Zoe Woolacott | 03 Jun 2020

How is the pandemic affecting pay and employment?

In the 10 weeks following the Prime Minister’s announcement of the UK’s lockdown in response to the coronavirus pandemic, employers have faced contrasting challenges.

As restaurants, offices, and many factories closed their doors others, such as food retailers and medical suppliers, faced a surge in demand for their products and services. IDR’s monitoring of employers’ responses to the pandemic in March highlighted the varied picture across the economy, with half of employers continuing to award pay rises, while the other half decided to defer or even freeze pay. The latest phase of our research reflects how the picture has changed since the introduction of the Coronavirus Job Retention Scheme (CJRS) and the easing of the lockdown rules as organisations make arrangements for re-opening, while others extend plans for home working or continue to furlough workers.

Furloughed workers

Nearly three-fifths (58%) of employers have made use of the CJRS since it was established. This number is higher than the proportion of participants in our first study (37%) that indicated they were intending to utilise the scheme once it was available. Those not using the scheme are mostly in the private sector, in areas such as energy and water and financial services which have been less affected than other sectors.

When it comes to deciding which staff should be furloughed, the most common factors influencing the decision are reductions in workload (67%) and site closures (47%). Around a third (31%) of employers are using the scheme to avoid redundancies (see below) while a quarter feel that the importance of the work done by the employee is a factor in the decision. Employers are also influenced by the need for ‘shielding’ in line with the guidance from Public Health England on protecting vulnerable staff. Over two-fifths (44%) of employers using the CJRS scheme are topping up pay for furloughed workers to 100%, while the same proportion are paying 80% of salaries, the proportion that is being underwritten by the Government. The remainder of employers are topping up between 80% and 100% of salaries. When asked about intentions for staffing beyond 31 July – the date on which current requirements under the CJRS will end – around a tenth of employers (14%) are planning to resume normal working hours for all of their staff. The same proportion of firms believe that while some workers will return on their usual work pattern, they will need to reduce hours for some employees. Nearly one-in-five organisations will continue with furlough arrangements in some form.

Future research

If you would like to help with our research then please tell us about any pay increase or pay freeze by emailing us at IDRteam@incomesdataresearch.co.uk or by using our online survey below.

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