express– Furlough pay has kept millions of people employed throughout 2020 as several industries may have struggled to survive without government support. Rishi Sunak has extended the scheme a number of times despite expressing shortcomings at times and while this has been hailed as crucial by many, others are fearful of the long-term damage these measures may be creating.
market for fear of losing their cosy government funded blanket.
“Perversely, it also denies those companies surviving that need people now, access to a large pool of talent locked away in the furlough scheme.
“Extending the furlough scheme further will breed yet more zombie companies who are being propped up under increasing debt with no hope of survival once the Government gravy train comes to an end.
“Delaying the inevitable whilst racking up generational debt will be viewed in hindsight as reckless incompetence for political gain.”
Similar sentiments were shared by Laura Welsh, the Head of HR at LHH UK & Ireland, who warned efforts from employers and their employees will be needed to avoid worst case scenarios.
In a bleak prediction, Laura detailed that no matter how many times the furlough scheme or other measures are extended, thousands will still lose their jobs: “The UK Government’s furlough scheme is credited with helping to save millions of jobs from redundancy in the short term, however there’s no escaping the fact that redundancies will be inevitable.
“The initial extension of the scheme back in October meant that many organisations had been holding off making these tough decisions, yet we are starting to see renewed swathes of jobs losses as the reality of the pandemic starts to come into effect.
“This extension of the scheme is definitely welcome for those industries facing even further disruption as a result of further lockdown measures, however it is crucial that organisations do not use this time to delay the inevitable or procrastinate.
“How organisations handle this issue will have a lasting and long term impact on staff productivity, brand reputation, employee morale, company performance and the wider economy.
“It is therefore vital for organisations to start workforce planning now, if this has not been started already.
“This should include alternatives to redundancy including redeployment and reskilling for the creation of an agile workforce.”
This was quantified by John Whelan, the CEO of My Digital and former HMRC advisor.
As he detailed: “When the furlough scheme ends in April, many workers will sadly be made redundant and we predict we’ll see well over three million people unemployed.”
Despite this, there may be some hope for employers who can work relatively flexibility, as John explained: “Permanent work continues to remain uncertain, with unemployment rising to 4.9 percent over the past three months.
“However, flexible working is emerging as the backbone of the UK economy, with the Office for National Statistics already showing a four percent increase in flexible workers in its latest labour market overview report.”
The Office for National Statistics released huge swathes of data in November which showed government spending is set to reach over £300billion as the state pours more money into their support measures.
There are fears this debt will hold back the UK for many years to come, with many warning tax rises and lower standards of living could be on the horizon.
Despite all of the negativity, it should be remembered there are a vocal group who believe all of the spending has been justified and worth it thus far.
Martin Hathaway, the Managing Director of the Mid Yorkshire Chamber of Commerce, examined the tough decisions the government has been forced to face and ended on a hopeful note: “The Government has to make difficult decisions and there is a fine balance between the economics of continuing to fund the furloughing of staff or supporting those made redundant, both during any period of unemployment and then back into the workplace.
“From my perspective, the businesses across the mid Yorkshire region feel that the furlough scheme comes at a cost worth paying as it means businesses are able to retain and support staff even through these insurmountable hardships.”
