As Rishi Sunak considers fifth furlough extension, Beyond HR Managing Director Neil McLeese explains what this means for businesses across the country
As the lockdown looks set to continue for the foreseeable, it is predicted that the chancellor will extend the job retention scheme into the summer.
The scheme, in which the government pays up to 80% of employee wages, up to £2,500 a month, was supposed to end on 31 March before being extended until the end of April 2021 following the tightening of restrictions due to an increase in Covid cases.
However, as the vaccination programme continues to flourish, with all adults projected to receive their jabs before 31st July it appears likely that we will see a semblance of normality going into the second half of the year.
Therefore, this is likely to be the last extension of the job retention scheme, news that will be welcomed by employers and employees alike. Many businesses are unable to open due to the tightened measures and the current plans to end the furlough scheme in April puts huge financial pressure on employers. The reality is, without the support, many businesses may be forced to close permanently.
With many businesses struggling to navigate their new landscape post Covid-19, extending the scheme may allow them to avoid starting redundancy processes, where they are forced to reduce their workforce, including trained and experienced employees.
Redundancy can be expensive, time consuming and emotionally challenging for all parties involved and it is not something firms want to venture into without a clear longer-term view. With things set to improve in the latter part of the year, demand for their offering may increase, forcing companies to go through recruitment and induction processes that can be costly and time-consuming.
Therefore, an extension of the job retention scheme gives businesses the opportunity to future-proof their business – putting clear strategies in place that will ensure longevity and survival.