PIXIE PAYROLL Blog

The end of furlough

There are now only a few more days until the Coronavirus Job Retention Scheme (CJRS) – known better to us all as furlough – comes to an end. The scheme has been supporting employers and employees for 18 months now throughout the pandemic, so we thought we’d look back over that time and at this groundbreaking government intervention.

Start at the beginning

It was back in March 2020 that the government announced the first Covid-19 lockdown and the immediate closure of many businesses. At the same time, the CJRS was announced and the first employees placed on furlough in April. At this point, employees who couldn’t work would have 80% of their salary paid by the scheme, leaving the employers with the option to top up the remaining 20%.

The plan at this stage was for the scheme to run until October 2020 because, of course, at this point no one knew what would happen with the spread of the virus. Employers embraced the scheme with over 8 million employees paid via the scheme by May 2020.

Cautious reopening and flexible furlough

At the beginning of summer 2020, some of the restrictions started to ease and businesses were allowed to reopen. This led to the introduction of flexible furlough, where employees could be bought back to work part time for which they would be paid in the normal way, but then be paid via the scheme for the time they didn’t work.

The plan at this stage was for the scheme to close in October and for the amount of salary the government paid to reduce from the original 80%.

An autumn of change

It soon became clear that it would not be possible to close the scheme entirely in October 2020 as originally planned, so the Chancellor announced a number of different plans that varied the amount of salary covered.

In the end, in early November as the second significant lockdown was announced, he swept all that away and the 80% CJRS was extended for 6 months until March 2021. By this point, approximately 2.4million people were included in the scheme but by early December 2020, the numbers had increased again to over 4 million.

Furlough in 2021

The events of this year are fresher in our memory and the first half of the year was mostly all of us counting down the days to the various dates when lockdown restrictions were due to end. The furlough scheme was extended to April 2021 at one point but then finally in the Budget in March, it was extended once and for all until 30th September 2021.

As we will all remember well, our original ‘Freedom Day’ was due to be on 21st June but we had to wait a further four weeks in the end. Since then, we’ve had a summer of relative respite from restrictions and guidelines and a time that felt a bit more like normal.

What about the future?

As I write this, Coronavirus numbers are still worryingly high and there is a lot of talk about a further lockdown at some point next month. But there is no sign that the furlough scheme will be extended again so employees will either be returning to work or face the risk of being made redundant.

The job market has a high number of vacancies so unemployment numbers may end up being lower than feared although of course people may not always find new jobs in the right sector or paying the equivalent salary that they earned before.

Overall, the Coronavirus Job Retention Scheme is expected to cost over £80billion. It has also generated more admin and work to administer but there is no doubt it has helped many families survive the pandemic and allowed employers to retain their talented and experienced employees ready for when they could reopen.

Apprenticeships – bringing on the next generation

The arrival of my new grandson a few weeks ago was a really exciting time for our family and although I jokingly called him the new Pixie Payroll apprentice, it got me thinking about the next generation and apprenticeships in particular.

The good news is that there’s never been as much help and support for employers who take on an apprentice as there is now so it’s a great time to think about it.

Recruiting an apprentice

You can take on an apprentice for many areas of your business; it doesn’t just have to be a trade role like in history – apprenticeships have evolved with the needs of modern businesses so they now cover areas such as marketing or technology.

The definition of an apprentice is someone who spends 80% of their time in the business and 20% of their time at off-the-job training. Apprentices are typically young but they don’t have to be – there is no maximum age for an apprentice so they’re also ideal for those looking for a mid-life career change. The apprentice will develop skills, knowledge and experience in their chosen field whilst earning a wage and contributing to your business.

The first step on an employers’ apprenticeship journey is to identify where you have skills gaps in your business or where you anticipate you might have skills shortages in the near future. Write a job description for that role and then you can start to look for suitable training providers. Once that’s in place, you can advertise your vacancy.

Then it’s also a good idea to appoint a mentor from within the business who can pass on skills to the apprentice outside of the classroom. You’ll need a contract of employment ready for their first day as well as a plan of on-the-job learning with milestones.

Funding for apprenticeships

The good news is that there is funding available to support your apprentice recruitment and training.

If your total wage bill is less that £3m, you will only pay 5% of the training costs with the government paying 95%. You can apply to Cornwall Council for that to be increased to 100% of the training costs being covered. Small employers – those with less than 50 employees – won’t pay anything if they take on young apprentices or care leavers up to 25 years.

If the apprentice is under 25, there will be no employers’ National Insurance liability on their wages. There is also a special apprentice rate in the National Minimum Wage of £4.30ph which is managed through your payroll in the normal way.

There is also currently a scheme in place where employers receive a £3,000 bonus for taking on an apprentice but this ends on 30th September 2021 so there is little time now to take advantage of that.

More help and support If you think an apprentice is the right thing for you, get in touch with Cornwall Apprenticeships here – they’ll be able to help with funding queries, finding training providers and advertising your vacancy. 

