HR practitioners always add value to businesses, but they need to be even sharper around this than usual, for example, looking at the wider business to see if non-HR systems and processes could be improved or enhanced, or looking at new ways the business could expand; no business can afford to have different parts of it operating in silos.
Redundancy
Recent data from the CIPD and Personnel Today has shown that around 25% of businesses have or expect to make staff redundant as a consequence of Covid-19. This could expose them to significant risks if redundancies are not handled appropriately and in line with employment legislation.
When the banking crisis hit in 2008, many businesses were exposed to unfair dismissal claims for issues such as unfair selection and discrimination; some businesses thought they could use redundancy to get rid of “deadwood”, but this laid them open to claims because they had not taken prior steps to address performance issues.
Discrimination cases involved businesses that did not properly take account of staff on maternity leave or gave too much weight to staff on maternity leave over people who were not.
Businesses looking to make staff redundant should ensure they follow the ACAS guidelines, employment legislation, and seek employment advice from legal advisors where appropriate; it takes less time to do things right than to explain why you did it wrong.
Furloughing
Prior to the Covid-19 crisis, furloughing staff had never been used in the UK, and most people would probably have only heard the term “furlough” used in American films, but with around 50% of businesses taking advantage of the government’s scheme it is likely to be something that will remain in memories long into the future.
The aim of the furlough scheme is to enable businesses to retain and pay staff (80% of salary up to £2,500 per month) but not require them to work during the operation of the scheme; one of the issues that has come to the fore is businesses taking advantage of the furlough scheme but then putting pressure on staff to work whilst receiving government funds via their employer, which is in clear breach of the furlough rules. HMRC has made it clear that it expects full compliance with the furlough rules, and that any business found committing fraud will be subject to tough enforcement action.
One of the unintended consequences of the government’s job retention (furlough) scheme has been the impact on businesses who operate salary sacrifice pension schemes, so HR teams and their pension advisers need to look at how they can mitigate the additional liabilities.
Remote working
Part of the government’s lockdown requirements has been for businesses to operate remotely where possible, and although this has allowed operations to continue to a certain level it has created a number of issues that businesses need to address, including staff isolation, use of personal IT equipment that may not be secure, and maintaining confidentiality of customer/business information in staff homes.
Data from a Personnel Today survey recently found that over half of employees that have been able to work remotely expect to return to limited flexible working policies once the lockdown ends. If this finding turns into reality, the businesses that don’t take advantage of the benefits remote working clearly offers are likely to suffer commercially and be unable to compete in their chosen markets, for example, the businesses that do offer remote working are likely to be able to reduce their office overhead costs and these savings can then be passed on to customers. Forward-thinking businesses are also likely to see an improvement in staff retention where the new-found freedoms and flexibility of remote working are not available with competitors.
Closure
A recent survey by the Office for National Statistics found that around a quarter of companies in the UK have temporarily closed due to the Covid-19 crisis, and subject to how long the crisis continues these temporary closures may become permanent with all the negative consequences that this would bring.
It is estimated that more than 500,000 companies are currently in significant distress; this is defined as a business with court judgements of less than £5,000 files against them or with other issues in key financial ratios and indicators.
No business wants to shut its doors, but if there is no viable option the closure should be done in as orderly a manner as possible; those that have run businesses that have been forced to close due to Covid-19 are likely to want to start again at some point or join another business, so maintaining a professional approach and reputation is key.
Returning to work
Although most firms will have regard to the health and safety of their employees it has become clear that there could be some conflict between employers wanting to get back to normal and employees wanting to protect themselves from being infected by Covid-19, it is therefore important to remember Section 44 of the Employment Rights Act when discussing any concerns employees may have about returning to work while Covid-19 is still a threat:
An employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer in circumstances of danger which the employee reasonably believed to be serious and imminent and which he could not reasonably have been expected to avert, he left (or proposed to leave) or (while the danger persisted) refused to return to his place of work or any dangerous part of his place of work, or in circumstances of danger which the employee reasonably believed to be serious and imminent, he took (or proposed to take) appropriate steps to protect himself or other persons from the danger.
Failure to take account of the above could expose businesses to claims for constructive/unfair dismissal, which is the last thing any business needs at this time.
The future
Although times are hard now most businesses will get through them just as they did after the 2008 banking crisis, but what they need to do is make sure that the way they operate going forward is as efficient as possible and that they can compete in what will be a very competitive market.
Where possible, businesses should consider how they can reduce their costs by moving to remote working, however, such a move would need to have a strong focus on the impact this could have on employees and their mental health and welfare.
People will make the difference between the future success or failure of businesses, so make sure they are fully engaged and are ready for the new post-lockdown world.
We are committed to helping our customers in these difficult times and can provide various resources and solutions - including our intuitive HR software and Learning Management System - that can help you protect your firm and can be easily accessed remotely.
Also, to discover how you can evolve and revive key areas of your organisation following the coronavirus crisis, visit our new HR Transformation Hub or download your free HR Playbook.