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7 in 10 employers expect redundancies as furlough scheme ends

New research reveals that nearly 7 in 10 employers (69%) expect to make redundancies within the next year, the majority of which will take place within the coming months.

According to the study from Renovo, 46% of organisations expect to make redundancies within 6 months, while 23% anticipate redundancies within 6-12 months.

The news comes as the Coronavirus Job Retention Scheme ends, forcing organisations to make decisions regarding the future of furloughed employees. For employers expecting redundancies, 84% have employees on furlough.

However, for employees, concerns over redundancy are not explicitly linked to the end of the furlough scheme. Fifty-six percent of employees surveyed, who are worried about being made redundant within the next year, are not on furlough. The study Life after furlough: Employer and Employee perspectives on the threat of redundancy’, available to download on October 4th, was completed by 253 employers and 200 employees.

Chris Parker, Managing Director, Renovo sid: “Despite positive signs in the UK employment market, there remains a high level of pessimism and uncertainty at both the employer and employee level – the study shows that the perceived threat of redundancy remains incredibly high.

“In particular, at the employer level, there is a high correlation between those with employees currently on furlough and high levels of expected redundancies in the next year. However, employers must be aware that due to events in the last 18 months, perceptions of job security aren’t only an issue for those on furlough right now.”

The study highlights that both employers and employees hold similar perceptions of the causes behind weakened job security. In fact, half of employers (50%) and 46% of employees state that the key cause of future redundancies within their organisation is the financial impact of the pandemic on business performance.

However, other factors have contributed to a lack of job security as well: more than a quarter of employers (28%) state that redundancies are anticipated as some jobs are no longer needed due to new technology. One in eight (12%) also feel that certain roles are no longer necessary because of the move to remote and hybrid working.

Emphasising the current anxieties within the market, the report also reveals that for employees who expect to be made redundant within the next year, 47% think it will take over 3 months to find a new role with 14% believing it will take over six months to do so.

According to Renovo, given these levels of concern, it’s unsurprising that job search and career support is the most sought after form of redundancy support, with over 4 in 10 employees (42%) stating that this would be the most valuable type of assistance from employers. However, the report suggests that employers may not be fully attuned to this demand. Just 28% of employers believe that their people would most value job search and career support post redundancy, with one in four (43%) believing their employees would most value emotional and wellbeing support.

Parker added: “As we emerge from the furlough period, it seems clear that employers will need to work hard to rebuild a sense of job security for their workforces. If redundancies do need to occur, employers must make efforts to understand the real problems their people are experiencing in order to support them to move on appropriately. Increasing communication between employers and staff and improving employee listening are the crucial steps that organisations must take to reassure workforces and properly aid those facing redundancy in the coming months.

“Many employers have made great strides in improving the provision of emotional and wellbeing support as we have all tried to weather the storm of the pandemic. This type of support will continue to be hugely important for those facing redundancy. However, the report sends a message to employers of the importance that their people place on the more practical, focussed careers and job search support that they will need post redundancy. These elements are essential to give them the confidence and tools to move on quickly and effectively.”

Top trends impacting the global workforce in 2019

Artificial intelligence, people management and hiring practices are among the top six trends impacting the global workforce in 2019, according to a leading think tank.

The Workforce Institute at Kronos Incorporated asked its board members around the world what they think will be the most important workplace trends in the coming year, with employment law, flexible working and disaster management rounding out the list.

The full list of 2019 predicted trends is as follows:

  1. AI and machine learning unmask previously-hidden workforce data to make people-centric decisions. Artificial intelligence (AI) and machine learning will finally be woven into workforce management practices, revealing a treasure trove of data organizations have been collecting – but not using – for decades. With insight into their workforce data trends – like scheduling accuracy, absenteeism, overtime usage, and burnout – managers will be able to head-off potential issues before they arise. Intelligent automation will also free them from admin-heavy tasks – like managing schedules, approving time-off requests, and shift changes – while enabling data-driven decision-making that. Our board encourages caution here, though, warning that organizations must avoid a “one-size-fits-all” model.
  2. Historically tight labor markets and emerging technologies put people managers in the spotlight. With unemployment low and the exodus of baby boomers reaching critical mass, employers globally will face a historically tight labor market. Sourcing great candidates has never been more difficult, and retention will become an all-out dogfight. While an employer’s brand, innovative hiring technologies, and proactive recruiting practices are more important than ever, it’s organizations with the best people managers that will ultimately prevail. Organizations will place an increased focus on leadership development as a retention strategy – especially as Millennials assume middle management positions – and measuring manager effectiveness will be HR’s top challenge in 2019. If we’re right about prediction 1 above, then as AI and machine learning take over mundane managerial tasks, deficits in leadership competencies will be more readily exposed if managers aren’t using that extra time to support and develop workers.
  3. The changing face of education redefines trades and challenges traditional hiring practices. As the student loan debt crisis furthers the debate about the value of a college education and credentialing programs for job-specific skills emerge, tomorrow’s best employees may take an unconventional path to employment. Competencies that once required a degree – such as coding, robotics, and data analytics – are being redefined as skilled trades with the rise of certificate and micro-credential programs. As yesterday’s jobs become augmented by automation, new skills will be required for traditionally “blue-collar” roles. Employers need to revamp their hiring profiles and recruiting practices to tap into this new pool of qualified candidates who will staff the shop floor, store floor, hospital floor, and top floor of the future. Millennial parents, may urge their school-aged children to take an alternative educational path for a brighter financial future.
  4. Further fracturing of employment laws globally, nationally, and at the local level strain organizations. From minimum wage to sick pay, to fair scheduling proposals to the right to disconnect, governments around the world will continue to evolve employment laws. Ever-changing regulations around the world will put increased strain on organizations to avoid sanctions, fines, class action lawsuits, and reputation-damaging headlines. Technology will be vital for organizations to manage scheduling-related mandates, ensure unbiased practices, monitor fatigue and overtime management, and ensure employees are paid accurately and fairly – all while providing analytical insights that surface risky managerial practices otherwise buried in a sea of employment data.
  5. Employee-agnostic flexibility, consumer-grade tech, and the rise of the occasional time worker redefine “work your way.” All employees – salaried, hourly, and gig – crave control over when, where, and how they work. While employers have put more focus on flexibility and alternative work schedules, most have been slow to reengineer processes that underpin how the organization runs. Tools must meet employees where they naturally work – such as on their mobile phone, tablet, or favorite social networking platforms. The gig economy and emergence of the “occasional-time worker” will force organizations to replace traditional hiring and scheduling processes with systems that enable workers to choose when, where, and how long they work. Mobile-friendly processes, self-service features, and immediate access to real-time data in a consumer-grade technology wrapper will help drive the next iteration of the flexibility phenomenon, as predictability of anytime work will empower employees to be more productive, make more intelligent decisions, and be more engaged.
  6. Greater emphasis on disaster preparedness as part of a holistic human capital management strategy. Disasters large and small, natural and man-made, have unfortunately become the norm. Organizations worldwide have been challenged to respond effectively to increasingly frequent crises, with HR, operations, and payroll forced to take center stage in the lives of affected employees. With more emphasis on company culture, caring, and “doing what’s right” in a world where disasters – and a company’s response to them – are frequently in the news, there is a new level of expectation for an organization’s response, responsibility, and employee benefits. Organizations of all sizes must take a hard look at disaster policies, processes, and capabilities – including both taking care of employees in the moment and rebuilding in the wake of disaster, which will be near impossible for those operating on a DIY workforce management, HR, and payroll system. Sustainability plans that today primarily account for company assets and data will need to incorporate employees and their families.