, restructured their teams, and developed additional training, after having identified new strengths and weaknesses, and realising what works best for them in the new working environment.
Businesses also improved their communications processes – to keep staff informed of developments, encourage conversations on health and wellbeing, and manage expectations about the return to work. This ongoing dialogue is crucial: with lockdown restrictions gradually returning just weeks before the scheme is due to end, reviewing employment contracts and seeking alternatives to redundancies is as relevant as ever.
So, while the furlough scheme is not a sustainable solution on the long term, and is likely to be replaced by a different kind of subsidy, it has certainly maintained the economy afloat and helped businesses to learn a lot about themselves, and their employees.
Richard Thomas leads the employment and immigration team at Capital Law.