1 in 4 employers expect permanent redundancies from coronavirus crisis

A joint survey from the CIPD and People Management magazine shows how employers are responding to the Covid-19 pandemic

Over 50 per cent of UK employers will look to furlough their staff but one in four expect to make permanent redundancies due to the coronavirus crisis, a new joint survey from the CIPD, the professional body for HR and people management, and People Management magazine shows today.

The survey of 301 HR professionals shows how employers are responding to the Covid-19 crisis in terms of managing their workforce, hiring plans for the immediate future and accessing government support.

The CIPD is asking employers to look at all options available to them before making redundancies to help protect employees’ livelihoods and the future of their businesses. 

The survey also found that 1 in 5 (19 per cent) of employers have asked staff who are not classed as essential workers to still attend their place of work. However, it also highlights that many employers have found the Government’s classification of essential and key workers confusing.

Ben Willmott, head of public policy at the CIPD, said:

“This survey shows that many businesses are already considering redundancies, rather than utilising the Government's Job Retention Scheme during the coronavirus crisis. Making redundancies should be a last resort once all other options for reducing workforce costs have been taken. Organisations that are most successful in protecting jobs and supporting their employees will also be those that are most resilient and best able to recover once this crisis is past.”

Findings from the survey include:

Strong demand for the Government’s Job Retention scheme for employers facing workplace closures and/or a financial hit to their organisation. Employers are: 

• Planning to temporarily lay off staff (furlough) through the Government’s Job retention scheme (52%)

• Asking staff to take annual leave (35%)

• Temporarily deploying staff to other parts of the business (26%)

• Reducing people’s hours (25%)

• Freezing or deferring pay rises (24%)

Despite government intervention, permanent redundancies are expected:

• 15% of employers expect to lose up to 10% of the workforce

• 9% expect to lose between 11% to 49% of employees 

• 67% expect no change to headcount

Hiring expected to take a hit over the next few months as employers assess demand for products and services: 

• More than half (52%) said that all hiring has been frozen 

• A quarter (25%) said they would continue to hire but less than normal

• One in seven (14%) said hiring would continue as normal

• 4% said that would continue to hire and need more staff to cope with demand

A fifth of employers still expect non-key workers to attend their place of work despite lockdown measures for the UK being announced on 23 March:

• 15% of employers said that some staff have been asked to still attend a place of work despite not being classed as key workers

• 4% said that most staff are still being asked to go to their place of work despite not being classed as key workers

• 41% of employers said no staff were being asked to go to a place of work

• 30% of employers said some staff were being asked to go to a place of work as they are classed as key workers and 11% said most employees are still going to work because they are classed as key workers

Greater clarification is needed from the government on which workers are classed as keyworkers and which businesses classed as providers of essential services or goods:

• More than a quarter of businesses (28%) have found guidance either not very or not at all clear

• 54% said that it had been reasonably clear and 18% said it had been very clear 

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