Uncertainty is yet again in the air!
Many businesses are likely to face different challenges over the coming months.
This could be due to the rising costs of energy, difficulty in supply chains, rising inflation and wages and of course the end of the furlough scheme next week.
We have known about the end of the furlough scheme for a while and since July the amount you could claim has been reduced first to 70% in July and now to 60% in August and September.
The UK economic performance has been better than expected and so there is no need to continue the furlough scheme. The scheme comes to an end on 30th September, and you will have until 14th October to make your final claim.
So, what are you plans for the staff that were still on furlough this month?
Eighteen months may not be a long time in a life span of a business but given what we have all gone through, it is a long time! There have been a lot of changes since March 2020.
Is your business still even the same?
Did you need to make operational changes not because you wanted to, but you needed to. If so, will the staff returning to work from furlough still have the same skills?
A restaurant may have decided to have more deliveries and take-aways due to the latest trend in their market. So, the restaurant will need less waiters and more people minding the on-line ordering systems, telephones and making the deliveries?
There will be no choice but to either retrain the retuning staff or make redundancies and employ new workers. The former is likely to be a better option than the later and a cheaper option in the long run.
As a business you may also find that any employees returning to work after such long period of absence are likely to be exhibiting levels of anxiety.
Be prepared to have open conversations and don’t expect everything to fall into place straight away.
5 top tips when dealing with returning workforce
- Have an individual assessment with each team member returning and see how they feel about the change in role, and or just in coming back.
- Make sure a new contract is drawn up for any changes in terms of employment
- See if there are any skills gap and set out a retraining programme
- Have a regular check-in like you would with a new joiner to monitor progress and make sure they are settling in well.
- Incorporate some simple team building activities to bring your people together
Continue to review your workforce needs – do you need to make redundancies?
If your business has seen an overall downfall then there will be need to make redundancies. This being the case you will need to carry out a consultancy process.
This should ideally be carried out face to face, but it can work over the telephone and virtual meetings.
Remember normal redundancy rules apply to furloughed employees.
You could of course consider other options ahead of redundancies such as reduced hours or temporary lay-offs.
Again, any temporary change to terms and conditions of employment must be in writing and it is best policy to obtain consent.
Whatever you decide to do it is important that the wellbeing of your workforce is key. Any action you take must be in an empathetic way.
For employees it would not have been their first choice to have been furloughed. Most people want to work and feel like they have contributed in a positive way for their employer.
Returning to work will be difficult for them and you need to avoid “us” and “them” situation developing. “Us” meaning those who were either not furloughed or came back a long time ago and “them” meaning those that are coming back now.
The impact on your finances after furlough
Whether you have brought all your team back from furlough, are going to next month or have some redundancies in plan, you are going to need to keep a watchful eye on your finances over the next few months.
- Cash flow
You must monitor your income and outgoings regularly. Any less than monthly is not enough. Ideally it should be weekly if not daily.
Take active steps to make cash-flow forecasting easier by connecting your cloud accounting software to an App like fluidly or delegate the function to your bookkeeper or accountant.
- Cost savings
In times of rising costs, review all your expenditure and see if there is anything you can reduce.
Inflation is expected to increase and therefore all operating costs are going to rise.
Will you be able to pass these increases on to your customers?
Only cut back on the costs you can, and make sure it is not short sightedness. Talk to your accountant and discuss the options.
- Supply chains
When was the last time you spoke to your suppliers?
Actually, had a proper conversation and asked how they are doing? You need to know if they will be able to meet the commitments to your customers.
So why not ask them now? If there are holdups on the horizon you will find out sooner rather than later.
There may be time when you just need a little extra help. You may need some cash for short term to finish a project or just to meet your liabilities.
There are various options available to you and you do not need to restrict the search to your banks. We can help source funding for you if that is what is needed.
There is talk in the media comparing 2021 to the 1970’s.
We don’t think that is a fair comparison, things are not that bad. We are not at 20% inflation neither is anyone expecting this. The Bank of England predicts inflation to rise to 4%.
But business may not be so straight forward for the next few months. A little planning and adjusting will go a long way.
You may want to discuss one or two of the above areas in depth or have a general chat about your business and your plans. Use us as a sounding board. Contact your normal director here at Myers Clark or if you are not yet a client, please contact Priya at firstname.lastname@example.org