Managing staff costs during the coronavirus crisis

Managing staffing costs is one area in which businesses have some degree of control.

Confidence is at a low ebb among small businesses, with the third-quarter survey from the Federation of Small Businesses (published 26 October 2020) indicating that two-thirds (66%) of the 1,564 firms surveyed at the end of September expect their financial performance to worsen.

Businesses have some degree of flexibility over staffing costs and government assistance is available, provided eligibility criteria are satisfied.

King’s Business SchoolLink opens in a new window has pointed out that 6 million small businesses, supporting 16.6 million jobs, face a very uncertain future.

This uncertainty won’t have been helped by the latest coronavirus lockdown measures. But to support businesses, as of 5 November 2020 the Government’s Coronavirus Job Retention Scheme (CJRS) (or the furlough scheme, as it's also known) is being extended until the end of March 2021.

Coronavirus Job Retention Scheme +

If an employer can no longer provide employees or workers with work because of decreased demand due to the impact of coronavirus, they may be able to access government financial support through the extended Coronavirus Job Retention Scheme (CJRS) (also known as the furlough scheme).

Due to end on 1 November 2020, the CJRS has now been extended until 31 March 2021.

The Government will pay 80% of wages, up to £2,500 a month, for those hours furloughed employees don't work, with employers paying National Insurance and pension contributions.

Eligibility

To find out if you're eligible, as well as how to claim, visit GOV.UKLink opens in a new window.

Coronavirus Statutory Sick Pay +

The Government has introduced a Coronavirus Statutory Sick Pay (SSP) Rebate Scheme. This is for sick pay paid to employees who can’t work because they:

  • have coronavirus symptoms
  • are self-isolating because someone they live with has symptoms
  • are self-isolating because the NHS or a public-health body has notified them that they’ve come into contact with someone with coronavirus
  • are shieldingLink opens in a new window and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks
  • have been notified by the NHS to self-isolate before they undergo surgery, for up to 14 days

You can learn more about eligibility, and how to claim Coronavirus Statutory Sick Pay (SSP), at the Government's website, GOV.UKLink opens in a new window.

Managing staff redundancies +

As an employer, you should only consider staff redundancies as a last resort. They need to be managed properly, following the correct legal process.

Learn more about managing staff redundancies.

Alternative measures +

If your business is otherwise viable and you need financial support to cope with the impact of COVID-19, there is a range of finance options available to you.

Additional support +

ACAS – Redundancy advice Link opens in a new window

Guidance from ACAS (The Advisory, Conciliation and Arbitration Service) for employers who are considering redundancies.

GOV.UK – Statutory Sick Pay guidance Link opens in a new window

Check if you can claim back Statutory Sick Pay paid during the coronavirus pandemic.

Regional support

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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.