Furlough: a guide for employers

This article was written on 9th April and published on 14th April. Changes in the law or guidance from the government since that date won’t necessarily be reflected below.

The word “furlough” wasn’t in most of our vocabularies a couple of months ago, and now it’s one of the most prominent things on people’s minds.

I’ve put together this article to clear up a little confusion over what furloughing is, and also to offer some practical and emotional guidance for employers during this time.

What is furlough?

If you are unable to maintain your current workforce levels, whether through not having the work or not being able to afford the cost, then you can furlough employees.

This places them on a temporary leave of absence, and allows them to “apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.”

“This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.”

For full information on who is eligible and anything else, check Gov.uk here.

It’s okay how you’re feeling

Whatever you’re feeling right now is normal. Maybe it’s anger or sadness, or maybe there’s a bit of relief in there.

Don’t judge yourself for how you’re feeling – whatever is floating around is simply part of the process, and everyone is going to respond in different ways.

All I can say with this is it’s not your fault. 

Your business is being impacted by something completely out of your control. 

Not only that, but the impact it’s had on the world and on society is total; it’s impacted pretty much every single facet of our lives in some way, so of course businesses will be feeling it hard. 

The best medicine for this is to talk it through with someone. A partner, a friend, a family member, a colleague – anyone that you trust and that can appropriately hold emotional space for you. 

Often, with things like this, we don’t need to go looking for answers. We just need a space where we can soundboard. 

A problem shared is a problem halved and all that. 

And you don’t need to take on the guilt of whether your employees will be okay or not. Of course you’ll be worried about them, and that’s natural.

But in terms of them figuring out their financial situation or mental health, there’s support in place for them to turn to – we’ve signposted some of that below.

What’s the right level of honesty with your teams?

It’s not a nice time for anyone right now. However people are feeling, the uncertainty, worry and doubt will simply compound that.

When people don’t have answers or clarity, their minds begin to wander. Anxiety and self-doubt rear their ugly heads, and people begin to make up their own stories to fill in the gaps in their knowledge. 

And, at a time like this, these stories aren’t always positive.

The more honest and clear you can be with your teams, the more you’ll help to remove anxiety and worry. 

The level of honesty you want to go to is ultimately down to you, and there’s an argument for “ignorance is bliss”. 

At Sanctus, we have made the decision to be as transparent with everyone as possible – with investors, employees and contractors receiving the same email. We trust that people are able to process the information and do what they need to do to support themselves. 

If this isn’t right for you and your company, fair enough. 

But where possible, do what you can to remove doubts from people’s minds. 

Supporting employees

Employees placed on furlough can’t engage in any activities or decision-making within the business that contribute to business revenue. 

So, this doesn’t mean you have to cut complete ties with your employees. They can still be involved in team meetings, and you can still organise virtual socials or water-cooler chat replacements to ensure that connection is maintained amongst the team. 

If you’re looking for extra support for your employees, you can find some directions from Mental Health UK.

We also have the Sanctus Directory, which is a list of free and paid services for people’s mental health, so you/your employees may find something useful in there.

Now’s the time to be human

Times like this hold up one big mirror in front of the world, and reveal true character.

Without naming any names, we’ve already seen plenty of stories in the media about businesses who probably haven’t handled things as well as they could.

People will have memories that last far beyond the Coronavirus.

So however you need to approach furloughing, all I can say is remember to be a decent human being. 

Put humans at the heart of your decision-making, with the commercials wrapped around that, not the other way around.

No-one is judging business leaders that are having to make tough decisions right now.

But they are judging how they make them.

How to deliver the news

If you need to furlough an employee or a number of employees, the best advice I can give is to remember the above – being honest and being human. 

It’s not a nice situation regardless of how it’s dressed up, but you’re not to blame for that. 

But judgement can and will be passed around how the situation is handled.

I’ve read about some companies using group Zoom calls to deliver the news of redundancy to hundreds of employees at the same time, in a call that lasted about 3-minutes total.

It’s not an easy thing to do delivering news like that, and no one enjoys the process.

But it’s important to treat your employees with the respect that they deserve at this time – face-to-face is obviously off the cards, but there’s no reason virtual one-to-ones can’t be booked in. 

Acknowledge that it’s a difficult situation for everyone, including yourself, and explain to them the position of the business and why they’re needing to be furloughed.

Give them as much detail as possible – do you have a timeline or action plan in place? If you do, talk it through with them.

If you don’t, be honest and let them know you’ll communicate with them as the situation develops.

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For a comprehensive article on employment help during Coronavirus, MoneySavingExpert’s guide here is very useful.