In the UK, the furlough scheme has supported over 11 million jobs since pandemic measures began back in March 2020. It has cost the government more than £66bn and the positive impact that its had on businesses and their employees has been significant.
However, it was always clear that support measures would come to an end eventually. So, with the scheme set to finish on September 30, 2021, how can accountants help their clients prepare for life after furlough?
I caught up with Natasha Prayag, head of content at Accountancy Age, Fraser Campbell, head of accounts and business advisory services at Azets, and Simon Michaels, CEO of HW Fisher Business Solutions, to discuss this issue in more detail.
Below are three key findings from this discussion for helping clients deal with the end of furlough.
1. Business planning has never been more important
Business owners might be wondering whether they will need furloughed staff back full-time once the scheme ends. Only time will tell. Some businesses might be fortunate enough to bounce back quickly, while for others, the pandemic will have more of a long-lasting impact.
Though predicting demand may be slightly futile, your clients should still conduct detailed business and scenario plans: if X happens, we will respond by doing Y. For instance, if a client’s demand is only 80 percent of pre-pandemic levels, then they will have to let staff go. But if demand is only 50 percent of previous levels, they will have to let go of more.
Conduct rigorous business plans for a range of scenarios. Show clients how demand impacts revenue, how revenue impacts their budget, and what this means for their workforce.
2. Consider the impact of new revenue opportunities
Many businesses have pivoted to cope with the pandemic’s economic impact. For instance, brick-and-mortar retail stores might have moved online to continue serving customers. Manufacturers may have diversified their offerings and started to produce medical equipment, only to realise that this could be a profitable avenue going forward.
Help clients assess these business opportunities, work out if they were just temporary fixes or if they are viable long-term revenue sources. If it’s the latter, then clients could consider redeploying some of their furloughed staff to work in this area – especially if other business areas aren’t performing as well as they were before the pandemic hit.
3. Invest in culture
This might surprise some of your clients. If employees are on furlough, they are no longer part of your working culture, right?
That is technically true. However, this could have a severe impact on your business if you suddenly look to reintegrate previously furloughed staff into your day-to-day operations. How can you motivate your staff who have spent the past year not working? How can you get everybody behind your company’s mission and values again, especially if these have changed since the pandemic began?
Don’t simply assume that furloughed staff will come in on their first day back raring to go. Invest in gradually reintegrating furloughed staff back into the company culture. Consider inviting them to social events where they can mix with the rest of the team safely while still not violating the rules of furlough (e.g. getting involved in the day-to-day running of the business).
By investing in your culture now, it will help avoid the inevitable teething problems that will take place when furloughed staff return to the workplace.
Want to find out more insights from our panel of experts? Watch the full discussion here.