Managing your employment costs in the COVID-19 crisis

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The past few months have been intensely stressful for business leaders in organisations of every size and in every sector.

At Vero HR we have been inundated with calls from clients and contacts needing advice and HR support services to manage the people issues that have arisen through the coronavirus crisis.

Beyond the initial stage

Most organisations have now successfully navigated their initial, urgent responses: the rapid shift to temporary homeworking, closing offices, streamlining business processes and furloughing employees. But as we settle into this ‘temporary phase’, fresh developments and gaps between the Job Retention Scheme and employment law are creating uncertainty.

Let’s explore a few important considerations for leaders and people managers in these unusual times.

Job Retention Scheme – an evolving support

Let’s face it, nearly everyone in the UK needed to google the word ‘furlough’. It didn’t have any UK employment meaning at all and yet has since become one of 2020’s most used terms.

First, it’s worth looking at some of the grey areas and the ever-evolving government position. New developments are unavoidable, given the incredible timescales within which the scheme was introduced – but inevitably caused a few headaches.

One example was the decision enabling companies to rehire an employee that chose to resign – if they left your organisation before 28th February 2020 – and you were strongly encouraged to rehire them and place then on furlough. While this was of great advantage to the employee, there are certain gaps in the position. One example is whether the employee would continue to accrue holiday entitlement having left and then rejoined – a cost that employers would have to swallow.  

There was uncertainty too for quite a while around annual leave and bank holidays generally. It wasn’t clear whether employees can take – or be required to take – annual leave during furlough and if so, what remuneration they would be entitled to.

Employers have been concerned not to breach furlough scheme rules and invalidate their claims, or be hit with expensive penalty charges.

At times, it’s felt a bit like a Formula One race, with new rules being introduced on lap 10, 20 and 30 that apply retrospectively to the beginning of the race.

And then perhaps the most significant shift of all, understanding the wider implications/uses of the scheme from what initially was a “Job Retention Scheme” to what quickly also became an employer-sponsored unemployment benefit programme. Seeing it from this perspective gave employers the ability to apply it in different ways, albeit with gaps between this new concept and existing employment law.

Employee engagement is more important than ever

How you manage your way through the coronavirus crisis is important. Every organisation today is keenly focused on employee engagement – recognising that employees that feel informed and cared for will stay loyal, go the extra mile and help you achieve your goals.

Something we have all seen in recent months is that in a crisis situation everyone responds differently. Some people thrive on the challenge and sense of purpose, while others are fearful and, understandably, prioritise their loved ones over work.

Be aware that your employees will remember this time vividly – and particularly how you, as their employer, managed the situation. Not everyone will respond to a call for the ‘Dunkirk spirit’, just as some people would rather continue to work than be left isolated at home.

As always, regular and honest communication with your people is crucial to drive their understanding and loyalty.

Your external reputation is key

Remember, too, that in these unprecedented times people are talking more than ever through channels such as social media. Companies that are taking great care of their staff and customers will be remembered. Meanwhile those that are seen to be putting their people at risk for no additional reward may find they face new challenges once normality eventually returns.

Every organisation is facing new and daunting threats right now. Every decision is important, so seek expert advice and consider each step carefully.  Leading an organisation today is a balancing act. We must protect our people while ensuring they have a robust and stable business to return to when the crisis finally comes to an end.

Interested in finding out more? Take a look at Vero Insights article Strategies for reducing employment costs.

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