To Furlough or Not To Furlough?...

We’re now 8 months into the grip of the Covid pandemic and whilst I appreciate that the Government has not always covered itself in glory in its handling of it, I still respect the nature and scale of what they have managed to turn around in terms of supporting people and businesses.

As someone that deals with HMRC on an almost daily basis, I have had my fair share of frustrations with them over the years. But I take my hat off to the way they have set up, delivered and supported the various payment schemes and deferments that many of us have been beneficiaries of. 

Think about the employees

Working with as many different businesses as I do, I know there is never a one size fits all approach and even with the breadth of the financial support provided by the Government, some have still lost out heavily. Perhaps it is for this reason that I am starting to develop a bit of a moral issue with Furlough. Not the scheme itself, but the message that continued subscription to the scheme when not entirely necessary, sends to employees and those that have missed out.

I do not doubt that the majority of those still utilising furlough need to do so. All those that are forced to close their doors and their respective supply chains absolutely should draw on this support. Early on, I estimate that 80% of my clients decided to furlough some or all of their employees. During the summer, and as the scheme changed, many brought staff back either fully or using the flexible furlough option. With the latest lockdown being announced, some have opted in to phase 3 of furlough for the first time, as the seasonality of their work means they will be adversely affected in November and December. This is, in my opinion, exactly what furlough was intended to do.

Taking advantage of Furlough

My issue sits with those who openly claim to be ‘taking advantage of furlough’ – keeping staff at home and gladly allowing the Government to stump up 80% of their salaries.  In one recent example, I heard of a local company, whose trade, whilst initially impacted has now returned to near normal levels, admitting (in front of said employees) to keeping some of their highest paid employees on flexible Furlough. I feel for those employees and I think this kind of abuse of furlough will live long in the memory. What message does that kind of talk send to the employees? We don’t need you, I resent paying you? And how does that make the employees feel? Worthless, left sitting at home whilst business continues, making profit on my salary…? Whilst some will be enjoying the break, I am increasingly reading about the impact to morale and mental health of not being actively engaged in work.

I have no doubt that this is an example of a very small minority but the short-sighted mentality behind it beggars belief. This is NOT free money. We’ve all got to play our part in paying this back. With the bill running into the hundreds of billions, we will be paying this down for decades. So, am I wrong in thinking that if you can bring your employees back, you should do so, morally, if nothing else? For their benefit and in some small way to lessen the long-term financial impact of this wretched virus.   

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