Many employers expect to make permanent redundancies from Covid-19 crisis

Although over half of UK employers will look to furlough their staff, as many as one in four expect to have to make permanent redundancies because of the Covid-19 crisis.

This is according to a recent joint survey carried out by the CIPD and People Management magazine.

The survey looked into how employers are responding to the Covid-19 crisis with regards to managing their workforce, hiring plans for the immediate future and accessing government support.

The survey also found that 19% of employers have asked staff who are not classed as essential workers to still attend their place of work. This perhaps highlights the fact that many employers have found the government’s classification of essential and key workers confusing.

Other findings revealed:

Strong demand for the government’s Job Retention Scheme for employers facing workplace closures and/or a financial hit to their organisation. Employers are:

• Planning to temporarily lay off staff (furlough) through the Government’s Job retention scheme (52%)
• Asking staff to take annual leave (35%)
• Temporarily deploying staff to other parts of the business (26%)
• Reducing people’s hours (25%)
• Freezing or deferring pay rises (24%)

Hiring expected to take a hit over the next few months as employers assess demand for products and services: 

• More than half (52%) said that all hiring has been frozen
• A quarter (25%) said they would continue to hire but less than normal
• One in seven (14%) said hiring would continue as normal
• 4% said that would continue to hire and need more staff to cope with demand

Despite government intervention, permanent redundancies are expected:

• 15% of employers expect to lose up to 10% of the workforce
• 9% expect to lose between 11% to 49% of employees
• 67% expect no change to headcount

The CIPD is asking employers to look at all options available to them before making redundancies to help protect employees’ livelihoods and the future of their businesses.

Ben Willmott, head of public policy at the CIPD, commented, “This survey shows that many businesses are already considering redundancies, rather than utilising the Government’s Job Retention Scheme during the coronavirus crisis. Making redundancies should be a last resort once all other options for reducing workforce costs have been taken. Organisations that are most successful in protecting jobs and supporting their employees will also be those that are most resilient and best able to recover once this crisis is past.”

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