UK furlough scheme approaches end; companies face homeworking decisions

As the UK government’s furlough scheme approaches its 30 September end date, companies are making decisions on the future shape of their staffing, and when and how employees will return to offices.

Figures released at the end of August by the Office for National Statistics (ONS) showed that an estimated 7% of business workforces are on either full or partial leave under the scheme.

UK Chancellor of the Exchequer Rishi Sunak announced the furlough scheme — the Coronavirus Job Retention Scheme — last March, and it went live the following month. According to UK tax authority HMRC, a total of 11.6 million jobs have been put on furlough for at least part of the scheme’s duration.

One company that made the decision not to claim furlough funds was UK freight forwarder and port agency services provider Cory Brothers, a subsidiary of publicly listed Braemar Shipping Services.

Its finance director David Noble, ACMA, CGMA, said in an interview that last year, as the company was “still making money”, an early decision was taken not to claim.

He added: “What we … found was some of our competitors did furlough a number of staff and their customer service was impacted. And we actually picked up customers. … We wanted to have an eye on the long term.”

“We were taking on staff in preparation for Brexit, and those staff sometimes brought new bits of business with them or their contacts,” he explained.

The ONS’s other main insights in its end-of-August bulletin were:

Businesses currently trading

Transportation and storage remained the industry with the lowest percentage of businesses currently trading in mid-August, at an estimated 82%, compared with 90% of businesses in all industries, according to the ONS.

Noble suggested that the reforms of the IR35 off-payroll-working rules from April might have meant some haulage operators decided to close their businesses and instead take up jobs driving for supermarkets or other larger businesses. These have been offering relatively large sign-on bonuses amid the chronic lorry driver shortage, estimated by the UK’s Road Haulage Association at the end of July to be 100,000.

Debt obligations

More than three-quarters of businesses have high or moderate confidence they will meet their debt obligations, the ONS said.

However, almost half of businesses that had not permanently stopped trading reported that their debt repayments have increased over the past month compared with normal expectations, with 16% reporting an increase of more than 50%.

Increased homeworking

A total of 18% of businesses that have not permanently stopped trading intend to use increased homeworking as a permanent business model going forward; this percentage has remained generally stable since April 2021, the ONS said.

Noble said he was “still wrestling a bit with what the best solution is”.

He added: “We do want to give people the flexibility of working from home, but I think where we're going to end up with in finance and not necessarily for operations … [is] that we will insist that everyone comes in one day a week.

“Sometimes that will be within their own team … sometimes it'll be across teams, so we get that kind of cross-pollination.”

He said it would also be fine if staff wanted to come to the office more often than that — the company is not closing offices. Young staff members in particular benefit from learning in an office environment, and flexibility is also attractive when recruiting staff — two further factors in determining how and when staff should return to the office.

Other companies are grappling with the decision. Apple had planned an October phased return to offices but told its workers in mid-August that the earliest they might expect to return would be January 2022. In a 31 August blog post, Google’s CEO Sundar Pichai said the company’s “global voluntary return-to-office policy” would be extended to 10 January.

— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.