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Job Retention Scheme could be a ‘waiting room for unemployment’

Employers want to see the coronavirus Job Retention Scheme (JRS) made more flexible and extended to at least the end of September, according to a new CIPD survey.

The CIPD warned that without these changes, the JRS could prove to be a “waiting room” for unemployment and fail to protect the large numbers of jobs it set out to save.

More than three quarters of employers that have furloughed staff (76%) or plan to furlough staff (78%) said that making the scheme more flexible to enable furloughed staff to work reduced hours would be useful.

Almost half of employers surveyed had already furloughed staff, with another 10% planning to do so in the future.

The CIPD said changes to the scheme to allow short-time working would help to protect jobs, support businesses and reduce the burden on public finances if employees could work in some capacity.

Seventy per cent of employers using or considering using the scheme said up to half of their furloughed staff could work reduced hours.

Peter Cheese, CIPD chief executive, said: “Letting furloughed staff work some hours, where possible, will enable organisations to bring back workers from furlough gradually while rebuilding their business.

"This will be vital as lockdown measures are eased over a number of weeks or months, and will reduce the risk of large-scale redundancies in this next phase of the crisis. ”

Extending the JRS by three months to the end of September was valued as the most important labour market policy change to help deal with COVID-19 by 60% of employers.

So far, just 7% of employers have made redundancies in response to the pandemic, with a further 12% planning to. The figure would have been inevitably higher if the scheme did not exist.

Cheese said the extension of the scheme would mean there was no ‘cliff edge’ exit from furlough straight to redundancy for workers.

“We need to see employers weigh up the ethical, legal and financial considerations of using the scheme, to act openly and responsibly to ensure that a more flexible system is not abused, and that public money goes to the businesses that need it the most.”

The Department of Education has launched an online skills platform for employees placed on furlough.

The Skills Toolkit gives people access to free, high-quality digital and numeracy courses to help build up their skills, progress in work and boost their job prospects.

All courses are online and flexible so people can work through them at their own pace.

Sarah Hernon, principal consultant at Right Management said employees must be able to adapt to changes to the labour market post-coronavirus.

She said: “It is important that people are preparing to adapt to this change. One thing to note is that businesses must ensure they are approaching this in a sensitive manner by taking into account the current climate and the impact is having upon the mental wellbeing of staff.”

The CIPD survey was carried out online by YouGov and surveyed 178 senior decision makers in UK employers between 17t to 23 April 2020.

Further reading:

Employment law enquiries surge in wake of furlough scheme

How to successfully navigate virtual performance management

Happiness key to performance of employees during lockdown

Managing workforce changes as government guidelines set in