The CEO of Altrincham and Sale Chamber of Commerce has backed growing calls to modify the Coronavirus Job Retention Scheme (CJRS) to better fit the needs of small businesses.
Sue Aldridge said the Government’s support package was not working for many of the 200 local businesses that her Chamber represents, many of which are small and independent.
While welcoming the Government’s landmark offer to provide 80 per cent of salary to furloughed employees, business owners say some kind of part-furlough scheme is desperately required to prevent problems which they say could cause workforce resentment and hamper business recovery.
To help keep them ticking over during the coronavirus crisis, many businesses need skeleton staff to carry out, for example, administrative and sales roles.
However these staff are often not needed on a full-time basis so cannot be paid for their full hours, while conditions of the CJRS say that furloughed employees receiving Government support must not do any work at all.
The situation is leaving many employers struggling to balance the need for the work to be done with the unfairness of asking some employees to work reduced hours for significantly less pay, while their colleagues take 80 per cent pay for sitting at home in the sunshine.
Ms Aldridge said the Government’s support package was not comprehensive enough and offered an ‘all-or-nothing’ element to it. She has supported a growing consensus behind a revision of the system to include an option to ‘part-furlough’, a move first suggested earlier this week by HR expert Jill Bottomley of The HR Dept Trafford and Warrington.
“Once more, policies are aimed at big corporates but they’re far from ideal for smaller firms,” she said. “The resentment that the inability to part-furlough is causing is a serious issue.
“I think the 80 per cent offer was very generous but did not promote continuity of business. Other countries have given a set amount to provide people with a basic living need and I think we should have done something similar. An ability to part-furlough would have been more practical and would have given businesses more incentive to keep on trading. It has to be the way forward.”
The HR Dept is a UK-wide business which provides outsourced HR advice and support to more than 7,000 SMEs through a network of expert licensees. Ms Bottomley represents numerous clients in her territory of Trafford and Warrington who, despite being grateful for the lifeline of Government support, have raised the same issue with her.
“For many businesses, the furlough system is extremely welcome,” she said. “However, there are some serious business issues that have not been addressed. If not acted upon swiftly they will cause significant employee relations rifts, commercial decisions being made for the wrong reasons and a ‘split’ workplace and society, at a time when we have to be more collaborative and deal with this health crisis together.
“The ‘all or nothing’ aspect of the CJRS furlough system means that business owners are either forced into invoking or agreeing short-term working terms with employees they need to continue, doing the work themselves or not doing the work at all.
“None of these situations are ideal. The first solution has great potential to cause resentment between employees kept on for less pay, versus colleagues who are at home on 80 per cent pay.
“The second solution can cause additional stress for a business owner who is probably already struggling in many ways in the current situation. And not doing the work at all will prevent businesses from recovering from this situation when the crisis is over.
“I think there is time to address these concerns before they become divisive but urgent action is needed.
“What we need is an additional ‘short time working scheme’ and for non-working days to pay not the guarantee statutory pay of £30 per day (currently at a maximum of five days) but increase this to 80 per cent of daily pay capped at circa £115 per day.
“This would be a pragmatic, fair, equitable and much needed solution, that would be welcomed by SMEs and keep the wheels of commerce and industry going, subject to complying at all times with guidance from Public Health.”