02 September 2021

Furlough Is Coming To An End | What Does This Mean To Your Business?

Furlough is coming to an end – what does this mean to your business? Hero Image

The Coronavirus Job Retention Scheme Ends 30th September 2021…

HMRC’s Coronavirus Job Retention Scheme, more commonly known as Furlough, is coming to an end on 30th September 2021. This means that the government will no longer partially fund any employees who you have put on furlough, to retain their job when trade has been disrupted due to COVID.

With around £70 billion paid out to employers under the CJRS since it’s launch in April 2020, it’s estimated that there will still be 2 million job roles on furlough at the end of the scheme.

If you’ve had employees on furlough, are you ready for this?

Bringing staff back to work brings new challenges physically and financially. Is your business prepared for the extra costs involved, not only through increased pay, but also providing office space, heating and water?

Use your cashflow forecast to ensure you have the reserves available to bridge the gap until you’re business is back to full operation and remember to factor in all costs!

Can your cashflow sustain these employees coming back on their full pay?

Being pragmatic and dealing with financial shortfalls early on is far better than ignoring them and letting issues mount up. If your cashflow can’t sustain employees returning on full pay you’ll realistically have two options; reduce pay (if possible) or reduce costs elsewhere.

Using your forecast could highlight potential savings that are needed for staff pay.

Will you have to review your workforce and make some redundancies?

If you’re struggling to make ends meet and there aren’t any viable options for reducing costs elsewhere, it could be time to talk to your staff.

Unfortunately, COVID has created many redundancies throughout the UK, across all sectors so you wouldn’t be alone. Speak openly and honestly with staff and see if an agreement can be made to potentially reduce hours or pay, minimising the overall impact on your workforce and reducing job losses.

Will everything be OK and you’re looking forward to being back to a full team?

It’s not all doom and gloom! If you plan your finances right your business could be thriving post-furlough. Whilst working from home has thrown up some exciting challenges and opportunities, bringing your workforce back together can kick start your trading, giving you the impetus to grow.

Use your cashflow forecast to plan future growth and outline the positive impact on your business. With this in hand, you should have a better time of bringing your full team back to work.

You can only answer these questions if you’re armed with the information in a forecast. Better to have sight of a potential problem than not being able to make payroll payments in a few months. Better to know that business is coming back up and cashflow will be able to carry the team back to full strength if you keep getting that bit busier. You make better decisions, not only for you and your business but also for your team, when you can see what’s coming.

Any staffing changes, particularly redundancies, need to be carried out in accordance with HR protocols. Please seek the advice of HR professionals as part of any restructuring process.