Signs redundancy ‘cliff-edge’ may not be as steep as first feared as Government furlough scheme comes to an end
There are growing signs that an expected wave of job losses in October following the end of furlough payments may be less severe than many first predicted, according to a human resources expert.
Employees opting for reduced working hours are playing their part in helping avoid a redundancy cliff-edge when the UK government’s furlough funding draws to a close imminently, according to Jane Watson, head of Prism HR, the human resources consultancy operated by Scottish legal firm Lindsays.
The £66 billion Coronavirus Job Retention Scheme, which has latterly allowed businesses to claim 60 per cent of a furloughed employee’s pay, closes on Thursday September 30 – although there have been calls in Scotland, for example, to extend this.
There had been widespread fears that this could trigger a wave of redundancies from businesses that had held off making cuts while the support was in play. Ms Watson said almost one million jobs in Scotland have been furlough ed since june 2020, and according to UK government statistics published earlier this month, there were about 116,500 people in Scotland on furlough at the end of July, the lowest level since the scheme started, and representing a 26,500 fall from June.
Ms Watson said: “While we are coming to the end of the furlough scheme, it is not looking like the redundancy cliff-edge that many were imagining.
“Instead, we are starting to see signs that businesses, particularly [small and medium-sized enterprises], who relied heavily on the scheme looking to put staff on a reduced working week rather than making roles redundant. And that may be on a temporary or permanent basis.
“I am aware of some companies doing that and I am sure that shorter hours – some at the request of employees themselves – are helping to avoid redundancies.”
She added that some employers will unfortunately have to lay off staff, particularly in sectors that have been badly affected by the pandemic, such as hospitality. “But, hopefully, fewer losses than were anticipated will be made,” the HR expert also said.