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How to navigate the end of the furlough scheme

July 3 2020 by Paul Bulpitt

The new flexible furlough scheme is now live and business leaders across the country are having to make difficult decisions. BBC News reported that 12,000 people faced losing their jobs in cuts announced in a 48 hour period.  

Under the new scheme, you’ll be able to bring back previously furloughed employees for any amount of time and on any pattern of work and claim a grant for the hours not worked.

How do you decide how or when to bring employees back from furlough?

Firstly, it’s important to be clear about how urgent it is to be making these decisions now and not waiting. We saw when the furlough scheme was initially introduced that those businesses that acted most decisively, fared best. Decisions around your team structure are not going to get any easier the longer you leave them.

There are broadly three main considerations as to how, when or even if you bring people back from furlough – resource, cash flow and cultural:

  • What resource do you need now or are you likely to need over the next six months?

You can use the flexible furlough scheme to adjust your resourcing levels far easier than under the original scheme. You can now bring people back part-time and gradually increase their hours over the coming months.

However, if you know now that you are not going to need these employees for the next six months or so, now is the time to consider redundancies or other ways of laying people off. Obviously, please do get professional HR advice before making any changes to your team.

  • What are the cash flow implications of bringing people back or making redundancies?

As you consider your options and the various scenarios, it’s worth considering the cash flow implications of bringing people back to the business. How much will it cost to bring employees back part-time and can you afford it? Conversely, how much will it cost to make someone redundant?

One cash flow consideration is that if you have to pay out an employees notice period, you can still use the furlough scheme to do that – another reason to act now.

  • What is the cultural impact of any changes you make? 

The cultural implications of this crisis will be long-lasting. Clearly, the financial health of the business is important – but also make sure you think about how any changes will impact your culture. How can you bring your team on the journey with you? How can you share your decision-making process? Transparency with your team will help reduce ambiguity and any uncertainty they may be feeling.

How can Wow help?

At Wow, we have developed a range of resources to help you navigate this period. I hope you find them useful. If there’s anything else we can do to help, please get in touch.

  • New template letters on our support hub to bring people back from furlough and to move people to the flexible furlough scheme
  • Wow clients have access to Wow’s HR helpline for expert advice on how to navigate the legal process of making any changes to your team
  • Wow clients and their team also have access to Wow’s Friend in Need service if you need someone to talk to or some emotional support at this time. Next week sees the start of the next round of client-only Wow Workshops on the subject of scenario planning. At no extra charge to Wow clients, these workshops will help you plan for a range of eventualities
  • We also saw this week that Headspace is offering free one-year subscriptions for those who are furloughed or have been left unemployed due to the pandemic. We thought this would be nice to share with your teams.
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