If it is true that it is darkest before the dawn, then a number of countries worldwide are rightly turning their minds to the possibility of easing the current lockdown arrangements. This Article looks at what steps employers should be starting to take now to prepare for a partial or full return to work. Clearly, aspects of life will take longer to return to normality than others. However, employers who are not addressing these issues now are likely to be left behind when current restrictions are eased.

We consider the likely short and long term business issues which employers should be considering now as well as some of the likely employment challenges that employers are going to face. However, the one certainty in all of this is that some of the challenges will be unexpected. Preparing for the known and the unknown will also help create space for the unknown unknowns when they move into the known category.

01. START YOUR PLANNING NOW

Many employers are making use of the UK Government's Furlough Scheme. It is unclear how much warning employers will get of the imminent end of the Furlough Scheme. Employers could therefore be faced with a situation where they have to take decisions in a hurry as to how to cope with the end of that Scheme and what it means for their businesses. The process of communicating with a furloughed workforce, where often individual employees will have differing challenges in a return to work, is potentially time consuming and will require careful thought. This is the case even if an employer is clear about what it wishes to do with each individual employee on furlough. Similarly the process of getting employees back to work is not as straight forward as simply instructing them to return to work the following day. Business life is clearly going to be disrupted for many operations. Employers that are able to organise an efficient return to work may be in a far better place to compete for supplies of necessary equipment which they need to operate, e.g. in the manufacturing sector. The first mover advantage can be critical in enabling businesses to survive or indeed potentially thrive at the expense of competitors. None of this can be done properly on the hoof.

02. LONG TERM DECISIONS AFFECTING STAFF

It is clear that employers will need to be realistic about their future long term staffing needs. The world economy is set to contract. It is a certainty that many businesses, once the Furlough Scheme and similar support have ended, will look to make redundancies.

POTENTIAL HEADCOUNT REDUCTIONS

Any headcount reduction needs to follow a dispassionate analysis of the employer's business, which will, inevitably, take time. Key questions for employers include:

  • What is the likely position post lockdown in the foresee¬able future in relation to key customers and key markets?
  • Will key customers and key markets be generating anything like the same levels of demand for services or products?
  • Is the business likely to be constrained by a lack of supplies into the business?

Employers should be looking at headcount issues now. In the UK, collective redundancies with more than 20 staff at a location can easily take two months or more to conduct in accordance with the necessary legal requirements. If the employer leaves such planning until after the end of the Furlough Scheme is announced or when a partial return to work is ordered, it is simply adding costs onto its business which it may be ill equipped to afford. There is nothing inconsistent in the UK's Furlough Scheme with an employer planning for redundancies now. Even if many employers are currently starting collective redundancy consultation, there is nothing in the Furlough Scheme by itself which would preclude an employer from commencing collective redundancy consultation during a furlough period. Naturally, few employers would want to be giving notice of termination to staff by reason of redundancy whilst they could still be furloughed (although there will be some necessary exceptions). However, employers could significantly reduce the period after the furlough period ends, when they are back to paying for all of the employees' costs, if

Employers will need to be mindful that employees made redundant, whether before or shortly after the end of the lockdown period, will need all the support that the employer is able to offer. The prospects of finding alternative employment, for many, may be bleak. Equally, employers will be mindful that staff who are being retained may feel disengaged or demotivated if they see their employer shedding colleagues in a mechanistic or unthinking fashion. It will be more important than ever that employers have given full consideration as to how these arrangements can be handled most appropriately, and at the appropriate time. Time spent thinking about what support (outplacement, counselling etc.) could be given would be time well spent.

Other employers may wish to scale back hours so that an individual will move onto shorter working weeks permanently with a consequent reduction in salary. This may be seen by some as a better alternative to redundancies. However, in practice, in the absence of express terms in the contract permitting this, it would need to be treated as a potential collective redundancy. An employer is unlikely to have the power in most cases to force through a cut in hours without the employee's consent.

EXPLORING WIDER OPPORTUNITIES

Conversely, and counter intuitively, it is also necessary for employers to look for opportunities in the current environment gained by being the first movers. For example, an employer who wishes to strengthen an area of its operations should be considering whether there is strategic hiring to be done now or immediately after the end of the lockdown when businesses are starting to open up. In the recession in 2008/09, we saw employers who might previously have looked to buy businesses look instead at hiring key staff and their team's outer competitors as a cheaper way of increasing turnover and strengthening their operations. Our Hong Kong colleagues saw the same thing after the lockdowns implemented to address SARS in 2003 and Swine Flu in 2009.

Employers should be looking, realistically, at their operations, to see what could be strengthened and what could be expanded, and then where that recruitment could come from. Is it internal promotion? Is it by retraining employees? Both of those can be done now, during lockdown especially since training of furloughed staff is actively encouraged by the UK Government and can be done remotely. It may be trickier for staff who are currently working, but if they are being promoted within their current group or department, then it will normally be possible to get that process underway unless resources are very stretched.

If employers conclude that there needs to be external recruitment, then that too can be overhauled so that it works as fast as possible, and as efficiently as possible. For example, if employers believe that they need to recruit key staff, then review now the whole standard recruitment process, contractual documentation, condition of offers, and authorisation limits for hiring. It is going to be key for such employers that the whole process can work remotely, and both efficiently and speedily.

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Originally published 23 April, 2020

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