A major study has revealed that almost one in three businesses expect to decrease the size of their workforce in the next three months due to the coronavirus.
The research, published by the British Chambers of Commerce (BCC) and Totaljobs, comes ahead of the end of the Coronavirus Job Retention Scheme (CJRS), which will cease to operate on 31 October 2020.
According to the survey, 29 per cent of businesses expect to make redundancies ahead of the closure of the scheme which supports jobs by paying a portion of salaries. This is compared to 59 per cent of business owners who will “maintain” their current workforce and 12 per cent who will “increase the size of their workforce”.
Redundancies will be particularly rife among small and medium-sized enterprises (defined as having 10 to 249 employees), with 41 per cent of businesses within this category expecting their workforce to shrink.
Commenting on the research, BCC Co-Executive Director Hannah Essex said: “Many businesses are suffering from an historic cash crunch and reduced demand, meaning firms will still face tough decisions despite welcome interventions made in the Summer Statement.
“The government should consider additional support for employers before the Autumn Budget to reduce the overall cost of employment and prevent substantial redundancies. Measures could include a temporary cut in employer National Insurance Contributions and support to upskill and reskill employees as businesses adapt to change.”
The study comes as the Government begins to wind down the CJRS over the coming months. Employer National Insurance Contributions will no longer be covered from August, and in September and October the contribution level will be decreased to 70 per cent and 60 per cent, respectively.
Although the CJRS is coming to an end, the support scheme is just one of many interventions introduced by the Government to protect the economy. Other support schemes include Business Rates Relief, the Coronavirus Business Interruption Loan Scheme (CBILS) and grant funding of up to £25,000 available through the Retail, Hospitality and Leisure Grant Fund.
If you have questions about the support available for your business, please get in touch with our expert team today.
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