Furloughed employees have experienced significant reduction in wellbeing, personal confidence, job satisfaction and commitment to organisation.

The UK Government’s Coronavirus Job Retention Scheme has had a divisive effect on the workforce, according to new research by business psychology firm Pearn Kandola. This has raised concerns about a hidden workplace divide as furloughed employees return to work.

The study, which surveyed over 500 employees across the UK, 253 of whom had been furloughed, shows that overall wellbeing, job satisfaction and personal confidence among UK workers had significantly decreased since the scheme was introduced. Those who had been furloughed were found to be the most impacted despite the scheme providing financial compensation.

Furloughed employees experienced a significant decrease in personal commitment towards their organisation.

Loyalty and motivation

Furloughed employees were more inclined to agree that they felt very little loyalty to their organisation and less inclined to agree that they were willing to put in a great deal of effort than their non-furloughed colleagues.

Furloughed employees also showed significantly lower job satisfaction compared to the working group. The research examined various aspects relating to overall job satisfaction including relationships with direct colleagues and supervisors, and scope for making decisions such as personal authority.

“It will take many years to fully understand the impact of the pandemic on organisations and employees, but this research highlights a compelling and immediate leadership challenge: to address the significant decline in employee job satisfaction and mental health,” Stuart Duff, Partner and Head of Development at Pearn Kandola, said.

While the furlough scheme has undoubtedly saved many jobs, Duff warns that we must not ignore the significant decline in employee job satisfaction and motivation during the furlough period.

”Employers need to be aware of a potential workplace divide within the workforce when furloughed employees return to work, and how this could impact productivity and wellbeing.”

”For example, there is now a new, distinctive in-group and out-group. Those who were furloughed have experienced frustration and uncertainty, while those who continued to work have felt pressure to ensure their colleagues can return.”

Wellbeing takes a hit

The research also looked how employee wellbeing has been affected by furlough. It found that furloughed employees have been disproportionately impacted, with levels of wellbeing significantly lower for the furloughed group compared to the working group.

Furloughed employees’ personal confidence was also significantly impacted, with them far less likely to believe that their employer and colleagues had faith in them and that they were able to make a difference. They were also less likely to feel like they were a part of their organisation’s future than their non-furloughed colleagues.

“Job dissatisfaction and a diminished sense of belonging is a common precursor to poor performance, so it is likely to have an adverse impact on productivity and workplace culture,” Duff added.

Leaders and HR teams need to talk to employees directly to understand what they can do to support job performance and take the appropriate steps to resolve any lingering concerns.

Separate research from Durham University Business School surveyed people living and working across the UK, France, Germany, Canada and the US, to understand the impact of ongoing Covid-19 restrictions on mental health and wellbeing.

The study, conducted by Professor Roger Gill surveyed participants throughout June 2020 to explore how various demographic factors, individual differences and leadership experiences had influenced people’s perceptions of the Covid-19 pandemic on their lives and its actual impact.

While demographic factors such as being an essential worker or being responsible for children certainly influenced how lockdown restrictions impacted the respondents’ lives, there was no evidence to suggest that these had any negative impact on health or wellbeing.

In fact, all three factors led to better wellbeing outcomes.

“It’s true that many workers encountered new demands on their time, such as needing to learn new tech like Zoom or navigating makeshift work procedures, and new financial demands as well as facing the loss of essential financial resources. However, the shift created a series of trade-offs for most people,” Professor Gill said. “There were different constraints on the way people allocated their time, energy and money that did not necessarily lead to negative consequences.”

For example, those who previously faced lengthy commutes benefitted from a better work-life balance and reduced expenses, and those with insecure work hours or placed on furlough were able to qualify for financial support to ease the burden.

Instead, the key difference in participants’ lockdown experience was found in their individual levels of resilience. Those better prepared for remote living and working via flexible work arrangements prior to lockdown fared better than others, regardless of personal circumstances.

Lessons for business owners

The researchers say the study provides vital lessons for individuals, employers and governments in protecting people’s mental health and wellbeing, in the event of future pandemics and lockdown scenarios.

“Given the dynamic nature of lockdowns and restrictions, it is important to track how people in various parts of the world are responding to the crisis and its effects on individual health,” Professor Gill added.

Firstly, they state it’s important for individuals to recognise that increasing their personal resources (time, energy and money) may help them to mitigate the pandemic’s negative impact on their wellbeing.

Similarly, business leaders would benefit from understanding how employees’ individual differences and resources may impact their work-related well-being, particularly when new rules and procedures such as socially-distanced office set-ups, long-term remote working and extended furlough are implemented.

Leaders must also create working conditions that preserve the mental health and wellbeing of their employees. Helping employees to recognise signs of stress and their causes, maintaining an open-door policy for discussing problems, and providing training in managing workloads are all simple but vital steps.

For governments, the researchers say it’s vital that policymakers track society’s mental, physical and work-related health status when considering and implementing lockdown measures in future.