Recruitment – how to find and secure new team members

Now that we’ve had confirmation that the final coronavirus restrictions are to be lifted on 19th July, many businesses will be putting in place their final plans for fully reopening. For many, that will include ramping up their recruitment to fill gaps in their teams. Unfortunately, that comes at a time when employers are finding it really hard to tempt employees to work for them, so we thought a few handy tips to improve your recruitment process might be handy for this month’s blog.

Spread the word

First things first, if you have a vacancy to advertise, make sure you spread the word as far and wide as possible. Use your own social media channels and then get your network to share, share, share! If you’re on LinkedIn, make sure you post there too. Then it might be worth investigating whether some of the job hunting platforms such as Indeed would be worthwhile to reach as wide an audience as possible.

And if you have a shop, sometimes you just can’t beat the good old-fashioned notice in the window.

Be clear

When writing your job advert, make sure to be as clear as possible about what the job entails and what you are expecting of your employees. This should include information such as a brief job description, the hours and who they’ll be working with. In the current market, if someone has any doubt about the job, they’ll just pass by.

Perks of the job

It’s really vital that you include all the benefits of the job, including being clear about the salary on offer. If the job is part time but you include the full-time equivalent salary amount without saying it’s pro rata then people are going to be disappointed. Alternatively, be really clear about the hourly rate, especially if it is graded by age like the National Minimum Wage.

If there are extra benefits like free parking, free meals when on duty or bonus holiday days, don’t be afraid to shout about that. Also, let applicants know if you have put in place any welfare initiatives such as having a trained Mental Health First Aider on site; it will reassure them that you take steps to look after the team.

Be quick

Once your job advert is live, be prepared to be really quick to respond to applications or another employer will get in there first. If you are interested in someone’s CV, arrange immediate interviews and even talk to them over Zoom or over the phone if it makes it quicker. Once you’ve found someone who’s right for you, never be afraid to offer them the job there and then!

Make them welcome

Once you’ve offered them the job and they’re ready to start, make sure their first few days go smoothly. If they need IT, a computer and an email address, make sure that everything’s ready in advance so they feel welcome on their first day. Prepare a training or induction programme even if only for the first couple of days so they can feel confident and settled in their new job quickly. And of course, don’t forget that it is now your legal obligation to give all new employees a contract of employment on their first day as well as enrol them in the pension scheme.

We can help with your recruitment, adding new employees to the payroll and preparing contracts; just get in touch if you’re adding to your team this summer.

Extending lockdown for four more weeks

Well, at least we know and in the end, it didn’t come as too much of a surprise but we had confirmation on Monday night that lockdown restrictions will be in place for four more weeks than expected until 19th July.

That’s terrible news for hospitality businesses who were expecting restrictions on numbers to be lifted and had been preparing by recruiting and training staff, bringing existing team members back from furlough and buying in stock.

Many arts and entertainment venues will be feeling disappointed too as they won’t be able to open as expected. Perhaps the only local venue not affected is the lovely Minack Theatre, which was showcased so spectacularly over the weekend when the G7 spouses were treated to a musical performance in bright sunshine.

Weddings given green light

Those planning a summer wedding did get some good news however – the 30 people limit has been dropped as originally planned. There are still some limitations in terms of the number of people who can sit down for dinner and there’s no indoor dancing (apart from the couple’s first dance) but at least those who have been planning their ceremony can now go ahead.

It’s good news too for all the local wedding industry suppliers who were desperate for weddings to be given special treatment – some of them even left a message for the government in the sand over the weekend.

Financial support

So far, there is no indication that any more financial support will be forthcoming now lockdown is 4 weeks longer. The furlough scheme is still in operation and will continue until September as we detailed in our blog about this year’s Budget which you can read again here.

There is also still another grant to come in the Self-Employed Income Support Scheme although there is a slight difference in the rules this time in that the payout alters depending on how much income has been lost.  

The reduced rate of 5% VAT for hospitality businesses remains in place but as with furlough, there doesn’t seem to be any plans to extend it beyond the current cut off date of the end of September when it is planned to increase to 12.5%.

And it doesn’t look like there will be any extension on the Business Rate holiday which is planning to finish at the end of this month before transitioning to 2/3 discount until the end of the year.

Payroll boost

The Office for National Statistics said on Tuesday that there was a record rise in May of those on payrolled employment which certainly reflects our experience locally of adding new employees to payroll schemes and preparing contracts of employment. They also reported high numbers of job vacancies and relatively low numbers of redundancies.

If you need any help with employees, dealing with furlough or simply getting through the next few weeks until 19th July, just get in touch and we’ll be happy to help.

About Me

My name is Kellie Burslem T/A Pixie Payroll Services, I am a local Payroll Bureau based near Helston, Cornwall. I provide a reliable, professional service at a competitive price.

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