One in four employers expects permanent redundancies

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Date: 7 April 2020

Employee putting all of his work belongings into a cardboard box

In spite of a raft of support measures put in place by the UK government, many employers expect to make permanent redundancies because of the coronavirus crisis.

A survey of 301 HR professionals, conducted by HR body the CIPD and People Management magazine, has looked at how employers are responding to the COVID-19 crisis in terms of managing their workforce and hiring plans for the immediate future.

The findings show that 52% of UK employers are looking to furlough their staff; however, it also shows that one in four expects to make permanent redundancies due to the coronavirus crisis.

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, said: "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."

Key findings from the survey include:

  • 52% of employers plan to furlough staff through the government's job retention scheme;
  • 35% are asking staff to take annual leave;
  • 26% are temporarily deploying staff to other parts of the business;
  • 25% are reducing employee hours;
  • 24% are freezing or deferring pay rises.

Despite government intervention, permanent redundancies are expected:

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

Hiring is also expected to take a hit over the next few months:

  • 52% said that all hiring has been frozen;
  • 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.

Meanwhile, a survey of employees by Toluna and Harris Interactive has found that 70% of UK workers are confident their employers can get them through the pandemic crisis. The poll of 598 employees in the UK found that 77% of employees feel their employer was "at least somewhat prepared" to handle a crisis and 90% say their employers are doing everything they can to protect the personal safety of them and their colleagues.

Written by Rachel Miller.

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