CIPD says 4 million redundancies avoided through furlough scheme but it must be extended and made more flexible if it is to continue to protect jobs

UK HR body says ‘all or nothing’ format of the scheme must be reviewed to help ease furloughed staff back into work and wean businesses off the scheme

The Chancellor has announced plans to wind down the Job Retention Scheme from July 2020 and to ease people back into work in a measured way. However, research from the CIPD, the professional body for HR and people development, shows that employers want the scheme to be extended until September and made more flexible in order to continue to prevent job losses, having already potentially saved more than 4 million people from redundancy.

A survey of more than 1,000 employers from the CIPD found that:

  • Without the Job Retention Scheme (JRS), over half of employees who were furloughed could have been made redundant, equating to 14% of all UK employees or 4.2 million jobs across the UK.

  • 60% of employers said extending the Job Retention Scheme to September was the single most important labour market policy intervention the Government could make to support them.

  • 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.

With official figures showing that 6.3 million UK workers have now been furloughed, the CIPD is calling for the Government to extend the JRS for another three months and make it more flexible to help gradually wean employers off the jobs support programme.

Ben Willmott, Head of Public Policy at the CIPD, comments:

“The Job Retention Scheme has saved millions of jobs, but if it continues in its current ‘all or nothing’ form, it will be harder for employers to gradually wean themselves off this crucial support. Employers want to see the scheme extended to at least September and for it to be made more flexible to enable furloughed staff to come back to work gradually. Given lockdown measures are set to be eased slowly, it’s right that businesses are also given a glidepath back to normality, through a revised furlough scheme.”

“However, the Government chooses to move forward, any reform of the scheme will need to give employees the option to work reduced hours to be of most benefit to employers. This is good for the employee as it could help to protect their role moving forward, and it will help businesses to respond as economic demand gradually picks up, while reducing pressure on the public purse.

“The Government will also need to consider whether to make the job retention scheme more flexible to the needs of specific sectors as it winds down and how it will gradually reduce the level of wage subsidy being provided without creating a ‘cliff-edge’ for employers, especially those in the sectors that are hardest hit.”

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