It doesn’t take a genius to work out that, due to the devastating impact of the coronavirus crisis on the economy, many employees are going to find themselves being made redundant during the coming months.
Indeed, the Bank of England has warned that unemployment could more than double by the end of the year, and some experts are predicting a 1980s-style scenario.¹
Current job losses would certainly be much worse had it not been for the Government’s Coronavirus Job Retention Scheme, which enables employers to claim 80% of furloughed employees’ usual monthly wage costs – up to a cap of £2,500 a month – plus associated employer NI contributions and minimum auto-enrolment employer pension contributions.
Nevertheless, although the decision to extend this scheme until October is clearly welcome, the fact that it will soon need to be supplemented by contributions from employers could prove bad news for the unemployment statistics.
In August employers are due to lose the ability to reclaim NI and pension contributions from it, and in September they are due to have to start paying for 10% of furloughed wages. The requirement is then scheduled to rise to 20% in October.
There are widespread fears that many firms will start laying employees off once they have to stump up for these costs, even though this involves questionable ethics – as the whole aim of the scheme they have been benefiting from is to prevent redundancies and help the economy bounce back from the crisis.
Losing a job can have horrendous financial consequences for an individual and their dependants at the best of times, especially if they are the only bread winner in a household. But for it to happen in the current environment can be particularly cruel.
Savings levels may have already become severely depleted, and new employment is much harder to find with so many businesses having been closed for months. Indeed, in some industries it may be well-nigh impossible for the foreseeable future.
Furthermore, redundancy can involve a great deal more than financial hardship. There is also the mental health aspect to consider.
Loss of status and self-esteem can have a severe psychological impact, as a person’s employment often defines them and their sense of purpose, and the disruption of a daily routine can prove disorientating.
Suddenly finding oneself without the companionship of work colleagues and feeling anxious about what the future may be holding in store can also be devastating. Dealing with a job loss can in fact have many similarities to dealing with bereavement, in terms of having to grapple with denial, anger and depression.
Employers therefore need to ensure that their workforces have the best possible chance of coping should the unthinkable occur, and Chase de Vere is well placed to help.
Our financial education services include a module on guiding employees through the financial implications of organisational change, and we can provide targeted sessions to suit specific needs on either a group or individual basis – or both. Specific redundancy counselling can be included, if required.
Some employees may primarily require practical redundancy counselling advice. This could, for example, include guidance on everything from coping with the financial implications of unemployment to composing a CV, interview techniques and networking.
Reading relevant trade publications may also be highlighted as a good way of keeping up to date with the industry sectors in which individuals are aiming to secure employment.
Others may require confidential counselling dealing with psychological effects of redundancy like low-self-esteem and anxiety.
Even those who don’t regard themselves as having psychological problems as such may still benefit from tips on how to remain positive during their job search and on how to retain the office mentality.
For example, being regimented about being at one’s desk at 9am every morning looking for work may prove helpful. So may allocating oneself tasks and challenges for later in the day and keeping in touch with former colleagues.
Sources: ¹ The Guardian
Content correct at the time of writing and is intended for general information only and should not be construed as advice.