Small business has been hammered by pandemic fallout over the last 18 months, and as furlough comes to an end, and the nation begins to open up again, things are about to get more complicated.
Chief Executive of the British Retailers Association, Andrew Goodacre, made headlines earlier last year with his criticism of government initiatives to pull businesses out of the red:
"The Kickstart scheme will be a challenge for retailers as it is only for new jobs – redundancies are more likely. Meanwhile, the £1,000 bonus in January next year for keeping staff on after furlough ends is not attractive enough as many retailers will have to deal with stark realities."
It’s a fair point to make. The Kickstart scheme is likely to help larger companies, those which have bustled through the pandemic and come out the other side untethered, and will offer them a chance to add to their profits. But it’s likely if you’re an SME stakeholder, you’re looking at the job market and gritting your teeth for what comes next.
So with a return to normality now on the horizon, what does this mean for the ever-present furlough scheme that has been the topic of much debate for the last 18 months?
Let’s have a look at the most recent furlough figures below up to the 30th of June.
From September, the government started paying 60% instead of 80%. By making it more expensive for employers, the hope was that they take on their staff full time again.
The Institute for Fiscal Studies says the bill for employers keeping a member of staff on furlough would rise from £155 per month in June, to £322 in July and £489 in August and September.
According to analysis from the New Economics Foundation (NEF), once the furlough scheme ends, a further 850,000 jobs could be put at risk of becoming redundant or seeing a reduction in hours or pay.
But will it really?
ONS data in August showed vacancies hitting a record 1 million in the UK, and employees on payroll being still down 201,000 compared to before the pandemic.
It could be argued furlough is clogging up the job market and needs to be ended sooner rather than later. The reluctance to return to work from furlough may be due to some on furlough undertaking second jobs in sectors like food retail that boomed in the pandemic.
Food retail may then suffer an exodus of some staff, whilst the struggling hospitality, Leisure and Retail sectors may find workers returning and recruiting becomes easier.
So perhaps the answer is large-scale musical chairs.
The data from our talent intelligence unit, JobBrain™, shows in the last 3 months the most common reason for recruitment is ‘replacement’, indicating that employees are starting to leave to move to other jobs.
After all, a report of a prudential survey in The Economist in April warned that 42% of surveyed works said they would resign if forced back to full-time office-based working.
Our data also tells us that 25% of candidates are seeking employment due to being unemployed or about to be unemployed. So it does show that yes, some sectors or specific employers are needing to let people go, but they are clearly the minority of candidates, and there are a lot of vacancies for them.
While the statistics we have gathered point to a positive and encouraging end to furlough, we will only truly know the impact when it finishes at the end of this month. October will be a key month in the furlough scheme timeline when it comes to assessing the end impact. Recent data suggests not as many redundancies have occurred as expected, but we must be wary of this being a true reflection of how many are to come.
As we move into Autumn and Winter, will we see another big spike in COVID cases? Will we see another nationwide lockdown? These are not out of the question scenarios and would incur a huge impact on the job market and potentially the furlough scheme if re-introduced.