Companies that are still claiming the Coronavirus Job Retention Scheme grants, now known as the furlough scheme, will have hard choices to make come the end of September when the present scheme ends.
Unless business activity picks up between now and September a significant number of those on furlough may find themselves unemployed.
Reaching a decision on who to retain or who to let go will be a difficult process for many employers. They will face breaking up teams that have worked tirelessly for employers for many years. And yet these hard choices need to be made.
Time to consider your options is now.
Affected business owners should sharpen their pencils, open Excel and start planning. They need to produce a forecast until, at minimum, the end of 2022, that sets out:
- Direct costs
- Other overheads including owners drawings
- Repayments of loans
- Any capital acquisitions that cannot be deferred, new plant or computer equipment for example.
These forecasts can be arranged to display profitability, solvency and cash-flow and are the only reliable way to measure and decide on actions – like laying off staff – that will need to be made.
If you are concerned that staff retention may become an issue for your business, pick up the phone. We can help you crunch the numbers and consider your options. Now is not the time to bury your head in the sand. The clock is ticking.