The furlough scheme will be extended until the end of September by the chancellor. 

Rishi Sunak said the scheme – which pays 80% of employees’ wages for the hours they cannot work in the pandemic – would help millions. The chancellor said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.”

But what does this mean from an employer’s perspective?

Helen Jamieson, Founder of Jaluch HR, expert in employment law, diversity & inclusion, change believes that we need to put ourselves in our employees’ shoes more than ever.

“Maslow’s pyramid of needs has been around for so long that, rather than invent the wheel, let’s look at what’s really going on here for workers facing months on furlough. Furlough monies address the very base of the pyramid, our physiological needs; putting a roof over our head and food on our table. We struggle to function if we can’t afford these very basics. Next up is safety. The government with its rules, restrictions and the vaccine roll out as well as what employers are doing with PPE, social distancing etc in the workplace, are addressing step two of the pyramid. But – and it’s a big but – we have spent most of our lives operating way above step two on the pyramid. Furlough might help us financially but it disincentivises seeking alternative work, training for something new, developing our skills, branching out and, as a result we have lost step three – love and belonging – which we get from the social environment of the workplace.

“We have effectively been sent home, away from the team that gave us, at work at least a sense of belonging. And step four of Maslow’s triangle – esteem – comes from a job well done; learning, developing, being rewarded for our efforts, gaining the next promotion, having a great customer review. That has been taken away.

“Furlough, whilst well intentioned is holding everyone down. As a Western nation we are trained to aspire to self-actualisation. We are aiming for the top and encouraged to do so. Now we are stuck at the bottom, that is devastating. Far more so than if we had always been there. In spring last year it would’ve been far better to invest government money in training, retraining, jobs creation, innovation than to put people into a holding pen that slowly eats away at their confidence. In particular, furloughing workers where their industry is changing dramatically for the long term, meaning they will not be returning to jobs they left is not helpful. It is damaging self-esteem, damaging social interactions and damaging career prospects. Put money into jobs creation and skill development, where it will truly build back better.”

Jamie Mackenzie, director at Sodexo Engage agrees, noting that return plans require preparation.

While this will be welcome news for some businesses for many furloughed employees the continued uncertainty of long-term job insecurity will be taking its toll on their mental wellbeing.

Today’s budget and the roadmap to recovery provide some glimmer of hope that an end is in sight. However, managers need to be prepared for the return of furloughed staff. A period without work, might make staff feel unsure or out the loop and perhaps feel removed from others who were not furloughed. Employers need to support their returning workforce and ensure they feel welcomed back and supported. Many won’t just be able to ‘bounce back’ and proceed as normal and it’s important to have compassion for the impact the past year has had.”

At the same time, Danni Rush, Chief Customer Officer at Virgin Incentives believes that business need to work hard to  keep furloughed and existing staff engaged and may look at tangible methos of doing so.

“Furlough has been a crucial support for many employers and employees, and will continue to offer an important economic lifeline as we hopefully emerge from the grips of the worst of the pandemic soon. However, it may have also unfortunately led to a stagnant labour market – with furloughed workers left in limbo, unsure whether to stick with their current employer or twist.


“With unemployment reaching 5% at the end of 2020 – a four-year high – employees still in full time work may be more hesitant to seek new job opportunities elsewhere, preferring the job security at their current employer even if they’re unhappy in their role rather than facing a competitive jobs market.


“This is a new conundrum almost unique to the pandemic economy, which employers must tackle – and HR departments offer the best possible way to overcome the challenge. For furloughed staff, employers must continue to maintain open and regular lines of communication to ensure they feel engaged with the business and aren’t tempted to look elsewhere. This may be as simple as an email or a call to check in on them and their wellbeing, or a regular company newsletter to keep them up to date with the latest company developments. Alternatively, some businesses may wish to offer furloughed employees bespoke financial support or gifts to show their support – for example, a hamper of treats. Doing so can also help to ensure furlough staff look forward to eventually returning to work and are motivated to contribute when they are finally reintegrated to the workforce.


“For retaining those staff members who are still working, employers could consider part time furlough as a compromise to help keep people working if financially viable. Additionally, employers should explore wellbeing support for mental health which has understandably suffered as a result of the ongoing social restrictions. This could start with creating an ‘open door’ policy both in the workplace and virtually, and could include access to an independent, free 24/7 Employee Assistance Programme (EAP). Businesses may also consider enhancing their employee offering by bolstering their suite of staff rewards and incentives. For example, by offering team treats or recognising achievements with financial or non-financial bonuses, including an experience to look forward to or a gift card for the employee to choose from a range of flexible options.”