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European employers expecting to shed staff as government support dries up

More than half (59%) of European employers are expecting to make staff redundant once government support comes to an end, according to new research from employment and labour law practice Littler.

Only 17% of respondents to Littler's European Employer COVID-19 Survey Report said they did not expect to reduce their workforce following the end of wage subsidies.

Most employers are expecting job cuts to happen quickly, with 63% saying they would begin to implement reductions in staff as soon as the law allowed, before the government schemes ended or within two weeks of their expiration. Just 10% said they would wait three months or longer.

Speaking to HR magazine, Stephan Swinkels, Littler’s coordinating partner international, said: “As government support winds down, we do see so many companies restructuring their workforce in one way or another. It doesn't always need to be terminations, it can also be restructuring them by terminating locations and asking people to work from other places.

“If we do end up with a second wave, my prediction is that there will be a second, third or even fourth batch of government support measures, there is no way around it.

“I think most governments have learnt from the first batches what worked and what didn't work, and just pumping money and making it available is not the right thing. Governments are looking at strategic sectors or industries that they want to support, and they must also have some political clout.”

The report also looked at remote working practices and found that in the wake of the abrupt shift from the office to home working at the start of the pandemic, respondents expect the top long-term, positive implication on the workplace to be a greater acceptance of the benefits of remote work.

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Forty-one per cent of employers surveyed said they are making or will make changes to their remote working policies to allow for more flexibility, as long as employees continue to demonstrate productivity while working from home.

An encouraging 80% of respondents said they are requiring or considering requiring more employees to work remotely either somewhat or to a great extent.

The main reasons for considering this shift were allowing for greater productivity of employees (41%), addressing the difficulty and cost of implementing new safety measures (38%) and allowing for the closure of offices (25%).

Swinkels said: “Productivity depends a bit on the sector, but people are working even harder sometimes than they used to in the office, they're more efficient and willing to work longer and more flexible hours, so I do think that this will structurally change the way we work.

“But softer productivity is more difficult to duplicate from home – the social communication between employees, the DNA of a company and the loyalty and the identity that a company can have. It's also more difficult for new people to onboard and integrate.”

Littler's research also found that most employers are taking at least some action to address their employees’ mental health and wellbeing during the pandemic.

Fifty-seven per cent of respondents have offered their staff more flexible work schedules while 51% have asked for frequent feedback on their organisation's pandemic response.

Littler's European Employer Covid-19 Survey Report was completed by 758 HR professionals and in-house lawyers across Europe in late July and early August 2020.