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- Ceri Thomas, Editor and Partner, Tortoise Media (Chair)
- Rain Newton-Smith, Chief Economist, CBI
- Susan Raftery, Senior Advisor, ACAS
- Chris Johnson, Senior Partner, Mercer
The government’s new economic measures
It’s been a frenetic and sobering couple of weeks for everyone – with a spike in cases and additional restrictions for businesses and the public to contend with. According to Rain Newton-Smith, the CBI’s Chief Economist, businesses need three things from the government: Firstly, to announce dates and timeframes as far ahead as is reasonably possible, as this enables businesses to plan ahead. Secondly, be clear on the evidence behind decisions. Many hospitality businesses are questioning the logic behind the 10pm curfew, for example. And finally, economic support measures need to be announced alongside new restrictions, not afterwards.
The new measures have been largely welcomed by businesses. The Job Support Scheme (JSS) – which was brought into smooth rising unemployment – won’t save every job or every business, but many businesses have told the CBI that it’s a lifeline that’ll help them get through the winter months. But of course, others don’t think it’s gone far enough.
Also, the second big set of measures, which haven’t had the same level of attention of the JSS, are around cashflow support. Deferring VAT payments for a year, for example, is worth about £38bn to businesses across the whole economy. And extending the loan repayment timeframe to ten years means businesses’ monthly repayments have been almost halved, giving them vital breathing space.
How to support viable jobs
One of the biggest challenges for businesses at the moment is deciding which jobs are viable for the future, and which aren’t. And this challenge is even bigger in the hardest hit sectors, such as aviation, transport, hospitality, arts, entertainment & leisure, and events. Will jobs in these sectors be viable over the medium-term? It’s difficult to say.
An advantage of the JSS is that, while employers do have to contribute towards non-working hours, this contribution is relatively modest compared to if there were no support. Businesses may not be able to keep all staff, but the scheme should enable them to keep most of them on. The idea is to keep more people, on smaller worker patterns. This also enables staff to train in non-working hours, meaning that when demand picks back up, businesses can scale back up quickly.
How does this situation compare to the last financial crisis?
According to Chris Johnson, Senior Partner at Mercer, there’s a big difference in the current situation compared to the last financial crisis: “If you go back to 2008, it was a Finance Director that guided companies through the crisis. Now it’s an HR Director”. Today, businesses are taking a much greater interest in their people and protecting jobs, and the response to this crisis has been much more people centred.
Many companies are restructuring, but it’s not just those who are having a ‘bad’ pandemic. Even companies having so-called ‘good’ pandemics (at least in terms of business performance) are looking at how they reshape their business to fit with the new circumstances. Redundancies will happen, but they must be managed well. Another difference now is that companies are thinking about how they can make their people more adaptable, so they can move into the new jobs that emerge out of the crisis.
ACAS’s experience of the pandemic
Susan Raftery, Senior Advisor at ACAS agrees that things feel different to 2008/09. In June/July, ACAS saw a 160% increase year-on-year in calls about redundancy, as well as an increase in employment tribunal claims. But this time, there are a lot more SMEs going through these situations. And many smaller organisations don’t know what to do.
Susan added that ACAS are finding that people have better relationships with their employers, and employers are being much more open about redundancies – as well as making less knee-jerk decisions. The key thing here is that businesses are trying to involve people in their decisions. But redundancies will happen – and it’s crucial that employers ensure those who are kept are as engaged, happy and productive as possible. Both employers and employees are trying to work towards the same goal, and we need to ensure we don’t lose all that goodwill.
So why this change? Susan feels that in 2008, it was more about blaming people. This time, people understand that the pandemic is nobody’s fault. And in the early days of the crisis, some employees were even agreeing not to be paid so their employer could take stock of the situation. “It doesn’t feel so much ‘them and us’ as it did previously”, Susan added.
The importance of mental health
Mental health was rising up the agenda for many organisations, even before the pandemic. One of the most crucial aspects is supporting people both those in the workplace and those working from home. Some of the statistics on the impact of the pandemic on mental health are frightening, and employers are much more aware of this. Susan thinks that it’s crucial businesses have people in their workplaces who are confident to talk about mental health, as this can help eradicate the stigma around this issue. And ACAS are seeing a lot of employers asking them how they can help their employees with their wellbeing and resilience. Employers weren’t really talking about this 10 years ago.
Chris added that employers know how hard this situation is on staff. Working from home all the time brings unique challenges, and eight hours of videos calls a day isn’t the right way to work. Also, people have responsibilities to family, and that’s OK. In addition, when on team calls, line managers need to spend time talking about how people are feeling, not just focusing on work.