We’re hoping that we’re not going to have to furlough. We’re very fortunate in that we are still doing a lot of orders. However, the current uncertainty means that could all change overnight. To that end we’ve got a plan in place. We hope we don’t have to use it but if we do it’s because we want to ensure staff have jobs to come back to.
In terms of accessing the funds, the process looks very simple. It’s based on the PAYE system and will be administered online via a dedicated portal, soon to be launched. For anyone who’d like extra guidance, I’d recommend signing up to a HR subscription service where you can access advice at a fixed rate.
The complication with furloughing though is ensuring a strategic and empathetic approach, in order to protect the business in both the long and short term.
A strategic approach
My recommendation is to base your plan on forecasted cash flow. For us, by forecasting the number of orders, we can work out the resources needed in each department. Things are so fast moving that we need to forecast on a weekly basis, but by forecasting labour and the need for resources you can make a logical decision.
Be prepared to implement furlough in waves, reducing resources in line with the needs of the business.
When it comes to who, I’d recommend a two-tier approach. Firstly ask for volunteers, as finding willing people will help manage the process positively. Some employees will welcome the opportunity for health or childcare issues. Secondly, if you do not have enough volunteers, it’s time to look at the people whose work has disappeared or who can’t work from home.
In most businesses your ultimate decision will be based on the skills needed, and ensuring you have the right mix to service demand.
Furloughing is a brand new concept and there are no precedents to guide best practice. As a result, businesses should deal with furloughing in a similar way to redundancy to avoid the potential for any claims in the future. Be very careful to document your decision making process, as it’s essential to keep a record showing why you’re doing it and how you’re communicating the decision. Additionally, seek advice from a solicitor with HR expertise - the Law Society has a useful database. Investing now will help future-proof this process.
Treating staff with respect
When you make the decision to furlough staff, you must communicate with empathy. Clearly explain to everyone why you’re taking this decision and get them to look at the bigger picture with you. You’re making this decision to protect their jobs for the future. It’s likely that managers will understand but less senior employees may not have the insight needed to see the wider context. For this reason, make yourself available to all staff members, whether they’ve been furloughed or not.
To make sure we treat all staff with empathy, manage communication through your heads of departments, who have close, personal relationships with their team. Get them to deliver the news on a one-to-one basis, telling furloughed staff ahead of their colleagues, and ringfence time to make them available for follow up questions, either by email or on their phones. It is important that these heads let furloughed staff know that they can speak to your HR team at any point, and that they share a clear timeline on when the situation will be reviewed.
Keeping furloughed staff engaged will be very hard. Just do all you can to keep lines of communication open.
Managing the remaining workforce will also require skill. Some will be very worried that they will be furloughed in a further wave, while others may feel they’ve now got too much work to do. That’s why we will only furlough if we really have to, and we will use a cashflow forecast to make the decision for us.
Managing as a leader
The issue of whether to furlough is very stressful. I’m struggling to come up with answers because the situation is unprecedented. Usually I find business decisions very black and white but this is a real grey area. I talk to other CEOs in my network to canvas their opinion and use LinkedIn to follow the news from big brands and see what larger companies are doing. My ultimate view though is that furloughing is there to help the whole business community, and provides a way of cutting costs to give you the best opportunity to survive. It’s a positive step, it just needs to be positively implemented.