Employers planning reduced working hours

Thirty-three per cent of UK employers plan to reduce working hours, cut pay or impose leave in the face of COVID-19

A survey from the Reward & Employee Benefits Association (REBA) has shown that while most employers (59%) have made no changes to contracts since COVID-19 hit the UK, a significant one in three (33%) plan to do so.

According to the survey, the most notable changes expected to be made to employee contracts would be deferred or reduced pay rises (44%), cancelled pay rises (31%), and reduced working hours (25%).

Other expected changes included the offer of extended sabbaticals (25%), deferred or reduced bonuses (19%), cancelled bonuses (13%), reduced pension contributions (13%) and enforced unpaid leave (6%).

Debi O’Donovan, director of REBA, which conducted the survey, said: “Just as we saw in the 2008 economic downturn, some employers are being quick to turn to reduced hours and enforced unpaid leave as a temporary way to reduce wage bills.”

However, O’Donovan also thought the smaller number of cancelled bonuses perhaps indicates that employers see the current situation as temporary, and know they will need to retain vital staff to prepare for a post-Coronavirus business recovery.

The REBA survey also found that employers have been using employee benefits and wellbeing programmes to support employees.

Seventy-three per cent of employees surveyed said their employers had offered them mental wellbeing guidance for remote working.

Speaking to HR magazine, O'Donovan said many businesses across sectors are already planning for an aggressive recovery.

“The economic dive will be deep and sharp, especially in the service sector, but so will be the comeback,” she said.

O’Donovan suggested that how HR deals with cuts and freezes now will either help or hinder that comeback and could damage an organisation’s employer and consumer reputation.

She added: “Take time to think about your business' future growth strategy in a few months before you act on any pay, benefits or working hours changes too quickly.”

The survey was conducted on 17 March and again on 19 March 2020.

Responses primarily represent medium to large workforces; 60% of responding businesses had more than 1,000 employees and 28% had 250 to 999 employees.